California Median Home price increases in April
Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, according to C.A.R.’s April sales and price report.
“It’s likely that the state tax credit that went into effect May 1 created an incentive for many buyers to postpone closing escrow so they could take advantage of both the state and federal tax credits that were available,” said C.A.R. President Steve Goddard. “We should see the pace of closed sales edge up in May and June as these tax-incentivized transactions close.
The median price of an existing, single-family detached home in California during April 2010 was $306,230, a 21 percent increase from the revised $253,110 median for April 2009, C.A.R. reported. The April 2010 median price increased 1.5 percent compared with March’s $301,790 median price.
“The strong demand for distressed properties continued unabated last month, and overall, inventory remains constrained in most segments of the market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Listings in April increased compared with a month earlier, typical for this time of year, as more sellers entered the market. At the $300,000 and below price point, the number of homes for sale is at a 3.3-month supply, well below the historical average of seven months.”
One in five homes sales are foreclosers
Nationwide foreclosure resales accounted for 22.2 percent of all homes sold in the United States of America.
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One out of 4 foreclosers go to investors
In Sacramento County one in four foreclosure sales went to investors during the 2009 year.
Prices have come down enough so that rental properties purchased with cash can yield a 5 to 9 percent return, much better than the stock market. This return does not include home appreciation.
Price point homes go pending quickly, usually in 5 to 10 days.
Nine out of ten foreclosures priced under 200 thousand sell for over asking price with multiple offers.
Multiple offers are the norm with banks instructing buyers to bring their highest and best- no time for countering back and forth.
I have been up against 20 other cash offers on well priced foreclosures.
One HUD foreclosure priced at 53 thousand accepted an offer for 136 thousand. This is on 10th ave in Tahoe park! No joke, see this listing here……….. http://prospector.metrolist.net/scripts/mgrqispi.dll?APPNAME=Metrolist&PRGNAME=MLSLogin&ARGUMENT=Ok7KmNi58nbInAxeCH8GTewqhdlV8u%2BS18SoY4VDiZQ%3D&KeyRid=1&Include_Search_Criteria=
First time buyers that need financing for their purchase are forced to offer more than the cash buyers for their offer to be accepted.
Waiver of the 90 day flip rule helps buyers and sellers
The 90 day flip rule waiver reduces the time an investor has to wait to sell their recently purchased property.
Most first time buyer use FHA financing to make their purchase because of the low down payment requirements. FHA guideline mandated that borrowers can not purchase a home that has been “flipped” within 90 days regardless of the value of the property. This has dicourage investors from buying and re-habing properties because so many of the potential buyers could not qualifiy to buy the property due to the 90 day flip rule.
Buyers that need financing have found themselves unable to compete with cash buyers- especially with distressed properties which have imperfection that lenders would rather stay away from.
Summary
Investors will buy, fix and resale more properties which will create more inventory for buyers that need financing for their purchase.
The waiver of the 90 day flip rule is set to last until 2/1/2011.
Real Estate investors swoop up sweet deals
Real estate news for the Sacramento area
- Residential- single family homes priced under one hundred thousands dollars are the investor’s delight in the Sacramento area.
- Multiple, cash offers from real estate investors are the norm in Sacramento-especially with homes priced for less than one hundred thousand dollars.
- Most foreclosure properties under $100,000 get multiple offers within 2 days after being listed on the Sacramento MLS.
- Most properties asking $100,000 or less sell for over the asking price.
- Properties listed under $150,000 and less sell quickly, usually less than 34 days after being listed.
California Unsold Inventory Index declines to 3.8 months for December
The unsold inventory index indicates how many months it will take to deplete the supply of homes at the current sales rate. The current rate of 3.8 months is the lowest it has been since 2005. In December of 2008 the California Unsold Index, or UII was 5.8 months. Real estate investors acquiring foreclosures within three or four days of being listed can explain the low Unsold Inventory Index in California. Homes as low as forty or fifty thousand are selling in Sacramento to cash buyers. With so many real estate investors presenting cash offers banks are not willing to look at offers that require financing.
Refinance applications increased after the holidays
Loan apps are up after the borrowers finished up with holidays. Interest rates are still hovering around 5 to 6 percent. Each time rates spike up borrowers and real estate practitioners wonder if they will come back down.
News blurbs calling for a double dip in home prices are not accurate. Real estate always slows down in the winter. The foreclosure homes continue to sell like hot cakes with prices that are stable and rising. The majority of homes selling are foreclosures and short sales.
Sacramento Median home price is 177k.
For re-sale homes in the Sacramento the price is $177,000 as of November. That is up 2 thousand form last November. This is the first year to year increase that hase been seen since May of 2006.
