We’re all about to embark on a well-deserved, long weekend  of leisure — hopefully filled with lots of sun – so I’m going to make this week’s update rather short (or at least as short as I tend to make my Weekly Market Watches).  The main item I wanted to share with you was this week’s Time magazine article I came across entitled “Is the Housing Market on the Rebound?”  Here’s an excerpt:

“Spring is typically the season when people shop for houses. Many families like to complete their home purchase by the end of the summer so as to not uproot their children during the school year. And let’s face it: houses just look more enticing when flowers are out. But the real estate bust and economic downturn have made the past few housing hunting seasons rather slow. Some buyers have waited on the sidelines hoping prices had further to drop.

This year looks to be different. Already, falling interest rates, an improving economy and a last bit of economic stimulus are helping the housing market stage a revival. In April alone, sales of existing homes jumped 23% from a year ago, according to the trade organization National Association of Realtors. Sales of new homes rose even faster, up 48% from a year ago. What’s more, a growing number of economists believe the three-year plunge in housing prices is at an end.

“Units, volume and sales price are up on all fronts,” says real estate broker Todd Hetherington, who is based in Alexandria, Va. “Houses that are priced well are getting multiple offers in the first week.”

For now, though, housing prices, like everything else, remain rocky. According to the S&P/Case-Shiller nationwide index, home prices fell 3.2% in the first quarter of 2010, down from the already low levels where they stood at the end of 2009. And home prices may stay down for a little longer. The continued recent slide in the stock market is hurting consumer confidence and likely to make some people pause before buying a house. Foreclosures aren’t helping the housing market either. The government’s home-loan-modification programs have helped keep a relatively small amount of home owners out of foreclosure. But more repossessed homes are now starting to land on the market, driving up the number of houses for sale and holding down prices. In addition, some economists are concerned that the expiration of an $8,000 tax credit for homebuyers, which essentially ended in April, will hurt home sales. Indeed, the Mortgage Bankers Association said last week mortgage applications for new home purchases fell to the lowest level since 1997. Lastly, mortgage credit remains tight, making it hard for some prospective home buyers to qualify for a loan.

“We think the tax credit has dragged a lot of house sales forward, and we think we are going to pay for it,” says Jay Brinkmann, the chief economist for the Mortgage Bankers Association. He expects home sales to drop 5% in the fall of 2010.

Nonetheless, a growing number of economists believe this spring could end up being the start of a sustained rebound in the housing market. The biggest driver of that rebound will likely be interest rates. Though rates were expected to rise this summer, the continuing problems in Europe are driving down rates in the U.S., which is still seen as a safe haven for investors. The result is that mortgage rates have fallen to their lowest point in a year and are expected to continue to drop through the summer. In general, for every percentage-point decline in mortgage rates, houses effectively become 10% cheaper.”

The last paragraph speaks for itself.  We are definitely seeing some strong signs of rebound in the market and the remaining Spring weeks and Summer months should be quite telling.  We’re fortunate in that interest rates remain low and thanks to that, buyers can simply afford more house and that fact is helping drive much of our market.

Now, let’s take a look at this week in real estate:

Auburn

Inventory: Bank owned properties is low compared to last year.  We are still doing the Broker Price Opinions on them but they are slow to convert to listings.  We are seeing short sales approved at a moderate level – two within the past week.  “Traditional” listings are staying at the same level, although we are seeing some price reductions.

May is a bit of a slower start than April, but we’re sure to see that pick up with the weather.  Agents are realizing that the work to get an offer accepted is frustrating on their end as well as for the buyers.

Very slow open houses with little activity.  Appraisals seem to be at or above purchase price, but we have so little inventory that buyers are not very happy.  There seems to be a definite slow down over April.  The report from the MLS stated that in the Sacramento region, 72% of the listings are either short sale or REO.

El Dorado Hills:

The foothills market continues to make a slow recovery. Prices are stable in the low-to-mid range but are still very soft in the upper end. Inventory has decreased nearly 5% with over 30% of that are short sales; additionally 70% of the short sales are sold contingent. Bank owned properties apprise less than 10% of the active inventory. On the buying side, we’ve had two Leadrouter- Coldwell Banker’s proprietary website consumer rapid response system- sales in the past week. One had been incubating for over a year and one was only two weeks old. Those prices range from mid $250’s to over $800,000.  Inventory remains low. Short sale listings still dominate the market but we’re seeing some improvement in the short sale acceptance process. Sellers who’ve been waiting for the market to improve are beginning to come back into the market.

Elk Grove

Our inventory is holding steady on the listing side, and is increasing on the sales side- if there is a nice home available, it’s likely that one of our agents’ has a buyer for it!  We’ve held eight homes open this period.  Open house traffic is strong.  Buyers are very active and are content that prices are great.  We are continuing to represent a majority of the market, however, regular sales are continuing to grow.

While we have yet to see dramatic jumps in average sales prices, we are seeing more activity in the mid and higher end.  The frustration level for many first time buyers remains high.  With that said, optimism is higher.  There is a sense, although fragile at times that the best is ahead.  The agents that continue to develop their skills, aim high and work their plan are succeeding.

Fair Oaks

Listing inventory has been picking up finally. It seems like we are getting more short sales and traditional sellers.  Sales Inventory is selling as always quickly if they are priced right. We are still having problems with properties appraising.  Multiple offers are still dominant in our office. The agents working with buyers are still getting rejected even with their offers being higher.

We had ten homes open last weekend and five during the week – evening showings called “twiglights.” Open Houses havebeen a great lead generation for my agents working with new buyers and even getting listing appointments from neighbors and other sources.

Folsom

Listing inventory is increasing – not a bad activity period for our area- average sales price is around the $400,000 range. The good news is that they were all traditional listings as opposed to short sales or REOs.  The open houses are slim and are lightly attended.  Our office did see increased activity on properties priced over the $750,000 price point; in fact over $1,000,000- the buyers are out there!

The local real estate market is changing and gaining some strength- good news!

Metro:

The Metro office is situated right in the heart of Sacramento and is seeing steady inventory on both the listing and sales side, with a moderate number of multiple offer situations.  The weather has been spotty and with Mother’s Day just passing, the open houses have not been widely attended with the exception of those very desirable homes in the core areas.   Short sale activity continues to increase.  Every home that is in good condition and priced correctly in our local market place is selling. Every transaction takes twice the amount of work to close!

Placerville:

April was a great month for sales in Placerville so we’re busy closing those escrows. We’ve put together two HUD transactions in the last two weeks and we’re finally getting used to that process.  Inventory remains low and showing activity on our listings has improved considerably. We’re seeing more second home and retirement clients and are having to deal with the short sale market.

Rocklin/Lincoln

Rocklin has seen a handful of new bank owned activity in new listings and increased buyer activity.  Hopefully we will see more of these listings within the next month or so.  Pricing is good as well.  Short sales approval is encouraging; lenders are proactive and seem to respond quicker.  We are having less ancellations due to appraisal issues; but more and more multiple offers on properties. REO activity it slow, but we are seeing several short sales being approved in a shorter period of time and with less stress.  We have received a number of BPO requests from asset managers that will hopefully lead to listings.

Although we’ve not held many homes open during this reporting period, those that are open are quite well attended; one of the open houses led to a solid lead.  Many of the agents that regularly hold open houses were busy with buyers.

Agents are very positive that the market is changing for the better!

Roseville- Granite Bay

The listing inventory is steady; sales for the last two weeks were a little slower than expected—nine houses held open last weekend and traffic was mixed. Short sale activity is still the strong suit and approvals are happening,  but never fast enough for buyers and agents. We are still in a very frustrating market with changes the norm. The agents are working hard and will continue to make sales throughout the summer season with better questions to clients and listing agents making for more sales.

Sierra Oaks

Our market continues to show signs of recovery, albeit slowly.  Our overriding problem continues to be the lack of listings.  Properties in our area are selling at a brisk pace, but PRICE continues to be the key driver of the sales.  As always, sales are a product of price, condition, and location, but PRICE is by far the key.  We are also starting to see more of our higher priced listings selling at a faster pace Also, agents are still expressing frustration at how long it is still taking to get short approval or response from banks. This in spite of their claim, we are still seeing it take short sale approval of up to 4 or even 6 months.

Buyer activity, and especially at open houses, continues to be very brisk.  While job security is a factor that keeps some buyers from action, low interest rates have helped a great deal in making it easier for buyers to purchase the house of their dreams.  In a recent office survey that we conducted, almost all of our agents expressed very strong traffic.  Most agents reported on average of about 8 to 10 visitors to their open houses, but we did have one agent who had “60” at her open house, and several had over 20 at their open houses.  Again, the problem is not the lack of buyers or over abundance of inventory.  It is most definitely the shortage of properties, and/or properties that are priced well.  Our office will end the month of May with solid and commendable activity!

North Lake Tahoe-Truckee Region

This past week the Tahoe-Truckee area experienced some winter weather which may have been the reason for a slower sales week where only 17 properties sold for the week.  That being said, there continues to be a great deal of activity brewing and continued buyer interest in our market.

With residential and lot sales up 78% from the previous year, it points to the fact that astute buyers continue to show strong interested in investing in Tahoe-Truckee real estate which is priced in some cases at 2001 price levels.

One of the key reasons for the spike in unit sales is highly influenced by the drop in home prices.  The median sales prices have decreased by 11% to $400,000 and average sales prices have decreased by 9% to $526,586.

We continue to see a greater percentage of sales in the REO and Short Sale arena as roughly 37% of our sales are either REO’s or Short Sales.  However, there is still considerable interest in non distressed properties as many are priced at levels that are too good to pass up.

We are continuing to see the trend for sales towards homes priced under $500,000 with 64% of the sales this year being in this price range.

Active Listings: The active listing inventory for the Tahoe-Truckee market increased 3.5% from the previous week as more homeowners are putting their homes on the market for the summer season.  Currently there are 1,817 active listings in the market; 1,255 residential properties and 561 lots and land listed for sale.  Coldwell Banker has over 15% of the listings in the market.

REO-Short Sale Listings:  Of the active listings, there are 149 properties listed as short sales, (8%) and 58 properties listed as REO sales, (3%).

Months of Inventory:  Based on the current inventory and sales for the previous 30-day period, the market has roughly 16-months of inventory available.  The inventory of homes and land at today’s prices continues to favor the buyer interested in an investment property, vacation home or moving up to a bigger home or better location.

Vacaville:

Vacaville is humming along nicely.  Our agents are energized and busy!  One of our agents held an Open House this weekend with our Mortgage Advisor, they had over 100 people come through!  Current Inventory in Vacaville:  386 Active, 30 Pending and 25 Sold (May 17th – May 26, 2010).

Finally, I’d like to say, enjoy your Memorial Day weekend.  The unofficial start of summer is almost upon us.  All across the country, pools will be opened and the smell of cookouts will fill the air.  However, it’s not just another three-day weekend.  Memorial Day is a day intended to commemorate all U.S. men and women who have made the ultimate sacrifice while in the military service, a tradition our country has observed since 1868.

Enjoy your family and your time this weekend and let’s all pay our respects to the men and women who have made our country and freedom possible.

Bob Bronswick

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