Home Sales Dip in June? Not in our area!

The National Association of Realtors recently published an article that homes sales nationwide dipped in June due to cancellations and soft condo sales. That may have been nationally, but the Sacramento and surrounding area is very different. Check out the chart below that has active, pending and sold homes over the past 15 months in Sacramento, Placer, El Dorado and Yolo Counties:

In our area, sales were slightly above last months. Pending sales continue to rise and inventory is declining. In fact, the chart below has the month's of inventory:

Right now, we are at less than 3 month's supply. A "buyer's market" is 6 months or more supply. Technically, we are in a "seller's market." If you are a buyer, you know the frustration of competing on the desirable properties. Why people think it is a buyers market is because of the values. Check out the chart below that has the average price per square foot:

At $124 per square foot, there are great values for those looking to buy. While the values are down compared to 15 months ago, they are starting to tick up. Keep in mind, regular or "equity" sales go for $10 to $30 per square foot high than distressed properties. If you are waiting to get back to 2005 high levels, CNN recently predicted it will be 2025. It is predicted we will have short sale and foreclosures with us until 2014, 2015. Those will continue to keep the values flat. If you cannot wait to move, or are at risk of losing your home, you may have more options than you realize. Contact me bob.walatka@kw.com. Also, if you are renting, you can probably own a home for less than you are paying in rent and their are programs that can get you into a home for as little as .5%.

Bob's Rocklin Home Value Report June 2011

Some good news for home values in Rocklin. Check out the video.

Market Statistics for Rocklin June 2011

Active, Pending and Sold homes in past 15 months

According to the chart below, the number of homes sold stayed flat compared to the month prior and still above the average for the past 15 months. The number pending sale continues to climb. Supply dropped to 1.92 months. Six months or more supply is considered a "buyer's" market. As hard as it may be to believe, we are in a "seller's market."

The average price per square foot rose again slightly to $131. Do you know anyone that is renting? With values this low and interest rates at historic lows, they can probably buy a house for less than rent.

I have made a commitment to help 50 families this year either 1) get out of a tough situation in their home, 2) take advantage of the low values in the market, or 3) move up or down. Do you know anyone that fits that description? Bob Walatka, 916-213-4522, DRE License #01353208

Tsunami of Bank Owned Homes. Is it Real?

For about three years now, we in the real estate industry have been hearing there is tsunami of bank owned homes coming on the market. Earlier this year, REO agents I know, had asset managers telling them to "get their running shoes on" because there were a bunch of bank owned homes to be released. Well, bank owned assignments and listing have actually declined. So then the question becomes, "what about the shadow inventory?" The homes that are owned by the bank, but not on the market? Or even a bigger number, the homes that are in the foreclosure process that could turn into bank owned? I did some research in Rocklin to get my arms around the numbers and here's what I found out:

- There are 175 bank owned homes in Rocklin and 42 for sale or pending sale. That leaves 133
- There are 400 homes in pre-foreclosure and auction status and 215 for sale or pending sale. That leaves 185.
- So, there is 348 home of "shadow inventory" in Rocklin.
- Over the past six months, about 80 homes have sold per month. That means, if all 348 homes were placed on the market today, they would be absorbed in just over 4 months at the current rate. That is still technically a "seller's" market. Sis months or more supply is considered a "buyer's" market.
- One caveat pointed out by my friend in the commercial world, Ross Tolbert. These numbers do not include those that are behind in their payments but the bank has not started the foreclosure process, i.e., the shadow of the shadow.

So where is the tsunami? This graph below shows bank owned homes in Rocklin for sale and sold over the past five years.

This shows that clearly, the tsunami of bank owned homes hit in 2007 and 2008 in Rocklin. There was a little wave in 2010. Is the worst of it over then? Well, experts predict we will have short sales through 2014 to 2015. We will certainly still have foreclosures and bank owned homes released. However, if the current pace continues, it will not make a material impact on values. I checked these numbers about two years ago and there was 6 months supply, so things have actually improved.

Here's the thing, some of you need to move. Renters can buy and pay less than they are in rent. Every one's situation is unique, so don't listen to the media. Talk to real estate professional like me. We likely have the "real" story of what is going on. 916-213-4522. bob.walatka@kw.com

Most Common Questions about Short Sales and Foreclosures

I got this from Alex Munn of BPE Law Group, the best attorney in the area on the subject.

Here are the 5 most commonly asked questions I get when doing a consultation:

 

1.    do I have to pay the bank the full amount I owe in a short sale?

 

2.    can the bank seize my assets?

 

3.    are my retirement savings at risk?

 

4.    do I owe taxes on the deficiency?

 

5.    how will a short sale effect my credit?

 

Want the answers? Come to our Free Short Sale Seminar. Click Here

Loan Mods, Short Sales, Foreclosures - Oh My!

For the past several years, we have been helping out people that are underwater in their homes, can't afford the payments and at risk of foreclosure. This whole foreclosure monster was virtually non-existent a few years ago and now most home owners to need to have some basic knowledge about it. We do hear similar questions when owners are facing foreclosure or considering a short sale. "Can the bank come after me for the deficiency? Can they go after other assets? Will there be tax consequences?" In almost all cases, the answer is "maybe." However, there are some simple answers to each of those questions.

"Can the bank come after me for the deficiency?" In California, on the first loan, whether short sale, foreclosure, primary residence or investment, purchase money or refi, the answer is "NO." The law was clarified effect January 1, 2011. If you have a second loan, the answer is maybe. If purchase money, no. If a refi...well...Alex Munn of BPE Law Group will give you the straight answer. And he will be at a FREE workshop on June 30. Click here for more info.

"Can they go after other assets?" California is a single recourse state, meaning they can go after you or the property. 99.9% of banks use a non-judicial foreclosure because it is easier and less costly. In that process, they take the house...and that's it. The deed of trust that you signed to get the loan and the house basically say "as long as you make the payments, you keep the house. If you stop making payments, the bank gets the house." Find out more at our seminar.

"Will there be tax consequences?" Thanks for the debt forgiveness act of 2007 good through the end of 2012, the IRS will not tax you for the forgiven debt on your primary residence in a short sale or foreclosure. Same is true of California. On income property, it gets tricky. There will be a forgiven debt that could be taxable, but you also probably experienced a loss on the property. The two could like offset or even result in a loss for tax purposes. We will have a tax expert, Dona Riolo at our seminar as well, to address the most common tax questions related to short sales and foreclosures. Click here and sign up.