Foreclosures

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 ...

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....

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