Buyers

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,...

Sonoma County Home Sales Resume Pace 2 Months after Tax Credit Expiration

A look at the latest real estate sales trends for Sonoma County, based on sales figures through July 2010. The market is somewhat stabilized, with a greater diversity of properties for sale from "regular" folks, and less of a reliance on distressed properties. Newly pending sales through July matched the high rate of sales from April 2010, when the federal tax credit was about to expire....

Wine Country and Roses

I am embarrassed about my infrequent posts as of late. I have been on the run, working with buyers and sellers of Sonoma County real estate. Out of town buyers are out in force, looking for that special retreat property, horse property or wine country second home, from Sebastopol to Healdsburg, Santa Rosa to Guerneville. In the last year I have worked with buyers from San Francisco, Berkeley, Marin County, Provence, St. Louis, New York, Las Vegas, Seoul, Los Angeles, Burlingame, Palo Alto and San Jose, all in one stage or other of the Sonoma County home buying or home owning process. Meanwhile, gardens are in peak bloom, the grapevines have leafed out. My neighbor's pinot has set fruit I noticed today. The ROSES are in full force. Everywhere you go, from country lanes to in town, there is a riot of roses. I'll leave you with a few pictures until my next post. [caption id="" align="alignnone" width="450" caption="Looking through a red rose and Russian River Zinfandel to a horse pasture beyond"][/caption] [caption id="attachment_931" align="alignnone" width="450" caption="A view of a Sonoma County horse pasture and vineyard through climbing rose New Dawn"][/caption] [caption id="attachment_932" align="alignnone" width="337" caption="A riot of roses climb the fences along a Sonoma County Driveway"][/caption]...

Important Changes in Lending and Tax Credits-Home Buyers Take Note!

(NOTE: Today I welcome Otilia Sullivan of Princeton Capital, as a first time contributor to Wine Country and Horses. Otilia has provided sage mortgage advice to many of my clients and I trust her ability to find the right mortgage for my clients in a timely manner. She is extremely knowledgeable about the mortgage markets and what it takes to qualify for a home, or to refinance. Since there are so many changes on nearly a daily basis, please don't hesitate to contact us with any questions you might have.) Welcome Otilia! Don't forget that the end of the federal home buyer tax credit is in sight. This credit provides $8,000 to first time home buyers. First time buyers are defined as those who have not owned a home in the previous 3 years, so the government's definition might be different than yours. The credit also provides $6,500 to current home owners. We have heard nothing about any extensions. Borrowers need to be in contract by April 30 and close by June 30. Click here to find the details of the federal tax credit, or ask your CPA if you qualify. Also the Federal Housing Administration, or FHA upfront Mortgage Insurance Premium (MIP) is increasing from 1.75% to 2.25% with case numbers issued after April 5. Many first time buyers in the North Bay are using FHA loans since the credit restrictions are not so steep, and the down payment can be as low as 3.5%. So if your loan is $200,000.00, your MIP would have been $3,500.00 last through April 5th. From today on it will change to $4,500.00. This is not an out of pocket cost. It is rolled into the loan payments, but nonetheless it is an expense of the loan. There is a lot of talk about how people can take advantage of the newly revised $10,000 California State Homebuyer Tax Credit. We will discuss the pros and cons in our next post! If you can't wait till then, here is a link to the California State Franchise Tax Board's latest memo on the revised credits....

If You Lived Here You'd Be Home by Now–Scenes from Barrel Tasting Weekend

Today's rain should clear up and bring sunny skies and warmer temperatures for the second weekend of this year's Barrel Tasting Event sponsored by WineRoad, a group of northern Sonoma County wineries from the Russian River, Dry Creek and Alexander Valley appellations. If you are like me, perhaps your first exposure to the Sonoma wine country and our gorgeous back roads came from visiting friends during tasting events such as this. After many repeat visits, you begin to think, after a long weekend of wine tasting, gee, if I lived here, I'd be home by now....

Auction Action at a Trustee's sale

Good blog buddy, Dave Blockhus, of Coldwell Banker in Los Altos, recently shot this video overview of a home sale on the courthouse steps in San Jose. It is about 4 minutes long and provides a example of auction action occurring all over the US, including Sonoma County. There were so many home auctions in Sonoma County during the past year that Sonoma county is asking auctioneers to move their business elsewhere as they are clogging up the hallways of the county buildings. Cash investors with certified funds are the only ones welcome at these sales and they are out in force. Fully 18% of homes sold under $500,000 in Sonoma County were cash sales. I am guessing most of those went to investors. Many of the new listings since Christmas have been bought at auction (and some off the multiple listings) and are being remodelled and flipped by investors. I am seeing homes purchased for $250,000 to $350,000 (cash and as is) for example, which are brought back on the market in 60 to 90 days. In a typical scenario one of these homes closed in November or December. A construction crew moves in to put in new flooring, baths and kitchens, paint inside and out, lay some sod and voila-the house is back on the market in 60-90 days, staged and price from $400,000 and up. Some investors are doing a really nice job with quality work, employing crews that might otherwise be working on new home construction. Others are doing the bare minimum beyond minimal cosmetics. There are restrictions on the sales of these homes to FHA buyers, who comprise the bulk of the first time buyer market here in the county. These restrictions were just loosened January 15, 2010, effective February 1, so that a 90 day sale moratorium has been suspended for a year. Previously, an FHA buyer was not eligible to purchase a distressed property less than 90 days after it was previously sold. More restrictive appraisal and valuation methods will continue to apply for FHA buyers interested in these homes. If the home is priced more than 20% over the previous sales price, the FHA lender will require either a secondary appraisal or an itemized list of improvements to justify the new higher price. One property I saw recently in Sebastopol on a half acre was purchased at auction for $350,000....

Farewell to 2009, Welcome to 2010 and a New Decade

With 2009 moving into the rear view mirror, there has been much speculation among agents, clients and the press about 2010 and what portends in the housing market. Inman News recently published a sobering assessment of the events that will impact real estate markets in 2010, from increasing mortgage rates, tightening FHA credit standards, high unemployment and the expiration April 30th of the buyer tax credits. Real estate agents and brokers typically look forward to spring as the season where homebuyers come out in force and sales pick up. In 2010, the uncertainty created by the financial crisis makes it harder to bank on a seasonal uptick in sales -- particularly in markets hit hard by unemployment. Further complicating matters down the road are three potentially destabilizing events that are expected to occur in a tight timeframe during the spring buying season: * At the end of March, the Federal Reserve is expected to wind up a $1.25 trillion program that's kept mortgage rates low. * The Federal Housing Administration's announcement that it plans to tighten underwriting standards could take effect as soon as April. * Congress is expected to allow the newly expanded homebuyer tax credit to expire, closing the door on buyers not under contract by April 30 and closing by June 30. Economists must rely on a certain amount of guesswork in predicting what impact these changes will have when drawing up their forecasts for 2010. Many expect unemployment won't peak until next year, and it's almost certain mortgage rates can only go up from record lows. But housing was hammered so badly, and for so long, that most forecasters expect housing prices to stabilize and sales to pick up in 2010, even if economic growth doesn't spring back as fiercely as it usually does in a recovery. "We are definitely in a recovery now, but this has been such a severe recession -- we think the financial crisis and the credit retrenchment that's occurred means this is going to be a fairly anemic recovery," said Michael Fratantoni, the Mortgage Bankers Association's vice president of research. America has moved from a manufacturing to service-based economy, meaning "there's not as much potential for a snapback" from a recession like the Reagan-era boom of the 1980s, Fratantoni said. These events certainly will impact markets nationwide, but each area will respond differently. Many of us...

Electronic Document Signing Makes Life Easier for Home Buyers (and Realtors)

Many many home buyers in Sonoma County live out of the area--they buy second homes here, they are relocating for work, or want to experience life in the wine country first hand. Many home buyers, even if they are local, conduct much or their search on line. Why not have as much of the purchase transaction paperwork be conducted on line too? This struck home this afternoon as I prepared an offer for out of town clients to sign. Their scanner was older and it was not easy to assemble the pages to fax back to me--believe me I had the same problem before I got a new scanner. What a tedious process for them! Or I have had illegible faxes come through as a result of too many generations of faxing and scanning of counter offers and counters to counters, ad infinitum. Every one involved tears their hair out and runs around wasting time on mechanics of the paperwork, when it is the content of the documents that is most important! Pretty silly. Enter the paperless transaction, beginning with the electronic signing of contract documents. It is easier than it might sound! What is an electronic signature? An electronic signature is any legally recognised electronic means that indicates that a person adopts the contents of an electronic message. There is a better way. Our new paperless transaction system at Prudential California Realty will be rolled out company wide in the first quarter. Hallelujah!!!!!! So many trees will be saved and countless hours chasing paperwork with also be saved by realtors and their clients. My client asked me about electronic signing--what does it mean? What does it look like? What are the basic facts? You can click on the link above for a Wikipedia article about the concept of electronic signatures. For more specifics, here is a link to the system we will be using, Docusign by Ziplogix. Here is a brief (2 minute) and not too fancy overview of how you, as a buyer or seller, would use Docusign to sign documents electronically. I'll have more posts about the whole process of greening the real estate transactions and preventing grey hairs for all the parties involved! ...

How can I tell if a home for sale on the MLS is available?

If you are searching real estate on line (and who isn't?) it is easy to be confused about the availability, or sales status, of properties, when you are focused on important details like price, location and pictures. It helps to be familiar with the terms. After all you don't want to get excited about a property if it's status is "Pending." "Contingent/Release" doesn't mean that the property has been released back into the market. If you are a seller evaluating the competition for your property when it goes on the market, it can be useful to see how properties are moving, so keeping an eye on alternative status's (beyond active) can provide insight in to the velocity of the market for your type of home. So let's do a little primer. ( A word of caution: Be aware of the source of listing data on the site you are searching. If it is not a direct feed (IDX feed) from a Multiple Listings Service, the data (especially status) may not be accurate. Many sites such as the websites of print publications and other aggregators are not necessarily up to date.) ACTIVE This means that the property is technically fully available, i.e. a purchase contract has not been "ratified" by an able buyer and a willing seller. Further caution. When is an active listing not really active? Some short sales and foreclosure (REO) properties may have multiple offers on the table and not be accepting further offers, but the parties have not fully ratified the purchase agreement and bank addendum so the status is not showing as Contingent. This has been a source of friction between MLS' and listing agents for these properties. It is a murky area because until the contracts are ratified, technically the property is active. It is a good idea to ask your agent to check the agent confidential remarks to see if additional offers are being accepted. These days, with so few homes for sale, I generally check with the listing agent to determine availability for the properties my clients are most interested in. CONTINGENT, CONTINUE TO SHOW This status means that the buyer and seller have come to terms and ratified a purchase agreement, but that the buyer has made their offer subject to the removal of certain contingencies, which can include, but not be limited to: Loan Contingency-...

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