Archive for the 'Market updates' Category
What Holiday Break? January 2012 Sonoma County Real Estate Market Off to a Fast Start
Here I sit on New Year’s eve weekend–in the sunshine out by the pool writing some blog posts for the new year. What was going to be a sleepy quiet week between Christmas and New Year’s has been anything but! I have written two offers this week and have two new listings coming on the market in the next couple of weeks. Am also getting good activity on some other listings! What gives? Normally this is a pretty quiet time of year in the real estate market but activity has barely taken a breath for the holidays! I am not complaining, not by any means. I think it is a good sign that the market is so active. Other agents I know are very busy, home inspectors are booked solid and there is a decided hint of optimism in the air. Now I realize that there are lots of challenges and difficulties in our economy and the real estate world. About 30% of homeowners owe more than their homes are worth. We are not heading in to a dramatic turnaround anytime soon. By the same token though buyers don’t seem to be waiting on the sidelines and sellers with equity also have decided to get back on the playing field. With interest rates ridiculously low, this bodes for a busy January. Welcome to 2012! We will be back this week with a more detailed look at the market for real estate in Sonoma County. Until then, Happy New Year!
Newly Pending Home Sales in Sonoma County up 65% Year over Year October 2011 vs. 2010
It’s early November and finally time to pull the home sale statistics from our Multiple Listings Service (MLS). I first pull one years stats and then pull stats going back two years and even three years as I try to decipher the trends. This month you can see what I learned by looking back at different timeframes.
Let me preface by saying that this autumn the market is VERY active, at least that is my perception, shared by other realtors I know as well as home and pest inspectors, etc. There seem to be more equity sellers and there seem to be more buyers, including at the upper price ranges. But I always like to go back and look at the market stats to further understand our market and anticipate future trends that can help my clients make the best choices about how to sell or buy a home.
Anyway, what jumped out at me this month was the fact that “Newly Opened Sales” are up 65% over last October at this time from 366 to 603! What a change–I guess it confirms the experiences we have been having, right? (Take a look below, and you can scroll through all the graphs for the latest stats I pulled. Also if you go to the Scribd website you can see previous stat collections I have published. To see all of them you can look through the archives of this blog, which I began in the summer of 2007.)
Sonoma County Home Sales Report Report October 2010 through October 2011
OK so a 65% increase in Newly Pending Sales is great news, but let’s look at two years history to see if we can learn anything else. Take a look below. From October 2009 through October 2011, Newly Pending Sales are up ‘ONLY” 31%, year over year. Still pretty good but not as mind-blowing!
And I recalled that last autumn was very slow, since the first time home buyers’ tax credit had expired and most people using it had pushed their purchases earlier in the year.
Sonoma County Home Sales Report (two years back) October 2009 through October 2011
OK, so for those of you who are real data geeks, here is the same collection of stats going back THREE years through October 2009. This time the data are compressed in to quarterly figures, smoothing out some trends. Now when I look at the same Newly Pending Sales, they are only up 3% over 2009–and remember what a shocking time that was. Lots of foreclosure sales. Since then, bank owned pending sales have actually DECLINED 16%, meaning equity sales are accounting for a larger portion of home sales now versus three years ago. Make sure you note the “Months Supply of Inventory” figures in each graph (if you’re still with me.) That is probably the most telling trend. HOUSING INVENTORY is VERY LOW now at the current sales rate, with only 2.8 months supply versus 4.2 in autumn 2009. In 2010 the supply of homes was over six months, indicating the brief lull in sales.
Anyway enjoy reviewing this data. If you want my help in actually buying or selling a home, I can help you to do that too!
Sonoma County Home Sales Report (two years back) October 2009 through October 2011
First Quarter Reflections: 2011 Off to a Fast Start but Challenges Remain
Since the first Monday morning after New Year’s Day, the Sonoma County real estate market has been incredibly active with some of the highest rates of pending sales in the last several years. Most realtors I know have been very encouraged by all the activity, particularly after activity in late 2010 ground to a near halt for most agents.
But many challenges and obstacles remain, and MANY opportunities exist in this market as well. We will continue to delve into these in more detail over the coming months but for now, here are some of the high points.
The median sales price in the county has declined over the last several months. What this generally means is not necessarily that values of individual properties have declined so much, although I think there has been some softening. What it means is that the action this last winter was in the low end of the market–that is homes under $350,000.
Our market is currently dominated by first time buyers, investors and, to a lesser degree, second-home/retirement buyers.
First time buyers are often FHA buyers with as little as 3.5% down. FHA allows these buyers to receive down payment assistance–either gifts from family members or government-sponsored down payment assistance programs such as CHAFA. (News Flash: CHAFA in California is currently on hold due to a funding shortfall.)
Real Estate Investors are out in force both in Sonoma County and nationwide. Bargain-basement pricing, interest rates in the fives and a strong rental market are attracting investors in record numbers. Previously high prices kept investors out of our markets for years.
Many investors are buying homes to hold and rent. With 25% down, you can buy a rental and pay interest in the low 5’s. Homes that cost $200,000 to $300,000 can cash flow today. Someday we will have appreciation again and you can add that to the tax benefits and cash flow of the current rental market. (Talk to your tax advisor about how a rental property can benefit you, and talk to me if you would like me to run some numbers for you.)
Other investors are buying to renovate and flip. I have seem some great flip jobs and some bad ones, but for the most part I think these investors are doing a service in renovating some of the really troubled real estate inventory out there. Some of these investors are buying foreclosed properties off the courthouse steps (not recommended for the amateur), others are looking for good opportunities on the open market. A listing of mine just sold–it was a HAFA short sale by Wells Fargo. It was purchased by a cash buyer who is going to do some renovations to the property and put it back on the market in 3 or 4 months. I am seeing a lot of new home builders who are spending the recession taking this approach to business.
The other segment that is seeing signs of life is the upper-end market. In the wine country of Sonoma County and beyond, there are MANY MANY more sales of properties priced at $1,000,000 or above. The luxury market is gaining strength and cash buyers are out in force to take advantage of bargain prices. There seems to be a consensus that prices have dropped to a more accurate level as sellers have become more realistic about today’s market valuations.
But there is a gaping hole in the move-up market. If people owe more than their home is worth then they have no equity to take and put in something bigger or different. Sales of homes from $500,000 to a million are pretty sluggish. There are some great opportunities to buy properties at a great discount in this price range.
Who will be taking advantage of these bargains?
I work with many out of town buyers new to the wine country, typically coming from urban areas looking for a wine country lifestyle. They might be selling their home in the San Francisco Bay Area, Los Angeles or NYC. This would be a sideways move or maybe a downsize. Maybe the kids are off in college or retirement is in sight.
I also see many second home buyers who are taking advantage of our bargain pricing to own a home that they can use as a weekend place or rental now. Generally there is a plan to move in fulltime someday. Often these are folks who love gardening, food and wine or have horses and want to keep them at home.
As the headline said, challenges remain. Lending standards are tight and often shifting. (I am glad to see standards tighter, don’t get me wrong, but it pays to be aware that they are constantly changing.) The cost of home-buying for FHA buyers went up this week. Rates have inched up slightly. The jumbo loan limits will increase this fall. Many people are concerned about their jobs or have lost them or been cut back. The move-up market is nearly non-existent.
But that said, there are opportunities in challenging times. You just need to know where to look!
2010 Sonoma County Real Estate Year in Review
I thought I would kick of 2011 by looking back at the Sonoma County home sales data for 2010. I pulled the closed sales data for all residence types in all of Sonoma County for the last 13 months (December 2009 through December 2010.) This includes single family residences, farms and ranches and condominiums.
It is difficult to discern any particular long term trends in the last quarter’s data. There has been a slight decrease in the number of home sales and a slight increase in listings of homes for sale over the last 2 or 3 months. When inventory climbs and sales drop for an extended period we see price declines. You can certainly see that if you look back at the sales figures from 2007 through 2010.
I don’t think that is what we are seeing in this case. What seems to be happening is that “regular” home-sellers removed their unsold homes from the market for the holidays, which is a pretty typical pattern. That left bank-owned homes on the market and indeed they represented a slightly higher percentage of sales in the fourth quarter. I also do think that we had a early winter this year, not just all the rain we had early, but in the sense that the first time homebuyer tax credit expired over the summer and it had caused some buyers to accelerate their buying to earlier in 2010.
Been Down So Long it Looks Like Up to Me?
We have seen a greater increase in the number of non-distressed homes on the market over the last 15 months or so. We have also seen more higher priced homes come on the market, both distressed and non-distressed. The increase in unit sales of the higher priced homes led to a gradual slight increase in the median price. So when the median price has gone up it is NOT because the value of individual homes has increased, but because the mix in prices of homes sold has changed to include more expensive homes. (NOTE: In 2009 the vast majority of sales were for homes price under or at $300,000 dollars.)
What most local Sonoma County agents that I have spoken with seem to feel is that we have achieved stability in prices under $400,000 over the last couple of years. I can’t believe it but it has been two years (!!!) since I first called a bottom in the median Sonoma County home price. Wow, what a tough two years.
What we continue to see however is softness in prices as the value of individual homes increases above $500,000, one million dollars and two million dollars. Buyers are out there at all these price points (in diminishing numbers) and it is interesting to see how they will studiously ignore homes that are overpriced, and how they will pounce (with multiple offers typically) when a listing price hits that magic number that the market perceives as a good value.
Two Different Looks at Last Year’s Home Sales Numbers
Here are the sales figures for 2010. I will post a three year view along with these numbers at my Scribd account. It is interesting to look at the trends over a longer timeframe.
Meanwhile, please call or email me if you have any questions about this data and what it might mean for your particular real estate needs.
Sonoma County Homes Sales Trends 2010 Year in Review
25% Home Sales Drop in Sonoma County this October
A winter chill seemed to come early to Sonoma County’s real estate market. Sales were at their lowest level for October since 2007. Sales also dropped from September of 2010, which makes me wonder if the news of robo-signing of foreclosure documents just put a huge wet blanket on already skittish buyers.
Inventory was up only slightly, and newly pending sales maintained a very good pace, belying the drop in closed sales. It is possible that all the concern about the possible risk of buying foreclosed properties put a damper on sales. In that case short sales might be marginally more attractive to buyers. (Editor’s Comment: it is hard to make a short sale (they are anything but short) attractive to a potential buyer, but if it is the only game in town then I guess they look better, more about that in another post.)
The median home price dropped about 9% to $342,500. It has been bouncing around in the mid-$300,000 range for over a year.
I have been tracking home sales on this blog since mid-2007. This is the first big (non seasonal) drop in sales volume since late 2008. One month does not a trend make however. It will be interesting to see if is a temporary reaction to the headlines, or represents a more sustained trend.
What does this mean for you if you are a Buyer? If your income situation is stable (a big if for a lot of people), then this winter could present an excellent buying opportunity. Rates have dropped even since the summer to a decades low. Bottom line if you are a buyer now and the numbers work for you, this may be a great chance to buy with less competition at very low cost.
If you are a Seller? Without a doubt the drop in sales has got to give you pause if you are a seller. However, to whatever degree there is uncertainty about foreclosure inventory, your “normal” home is going to look a lot more attractive, but not if you overprice it.
I can think of any number of “normal” homes that are not priced in line with the competition and are just sitting, getting stale. If you are considering selling within the next two to three years, then you will want to be aggressive and pro-active about how you approach your sale, given the circumstances. It is better to be ahead of the market trends if you are a seller, not behind them.
Your home is not going to sell at a good price if it doesn’t show in tip top condition, and not if your listing agent does not know how to market it online. (Hint: talk to me about what it will take to get your home sold in this market!)
Anyway–for a closer look at the sales data and trends, visit the document below. You can find previous sales data for Sonoma County there as well.
And if you have any questions about Sonoma County real estate, and what these numbers mean to your real estate situation, please email or phone me.
Sonoma County Home Sales Trends October 2010
Sonoma County homes sales drop 21 percent in July – Pending Sales Up to Two Year High
This week, the Press Democrat newspaper confirmed the analysis of Sonoma County home sales reported here a couple of weeks ago, proof yet again that a local blogger can more nimbly provide the latest hard core real estate data. My reports are based upon the exact same data the Press Democrat is getting. 
The headline featured July’s drop in CLOSED home sales. If you read through the article, however, you will also learn that pending sales (newly ratified purchase contracts) are up to a two year high in July, indicating that sales activity is still strong, and has rebounded after the expiration of the $8,000 Federal Homebuyer’s Tax Credit April 30, 2010. While not all the pending sales will come to a succesful conclusion, it is still a good leading indicator of market activity.
Just a reminder that if you are looking for the latest Sonoma County home sales data, you can sign up for an email subscription to my blog, or check here the first week of every month to see the latest real estate sales trends analyzed here. For an archive of previous months’ data, check out my Scribd Account. If you are wondering, Scribd is an online repository for sharing of documents with social media components. It is to documents what Flickr is to photos.
Sonoma County Home Sales Resume Pace 2 Months after Tax Credit Expiration
There are no hugely exciting sales trends to proclaim this month. Trendlines we have noted in the past continue in unspectacular fashion which is good news as the market continues to stabilize. The best news is that newly pending sales (ratified home purchase contracts that have yet to close) rose up in July to nearly the same level as April.
The pending sales figures for April 2010 were very high, following several months of increase leading up to the expiration of the $8,000 federal tax credit, only available to homes “under contract” by April 30, 2010.
Throughout much of the country and in Sonoma County, newly pending sales dipped as expected, in May and June, since many people who might have bought in those months rushed to beat the deadline.
Here in Sonoma County, the July’s pending sales numbers are nearly as high as April’s however, probably due to seasonal effects a well as even lower interest rates than last spring.
Sales have not looked so good elsewhere in the US, but seem stronger here in Northern California and the greater Bay Area, a phenomenon we have been accustomed to over the last 30 years. I am concerned about the state of California’s budget woes and their long term impact on our markets, but that is a whole other topic.
Newly pending sales in Sonoma County reflect a couple of trends.
The rate of closed sales is down slightly from 2009 when sales of distressed properties peaked in the late winter.
Days on market continue to decline, reflecting a decline in inventory at the lower price points.
At the current rate of sales, the number of months supply of inventory is hovering around 3 months–a seller’s market– but only for properties priced under $450,000 or $500,000. There are plenty of sellers sitting on high priced (over priced) inventory throughout the county.
The median price is hovering in the low to mid $300,000’s.
The proportion of “bank-involved” properties is declining as an overall percentage of the sales mix. Regular folks have decided that now is as good a time as any in the foresee-able future for them to sell, so we see a greater mix of homes available to purchase.
Rates are ridiculously low, as little as 4.5% for a thirty year fixed mortgage for some credit-worthy folks! (Check out rates UNDER 4% for some 15 year loans!!!)
This means some people who want to move up to a bigger property, or a country property, are feeling more confident this year than last and willing to take that step. What they might lose on the sale of their existing home, they will gain with a good purchase price (at insanely low rates) on whatever they buy.
Here is a look at all the market reports for the last 18 months. Please email or call me if you have any questions or I can help you to figure out how they apply to your particular situation!
August 2010 Sonoma County Real Estate Home Sales Trends (August 2009 to August 2010)
Distressed Properties Continue to Account for Vast Majority of Sonoma County Home Sales
The first quarter home sales figures are now available and we will take a more in-depth at them later this week, but I thought I would point out this article in today’s Press Democrat newspaper, which reported the latest home sales figures as presented at the Santa Rosa Realtor’s breakfast this morning by Rick Laws of Coldwell Banker. Rick uses data from the Bay Area Real Estate Information Services Multiple Listings, which is the same source I use for the reports I produce every month. (NOTE: Until this data was available to me, Rick kindly shared it with me every months when he was my broker at Coldwell Banker. We like to geek out on this data in an attempt to understand market trends ahead of the curve. Thanks Rick!)
Rick took a look at the percentage of distressed property (euphemistically called “bank-influenced”) sales, which refer to short sales and REO’s or foreclosed properties. The data show at price ranges up to $1 Million, that the percentage that distressed properties make in the market is still very high, but declining as compared to the market bottom of Q1 2009. That is probably because buyers are coming out of the woodwork at the mid and upper ranges, and also because “normal” sellers (that is how agents refer to them in MLS comments!) have probably realized that now is as good a time as any to sell, that prices may have stabilized and we are not likely to see significant appreciation for some time. Also, they may realize it is good to sell when rates are down and buyer tax credits are in place. Inventory continues to be VERY tight and sales are up significantly.
It is also interesting to note that distressed sales now make up 17% of sales above $ 1 million dollars, where as there were no distressed sales at that price range a year ago. There were also very few sales over a million a year ago! Stay tuned for more later this week and feel free to call me or email with your questions or comments.
Bank “Influenced” Sales as a Percentage of Total Sales
Condominiums Q1 2009 88% Q1 2010 65%
SFR under $500,000 Q1 2009 82% Q1 2010 59%
SFR $500K to $1Million Q1 2009 42% Q1 2010 29%
SFR $1M to $10M Q12009 0% Q1 2010 17%
U.S. Home Sales Rose Sharply in February
Last month I posted the startlingly high “PENDING SALES” figure for the short, rainy month of February, in which the highest number of pending sales was recorded for the last two years.
Today the national press reported that nationwide, pending sales rose sharply throughout the US. The interpretation is that the soon to expire Federal Tax Credit of $8,000 for first-time and $6,500 for existing home owner tax credits were promoting the increased buyer activity. Interestingly, the article reported that strong sales in the Midwest lead the charge, and that sales have declined in the Western States. As yet further proof that all real estate news is local, the numbers of pending Sonoma County home sales bucked the Western states trend. (Wait till you see the March numbers, coming soon!)
The Number of Pending Sonoma County Home Sales Reaches Two Year High
Sonoma County Home Sales Rate hits Two Year High, in February!
February just ended. It was a short, cold and rainy month but that did not deter home buyers and sellers from ratifying purchase contracts on 557 homes, from Santa Rosa to Petaluma, Sonoma to Healdsburg.
Every month I review the latest sales data for Sonoma County homes and country properties and make them available to you. This month there are some very striking results to report. The number of newly ratified sales contracts, which I reported as very high in January, has increased to the highest level in at least two years. Since February is seasonally a very slow, short month, this is particularly interesting.
In addition, Month’s Supply of Inventory is also at a two year low, and only 2.4 months supply of homes are available at the current rate of sales. Many of the homes available, if they haven’t sold in a few months, are purely not selling because they are priced too high for today’s market. This is particularly true for homes priced under $900,000. That means well-priced homes that are priced well and show well, are selling VERY FAST!
What does this mean for you if you are a buyer? If you want to take advantage of the $8,000 first time buyer or the $6,500 move up buyer tax credits, you must be in escrow (newly ratified sale) by April 30th, and close by June. At some price points and for particularly well-marketed, aggressively priced homes, you will likely encounter multiple offers and a competitive market place. It is important to have a good relationship with a strong realtor who is on top of the market so that you can take full advantage of home buying opportunities as they come up.
What does this mean for you if you are a seller? If you have been holding off putting your home on the market, following conventional strategy to put your home on the market in the spring, it is not too early to (A) start the preparations, and (B) think of moving up your timeframes to take advantage of the current low inventory and low interest rates and tax credits. The better you can prepare your home prior to market launch, if you will, the quicker it will sell and the more money you will earn. Please contact me for details.
(If your home is under-water, that is, if you owe more than it is worth, there is some hope the process of selling the home under those circumstances, will be improving in the coming months. That is subject for another post.)
Here are the rest of the data from this month’s reports. (Other points to note–the median price is up 15% versus last February, when it bottomed at $290,000. It is down from a whopping $619,000 a few years ago and down 20% versus February in 2008.)
Sonoma County Home Sales Trends March 1,2010 Pam Buda Prudential California Real Estate
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