BANK OWNED (FORECLOSURE/REO) HOME SALES DATA FOR EL DORADO HILLS, CA – APRIL 2012
This is the latest monthly report of our more than four-year study of bank owned (foreclosure/REO) home sales in El Dorado Hills, CA. This report covers April 2012.
There were 11 bank owned (foreclosure/REO) homes sold in El Dorado Hills in April, three less than in the previous month.
The average days on market increased from 47 in March to 49 in April, yet only one of the homes had been on the market for over 100 days. Only one the homes that sold had been on the market for two weeks or less, a much smaller segment than normal.
The 11 bank owned (Foreclosure/REO) homes that sold represent only 17% of ALL homes sold in El Dorado Hills this month. The lower inventory level of bank owned homes is the reason.
The available inventory of bank owned (Foreclosure/REO) homes in El Dorado Hills dropped to a .6-month supply in April, down from a 1.0-month supply in March. There have been two spikes in bank owned home inventory in El Dorado Hills in the past fifteen months. The inventory level exceeded a two-month supply in February of 2011 (a 2.7-Month supply) and December of 2011 (a 2.4-month supply).
The inventory for ALL homes available edged up to a 2.1-month supply in April, up from a 2.0-month supply the previous month. Pundits tell us that a 6-month supply is a neutral market, so we are still looking at a strong seller’s market for ALL homes in El Dorado Hills, both bank owned and non-bank owned.
The average cost-per-square-foot for Bank Owned (Foreclosure/REO) homes dropped to $ 131 in April, down from $ 137 the previous month. The average cost-per-square-foot for ALL homes sold in El Dorado Hills in April was $ 154, up four dollars from March. In fact, that is the highest cost per square foot for any month since May of 2011, when it was $ 155.
The overall sales price for bank owned homes was 98.6% of the final asking price and 93.1% of the original asking price. Forty-six Percent of the buyers paid the full asking price or more in April for their bank owned home, a slightly larger segment than normal.
Note that there was one home sold, line item four in the chart below, which sold for 115.2% of the final asking price. Although it is not unusual for buyers to pay more than the asking price on a bank owned (Foreclosure/REO) home, it is unusual for them to pay over $ 50,000 more. That one sale has skewed the figures for April.
When based on the cost-per-square-foot for ALL homes sold, bank owned homebuyers paid 15% less in April. That is a $ 23 pre-square-foot savings. When applied to a 2500 square foot home, that represents a savings of $ 57,500, a substantial sum.
If you have any questions about purchasing any home in El Dorado Hills, an El Dorado Hills Bank Owned Home, or a Bank Owned Home anywhere in the area, feel free to give us a call (916) 337-0658.
The data follows:
BANK OWNED (Foreclosure/REO) HOME SALES DATA FOR FOLSOM, CA – APRIL 2012
This is the latest monthly report of our more than four-year study of bank owned (Foreclosure/REO) home sales in Folsom, CA. This report covers April of 2012.
The average days-on-market decreased from 36 the previous month to 30 in April. None of the homes had been on the market for over 100 days, and only 20% of the homes that sold were on the market for two weeks or less. That is a much smaller segment than normal.
The 10 Bank Owned (Foreclosure/REO) homes that sold represent only 12% of all homes sold in Folsom this month. The very low bank owned home inventory is the reason this segment of the market is so low and it seems to be shrinking.
The available inventory of bank owned (Foreclosure/REO) homes in Folsom decreased to a 1.0-month supply, down from a 1.1-month supply the previous month. That inventory level has not exceeded a two-month supply for over a year. The inventory for bank owned homes in Folsom peaked at a 2.8-month supply in January 2011, and has not reached that level since.
The available inventory for ALL homes available remained at a 1.1-month supply for the second month in a row. We have not had an inventory level of more than a three-month supply since February of 2011. Pundits tell us that a 6-month supply is neutral market, so Folsom remains a strong seller’s market for both bank owned homes and all other homes on the market.
The Folsom market reflects what is happening in the rest of California and the western U.S. Inventory levels are very low. This factor is going to have an impact on housing prices in the very near future.
The average cost-per-square-foot for bank owned (Foreclosure/REO) homes was $ 131 in April, down from $ 137 in March. The average cost-per-square-foot for ALL homes sold in Folsom in April was $ 153, the same as in the previous month. It has been moving within a narrow range for the past year and has not fluctuated more than $ 3 since July of 2011, when it reached $ 161.
The overall sales price for REO homes was 98.8% of the final asking price and 96.2% of the original asking price. In addition, 40% of the buyers paid the asking price, or more, for their Folsom bank owned (Foreclosure/REO) home in April.
Based on the cost-per-square-foot, bank owned homebuyers saved twenty-two dollars per foot on their bank owned home compared to the cost for all homes sold in Folsom this month. When applied to a 2,500 square foot home, that represents a savings of $55,000: a tidy sum
Given the overall data, it is obvious that homeowners who do not have to sell are keeping their homes, rather than accepting current market value offers. As prices rise, more homes will be placed on the market.
If you have any questions about purchasing a home in Folsom, a Folsom Foreclosure, or an REO anywhere in the area, feel free to give us a call (916) 337-0658.
The data follows:
CANCELLATION OF MORTGAGE DEBT TAX–Tick Tic, Tick Toc
Did you know that if a creditor forgives any debt that you owe, the IRS tax code requires that creditor to issue a 1099 reporting the shortfall? The tax code recognizes the shortfall as income, added to your other income and you must pay income taxes on the total dollar amount.
Unfortunately, those having trouble making their mortgage payments and facing foreclosure can expect their lenders to do exactly that, if the lender ends up selling the property at a foreclosure sale. They will also comply with the tax code if you sell your home in an approved short sale and the lender has to forgive any part of your loan commitment. This is not exactly good news for distressed homeowners. All they need is a huge tax bill after they have lost their home.
Fortunately, the government stepped in several years ago and enacted legislation that provides an exemption for those where their lender cancelled debt on their principal residence. Unfortunately, the Mortgage Debt Relief Act will expire on December 31, 2012. Although there is a possibility of an extension, we would not want to bet the ranch on that happening, given our current economic environment.
For those who plan to let their homes go through the final phases of a foreclosure, there is no way to control the timeline. Homeowners considering a deed in lieu may have a little more control of the timeline.
Those homeowners considering a short sale should start the process immediately. Although many of the loan servicers are making every attempt to speed up the short sale process for qualified borrowers, they are still taking many months to complete. If you started today, and your loan servicer is very slow, you may not get the final approval and be able to close before that December 31, 2012 deadline, looming in the background. It would be prudent to find and Realtor® experienced and trained in dealing with short sales, so that you can get started as soon as possible.
We have included a video made by Alex Charfen, CEO of the Certified Distressed Property Institute (CDPE) to help you understand the situation. Realtors® with the CDPE designation are trained to help distressed homeowners avoid foreclosure.
If you have any questions, of know of someone in need of assistance, please call us at (916) 337-0658. We are here to help.
WHEN IS IT TIME TO REFINANCE AGAIN
Freddie Mac’s weekly mortgage rate survey reveals that the average interest rate on a 30-year fixed rate mortgage was 3.84%, down from 3.88% the previous week. Last year at this time, the rate was 4.71%.
Much depends on the individual borrower’s situation. Naturally, you must have the income to qualify for a new loan and you must be able to verify that income to the lender’s satisfaction. You must also have sufficient equity in your home to meet the lender’s guidelines. Most conventional loans limit the loan amount to 75% of the home’s present market value.
Note one exception is the HARP-2 loan program that will allow specific homeowners to borrow up to 125% of the current market value of their home. The guidelines limit those who may qualify to a small number of homeowners.
One important question to ask is, exactly how long do I plan on living in my present home? If you plan to sell in a year or two, a refinance is not likely to pencil out. It will take some time to recover the costs associated with a refinance.
Another factor in the equation will be your present interest rate. Those paying six or seven percent will have greater financial motivation than those who just refinanced last year at less than five percent. The delta (difference) between your present monthly payment and the proposed refinance payment will determine how much or how little you may save and how long it will take to recover refinance costs.
The formula is simple. Determine the proposed monthly payment on your new loan see how much lower it will be than your present payment. Divide that number into the cost of your refinance and you will have the payback period. Therefore, if your current payment is $ 1700 per month and the proposed payment will be $ 1600, the delta is $100.
If the refinance will cost you $ 3000, your payback period will be 30 months, or five years. The savings after that five- year period are your gain for the refinance.
It will probably be more difficult to learn what your refinance costs will be than anything else in this exercise. Find a local loan consultant with whom you feel comfortable dealing and enlist their assistance. They will have to know about your financial situation in order to give you accurate information.
It may be time to refinance your El Dorado Hills real estate!
EL DORADO HILLS, CA HOME SALES DATA – APRIL 2012
The purpose of this post is to provide those interested in the El Dorado Hills, CA housing market data about that market. This report covers April 2012, and the fourteen previous months.
The first chart lists the cost-per-square-foot for all homes sold in El Dorado Hills by month. Although there is a slight fluctuation from month to month, the viewer can see that there is no downward trend. When we look at year-over-year prices, February of 2011, was three dollars lower than the February 2012 number, March of 2011 was three dollars higher than January 2012 and April 2012 was three dollars lower than the previous April. We submit that the market is bumping along at the much-touted “bottom.” Those potential buyers who decided to remain on the fence, “until prices hit bottom” no longer have a reason to wait.
The second chart shows the level of inventory, (the number of homes for sale divided by the number of homes sold each month). Pundits tell us that a six-month inventory is a neutral market.
We can see that the El Dorado Hills market is, and has been for some time, a seller’s market. We had a buyer’s market in February of 2011 and April of 2011 had an inventory one third as large as April 2012. In fact, we have been bumping along in the two to four month range for the past year.
The media is finally starting to realize that the market has changed.
Over a year ago, we posted an article warning about the pending housing shortage. We continue to stand behind that prediction. All you have to do is ask those actively looking for a home.
It is going to get worse. The demand will result in price increases and with those increases; more homeowners will put their homes on the market. Unfortunately, without any new home construction in the past five years or more, we will still be short of inventory.
If you would like to see this data for other cities and towns in our area, feel free to contact us at (916)337-0658 or e-mail Mike@BuyYourVilla.com.
To use the very best Internet property search tool go to www.BuyYourVilla.com.