REO (BANK OWNED) REAL ESTATE SALES DATA FOR FOLSOM, CA -APRIL 2010
Folsom, CA REO (BANK OWNED) SALES DATA FOR April 2010
This is a continuation nearly three year study of Bank Owned home sales data for Folsom, CA. This report covers REO homes sold in April 2010.
There were 13 REO homes sold in March, one less than in February. The days-on-market decreased to 54, up from 53 the previous month. Only one of these homes had been on the market for over 100 days. In April only 16% of the bank owned homes sold in less than two weeks, this is an unusually small percentage.
The 13 homes sold represent 26% of all homes sold in Folsom, on the low end of the normal range. There are far fewer Bank Owned homes available on the market and short sale homes continue to have an impact.
The overall home inventory in Folsom increased significantly in April to 4.3 months, up from 2.7 months in March. 
That is close to the 4 month inventory in April of 2009. A neutral market is considered a 6 month inventory. So, we are still looking at a seller’s market.
The cost per square foot of REO homes in April jumped back up to $ 175. It had been $ 162 in March. The April number is the highest since March of 2009. The cost per square foot of all homes sold in January increased to $ 181, up from $ 177 the previous month.
The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO sales represented a 3% savings for REO buyers, a little less than normal.
The overall sales price for REO homes was 96.8% of the final asking price. A full 47% of the buyers paid more than the asking price for their bank owned home. The banks are still pricing these homes well and in March there was a $ 6 dollar per square foot savings, compared to the cost of all homes sold. When we apply that price difference to a 2500 square foot home it represents a $ 15,000 savings, something worth considering when selecting a home.
The data follows:
Did The HomeBuyer Tax Credit Work?
The Post Mortem On The HomeBuyer Tax Credit- Did it Work?
As with any government program that is considered “targeting”, there are many households that liked the HomeBuyer Tax Credit. Most of the program’s naysayers however, are just philosophically against the government getting involved in stimulating the economy or at least parts of the economy. They did not like Cash For Clunkers, the TARP bailouts and certainly tax credits for home buying. But with the expiration of the deadline, some quick analysis indicates great success and with this success, renewed optimism in the housing markets.
Once caution that will have to wait a few months to play out is this: With the ending of the generous tax credit, where will the housing market go? What’s the next incentive program to get houses sold?
The rush beat the deadline increased home resales by 6.8 percent in March and will impact sales figures through 
June. Purchases of new houses, (when a contract to buy is signed), surged 27 percent in March, the biggest jump since 1963, according to U.S.Commerce Department.
In an informal survey of Realtors, almost half said the tax credit caused enormous activity or at least getting consumers “thinking” about buying a new home. At the same time, detractors said that homes were going to be sold anyway and you just gave a windfall to those that jumped.
“It’s true that a lot of people who got the credit might have bought without it, but they might have bought in 2012 or 2013,” said Senator Johnny Isakson, a Republican from Georgia, who worked for 30 years as a real estate agent. He was instrumental in adding an extension to the original tax credit timeframe.
The Facts:
1) First-time home buyers propelled the housing recovery in March, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
The survey indicated that 48.2 percent of March’s sales were to first-time homebuyers. These consumers jumped in because of increased purchasing power, low mortgage rates and lots of inventory caused by the foreclosure and short sale activity. The latest survey found that short sales accounted for about 20% of sales activity.
2) Real Estate professionals will tell you that all the radio ads and brokerage ads created momentum to “think” about homeownership. Even if a family did not buy and utilize the tax credit they are asking questions and charting a course for homeownership. Eventually if they become homeowners, it may be due to the positive benefits of homeownership propelled by the Tax Credit.
3) Last month the IRS says 1.8 million people so far took advantage of the tax credit pumping $12.6 billion into the economy. It is estimated that a new homebuyer spends more than $7,000 in the first two months after moving. That economic multiplier impact is what fuels tax incentive programs.
4) Sustained Home Sales Activity Helps All Home Owners. To the extent that homes are now being sold, first timers are usually buying starter homes. The ones selling their starter homes generally move up the chain and support a more robust housing market helping home values to rise. Also as a large percentage of the activity is short sales and foreclosures, the local market place benefits buy having more stable neighborhoods and a robust tax base.
5) What’s Next- Aside from the merits of targeting homeownership for tax incentive the government views the program a success. As the tax credit has now expired it has proven that incentives work. It is expected that many other types of incentives will come about from the private sector.