Archive for the 'Sellers' Category
I figure when my clients or blog visitors are asking me questions that there may be a few of you out there with the same sort of questions. Recently I was asked by a homeowner if this might be a time to consider selling their current home in a very nice Santa Rosa neighborhood. They were hesitant because in the fall of 2008 they put their home on the market briefly hoping to buy a country home with some more land for their hobbies and a little closer for their commutes.
We all remember last fall at this time. Many people put any plans to buy and sell on hold as Lehman Brothers collapsed and we seemed (as another client put it) to be headed for financial Armageddon. (!!!)
Since that time many markets, including Sonoma County’s, have been dominated by the sales of distressed properties. In our case that means properties priced under $350,000 to $400,000 dollars.
Foreclosures and short sales dominated the inventory and this year buyers have flocked to them in high numbers. As a result, prices have come up 3 to 7% in the lower price ranges since an apparent bottom in January or February of 2009.
Last winter, savvy buyers (you know who you are!), perceived a chance to drive some bargains in the winter months. They were willing to get ahead of the home buying curve before the mainstream media caught on to what was happening. Instead of competing with 10 or 20 other buyers for the same properties that ultimately sold over asking, they were able to buy homes with less competition and at lower prices.
I think something similar may be happening now for properties priced under $550,000 or so on the seller side. If you have been thinking of selling your home and “moving up” to a country property for example, there may be a nice window of opportunity for you to make the move, particularly since the revised and expanded buyer tax credit now may apply to you or the buyers of your home and put another $6,500 in your pocket. Check the links for details on these credits as they don’t apply to everyone and all situations. I suspect the media will be talking about this topic- a window of opportunity for mid-priced home sellers–over the coming months. Often the best opportunities lie in acting in advance of the mainstream acceptance of a trend. Usually the trend is months ahead of the media talk.
Certainly there is expected to be a new wave in the spring of foreclosure properties but right now there is very little inventory of homes for sale in Sonoma County between $450,000 and $550,000. And there are great bargains to be had in country property or slightly more expensive homes. In every market, there are opportunities, you just need to be aware of the current trends and be opportunistic! Granted you are not going to sell your home for what it would have fetched 2 or 3 years ago, but neither will you pay what you would have on the other end.
Here is a picture of supply and demand for single family homes between $450,000 and $550,000 in Sonoma County over the last two years. You can see that while unit sales are down 10% from 2007 at this time, the supply of inventory is down a whopping 70%!
Today I had the pleasure of walking a 7+ acre pinot noir vineyard property with my client, planning our strategy for a maximum impact market debut of her Russian River appellation home. Here’s a sneak preview picture of the Mt. St. Helena view to the Northeast. What a tough day at “the office.”
I recently wrote about the low “Month’s Supply of Inventory” of homes for sale in Sonoma County and touched on our seller’s market, driven by homes for sale under $500,000. What does it mean to be a seller’s market these days? The best and most hilarious explanation I have seen lately was done by Kris Berg, of San Diego Castles Realty, in her movie directing debut. Scarily true.
Month’s Supply of Inventory (MSI) is down sharply from last year.
Sales of existing single family homes fell slightly last quarter as first time buyers and investors busily snatched up entry level homes price under $350,000. At the present moment, November 2, 2009, there are only 1190 homes for sale Unit sales are down also, from priced under $500,000 county wide, versus 2,458 at the end of October 2008, meaning there are only 2.8 months of inventory supply if sales continue at their current rate. Anything under a five to seven months supply is considered to be a sellers market. Inventory is in very short supply and sales seem to be increasing even moving up to the higher price points. Please call or email me if you would like to sell your home. If you have been hesitating to sell your home because of the market, conditions may be more favorable than you think.
Add Solar now, Pay Later with your Property Taxes: Innovative Sonoma County program provides property owners with financing for Energy Efficient Improvements
One of the biggest problems with solar and other alternative energy systems and home energy conservation projects in general is that the upfront costs can take months or years to recoup in the form of lower utility bills. Plus, if a property owner is not sure they will be in the structure long enough to realize those benefits, there is even less incentive to make an investment, especially in our current economy.
But reduced consumption of energy immediately benefits the planet,Â leading toÂ less pollution and a reduced carbon footprint.Â Unfortunately the environmental benefits don’t reconcile immediately with short term financial outlay. One new program designed to address this problem head on. The Sonoma County Energy Independence Program (SCEIP) is billed as “HOT, COOL and GREEN!”
An overview of the program was the subject of a story in the Santa Rosa Press Democrat.
Conserve now, pay later
A brief overview from the SCEIP web site:
Participation in this Sonoma County program is completely voluntary.
Energy efficiency, water conservation and renewable energy generation upgrades must be permanently attached to the property to qualify. Items not permanently attached such as dishwashers and other appliances are not allowed. Improvements like insulation, cool roofing, heating and air conditioning systems, waterless urinals, solar panels and energy efficient windows are acceptable.
Improvements must be for existing buildings, new construction does not qualify.
Assessments are a lien on the property itself: when the property is sold, the assessment stays with the property.
Repayment is made through your property tax bill over time.
Participating in the Sonoma County Energy Independence Program is easy. First decide how much makes sense to invest in energy and water efficiency or renewables for your home. Then fill out our application and follow a few simple steps (outlined below.) Before you know it, youâ€™ll be realizing a monthly energy savings on your bill.
The lowest interest rate currently offered on the SCEIP website is 6.75%, but there is some talk of additional funds being made available to subsidize lower rates to make the payments more affordable.Â There is a calculator at the site so you can see what possible payments might be.
For more information on Solar Resources in Sonoma County visit “Solar Sonoma County” http://www.solarsonomacounty.com/index.html
It is going to be a gorgeous day to check out the latest West County new listings (Sebastopol MLS tour) tomorrow–I will have on my walking shoes and sunscreen, and James the trusty navigator on my TL will be well rested so he can plot out the best driving strategy for me and Izetta and hopefully another pal or two so we can economize on gas. (author’s note:Â I had hoped to Twitter my way through tour but that didn’t happen this week, maybe next time.)
Hopefully there will be some good munchies provided by the hosting agents since for some reason there are a pile of properties this week when there have been very few the last week or two. It is important for listing agents to incent their peers to tour their new listings, especially in a crowded field.
At one property last year (a country property listing of mine in Sebastopol) had so much going on that in order to convince agents to wait around and smell the roses, i.e. learn all the property had to offer, I had a masseur doing chair massages in one room, a lender pouring hot-mulled wine and apple cider in the kitchen, and bagels, lox and cream cheese for all. Two of us directed traffic and parking as well. I lost my voice after hours of tour-guiding. It was worth the effort because we had 3 offers the first week and sold for over asking to a buyer who is now very happy in his new country home. This in last year’s down market. What kind of creative broker tour incentives have you seen?
Anyway, I will report on the latest new West Sonoma County properties after tomorrow’s tour.
Heard on the Grapevine: In Healdsburg, I know of a great new listing coming up in early July–a classic Craftsman bungalow walking distance to the Healdsburg plaza. About 1600 sf with a new roof and paint, new deck and some interior updating, but a lot more room to improve (including the stand-up full length attic), or liveable and rentable now. It will be very competitively priced on a street with some gorgeous vintage homes. More info in the coming weeks.
Enjoy the lovely summer solstice week and tune back in for the tour and gravevine reviews and news. I also just received the latest Sonoma County Real Estate market stats so I plan to have a busy week of writing ahead. Headline: Sales continue to rise on the entry level of our market. Investors and first time buyers, and some first time investors (!) are out in force. Every day I receive an email report on the number of offers on bank-owned (REO) properties. Lots of multiple offers out there on the best ones with the best locations and best bones.
Help! There is not enough country property for sale in Sonoma County. I have buyers and very little to show them at the moment. Sebastopol, Healdsburg and the Valley of the Moon in particular are very low on new country real estate for sale. A really lovely piece of land with two legal units in an estate setting between Graton and Forestville just went into escrow with multiple offers. A charming farmhouse with two studio buildings and a small horse setup privately situated just 5 minutes outside of Sebastopol is in contract with multiple offers. An all cash buyer, rumor has it, plopped down nearly 2 million in cash (pending inspections) for a GORGEOUS 20 acre piece with a classic coastal home and large studio building within a week of entering the market. I think sellers are hunkering down due to the negativity in the press and uncertainty and fear in the economy. But well-priced, well marketed and properly prepared homes in Sonoma County, particularly country property, will sell quickly. There are a lot of buyers out there who have gotten off the (classic 3 rail wood board) fence who are looking for new homes or weekend getaways. If you have a country property in Sonoma County that you want to sell, please contact me for a free market analysis!
Have you ever visited the US Army San Francisco Bay Model? It is really great to see when the model is running and you can view the really complex tidal patterns that circulate through San Francisco Bay–I had the chance once when I attended a sailboat racing lecture there–tides being really critical to your success racing on SF Bay. With Homescopes, I hope that we can use our informal network of agents on the ground, to help us as a region get a feel for the ebbs and flows of our inter-related Northern California marketplaces.
Many of us in the real estate market in the North Bay are fairly convinced that our market in Sonoma and Napa is very influenced by the strengths and variations of the Bay Area real estate market whether in terms of general trends (Hot, Cold or Indifferent) as well as localized effects such as the tides of Palo Alto and the Peninsula, San Francisco and the East Bay Insterstate 80 corridor. I spoke to my friend Izetta Feeny yesterday, a long time Coldwell Banker agent in Sonoma County and shared with her the 3 Ocean’s Real Estate recent post about rapid median price apprection in Palo Alto and other selected markets in the Bay Area.
“Oh! That’s good,” she said, “That means we’ll see the effect up here in 18 months.” As if the rising tide of the heart of the Bay Area’s market would eventually ripple north to Sonoma and Napa counties and lift our boat. When our boat is eventually lifted by the Bay Area high tide, we attract at least 2 types of buyers from out of town: entry level buyers who can’t afford to live where they work in Marin or San Francisco, and upper-tier buyers with equity in strong, competitive Bay markets that want a lifestyle change and move here full time, or who are looking for a weekend getaway or wine country estate. As the most desireable markets in the Bay Area are strong, then we see a more immediate impact on the markets that will serve the budding country squire (and squire-ess). Virtually all the buyers I have worked with this year fall into this category of new “lifestyle” immigrants to the wine country.
As you view the upper quartile median price points for many of Sonoma County’s cities (well, towns), the cities with the most cachet for out of town buyers: Sebastopol, Healdsburg, Glen Ellen, Kenwood and Sonoma, all have much higher upper quartile price points. Counter-intuitively, there are wide fluctuations in the upper quartile of some of our markets (Kenwood and Glen Ellen, Healdsburg) but that is because upper quartile price ranges are much broader, and with the small sample size of these areas, are subject to wider swings when a large vineyard estate sells for $4 to $6 million or so one month but not the next.
The greater majority of our upper tier markets hover in the $1M to $2M range, with increasing forays into the $2M range.
There are different tidal patterns and forces pulling these buyers to the North Bay. So a typical Palo Alto homeowner who wants to stop and smell the roses (or the grapes) can trade in their little rancher ($2 to $2.4 million) near Hamilton or Emerson and live like the landed gentry up here with 2 to 10 acres of privacy, views or room for horses or farming. Or a stunning retreat property for weekends and holidays. This Sonoma County potential buyer has been pretty immune to the ups and downs of the general market and the subprime lending crisis. They keep the upper and sometimes the 2nd quartile markets steady and strong. Which is why we see well-priced and presented country properties moving quickly (i.e within a month or two) while many many single family tract homes and condominiums in suburban locations in Petaluma, NW Santa Rosa and Windsor are languishing. The lower quartiles are currently more impacted by the uncertainties in the mortgage markets, plus the hordes of amateur investors are back in the stock market and not investing in real estate.
These are the types of homes (typically the bottom one or two quartiles) that will be snatched up by Bay Area renters and workers who will commute to their jobs from the North Bay. Yesterday I showed one of my listings to a young, first time buyer and his agent from San Rafael. He is on the hunt because he perceives value in the lower quartile of our market, and rates are down, affordability is up. So the currents ebb and flow.
These buyers have been staying away but seem to be cautiously returning. The Palo Alto potential country squires never really left. Many of the smartest buyers know that now is a good time to buy, with low rates and lots of choice. The real illusion that some buyers hold is that they can somehow divine the low point of the tide and time their entry into the water. That is even harder to do with real estate than the stock market. Just take a look at the San Francisco Bay model to see how complex these currents can be.
One of my colleagues asked me to accompany him to a home auction at the fairgrounds in San Mateo County last weekend. Now, when I think of auctions I think of the Keeneland Yearling Sales in Kentucky, the Napa or Sonoma Wine Auctions or livestock auctions. The concept of auctioning peoples’ HOMES, I found depressing and sort of difficult to imagine, as if the homes would be paraded around the livestock ring on a lead rope, with numbers stickered on them, and the happy buyers would roll them away in shopping carts. So last Saturday I decided to go, and to help Miguel and Cecilia, his wife, as their agent, and see what the scoop was.
The auction was run by LandAuction.com, a company which primarily has run land sales, but recently has started to move more homes due to the subprime mortgage situation and the amount of homes in default. The process of buying a home in this way is appealing to a lot of people (they think they are getting a deal, and the average time of a home on the block (2 minutes–or 500 homes a weekend) certainly shortens the sales cycle! In Australia, many homes are sold at auction. The process is fraught with risks however, and is about as different as can be from the “standard” California home purchase transaction as it can be, without completely disregarding California laws concerning seller disclosure and buyer investigations in real estate transactions.
In the case of the auction, the buyer generally must
do ALL of their investigation prior to bidding on the property
buy the property as is and with no contingencies
close within 21 days of the auction
Unless you are very familiar with an area, and have thoroughly investigated a property, you could find yourself in the position of losing your earnest money deposit if you change your mind after your “winning” bid and decide not to go through with a purchase. This is the reverse of the sequence and a vastly different process on a “normal” purchase where the buyer is in the driver’s seat during a negotiated contingency period and can cancel a purchase during their timeframes if the property does not pass their inspections or their loan is not approved, for example if the property doesn’t pass muster with either the bank or the appraiser. There is no loan contingency period unless you use the lender affiliated with the auction company, which might not be the most competitive. This did not stop hundreds of people of all ages, races and persuasions to turn out to find a deal. We had to wait five hours for the house we were interested in to come on line, and it sold for $25,000 more than we thought reasonable, so the day, while interesting, did not leave us with a full shopping cart.
By the way, 10 of the 500 homes were from Sonoma County. I don’t think there were any screaming bargains, but a few of the homes might have been 5 per cent below market, with most of the nicer homes coming in pretty close to market.
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