Happy New Year!
It's time for resolutions and change so I've changed the format of my newsletter for 2009.
Year end statistics won't be released for another 7-10 days but I did attend Michael Lyon, President of Lyon Real Estate's economic update this morning.
In a quick snapshot sales are up and inventory is down. In a normal market that's fabulous. Lets dive deeper to understand the different segments of our market. Mainly Bank Owned (REO) vs. a standard sale.
Currently there are over 6,900 non-bank owned homes on the market and over 2,500 bank owned homes listed in the tri-county area. 85% of sales in Placer County are currently bank owned. 1 year ago it was 65-70%. In other words banks are attracting the price sensitive buyers. Over the last 12 months there has been a 168% increase in sales for bank owned homes. Why is this? Banks are making business decisions, not personal.
The graph below shows the average bank owned list price compared to the average bank owned sold price for the tri-county region. They are almost perfectly parallel. Banks are well aware we are in a declining market. When determining the list price, banks get an appraisal and then list the home 3-5% below market value. By the time the listing sells and the buyer obtains their own appraisal the market has gone down at least that much.
My best advice to sellers who have a need to sell is to spend $350 on an appraisal and follow the banks lead by listing it 3-5% below value. It's the best way to attract a buyer quickly and confirm you'll close at an appraised value.
We're still in a declining market so selling a home 5% below market value today is always better than the market dipping down further than 5% at a future date.
If you have a home over $1MM that you are thinking about selling please contact me as data is quickly changing in that market segment.
If you're a first time buyer or your kids are graduating college and you want to help them with their first home, this is the best 1st time buyer's market we will see in our lifetime. Couple that with record low interest rates (we saw 4.75% last week and it's still hovering around 5.25%) and you can't beat buying that entry level home.
A lot of first time buyers have a fear they can't compete with cash investors buying rental properties. The good news is only 15-20% of sales under $200K are investments. 80% are 1st time buyers.
Short sales are abundant right now and it can be a confusing process for 95% of people out there. Please call me to explain a short sale. The closing ratio of short sales has actually increased to about 25% now that banks have processes in place. With the right agents working on the deal they should close.
I look forward to and appreciate all your referrals. Best wishes for a wonderful 2009!
Sincerely,
Kia Kapci, Realtor
Executive Associate
MLS# 80108814
