BANK OWNED (REO) SALES DATA FOR FOLOSOM, CA MAY 2010
Folsom, CA REO (BANK OWNED) SALES DATA FOR May 2010
This is a continuation of a three year study of Bank Owned home sales data for Folsom, CA. This report covers REO homes sold in May 2010.
There were 17 REO homes sold in March, up from 13 in April. The days-on-market decreased to 45, down from 53 the previous month. Only one of these homes had been on the market for over 100 days. In May 30% of the bank owned homes sold in two weeks or less.
The 17 homes sold represent 20% 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 dropped back down to a 2.7 month supply after s spike in a February and April to a 4.2 month supply. A neutral market is considered a 6 month inventory. So, we are still looking at a strong or stronger seller’s market. Available inventory in Folsom has not reached the six month level in well over a year. It may be a seller’s market in some areas, but that has NOT been so In Folsom.
The cost per square foot of REO homes in May dropped back down to $ 163 from the April $ 175 number. It has been running in a narrow range of $ 180 to $ 156 over the past fourteen months. The cost per square foot of all homes sold in January decreased to $ 181, up from $ 176 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 7% savings for REO buyers.
The overall sales price for REO homes was 97.5% of the final asking price. A full 30% 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 $ 13 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 $ 32,500 savings, something worth considering when selecting a home.
The data follows:
ARE YOU PREPARED FOR THE HOUSING SHORTAGE?
ARE YOU PREPARED FOR THE HOUSING SHORTAGE?
Ready or not, we will be facing a housing shortage in very short order, many experts indicate that it will hit as early as 2011.
It seems ludicrous to think that there will not be enough homes to meet demand after our experience of the past few years. The housing market cycle has fluctuated wildly in recent years with prices skyrocketing year after year and then plummeting. Of course, any pretence of equilibrium in the market has long since disappeared. Banks remain reluctant to approve loans to all but the most credit worthy and new home construction has become a phenomenon of the past.
Our population is still growing and families still need a place to live. The old forces of supply and
demand continue in play. With too little supply, the demand will influence both rental properties and home sales. The prices that we have seen fall so far will start to rebound and rental rates will increase steadily.
The major question is how quickly will the financial institutions react? Will they loosen the reigns and allow more buyers to qualify for financing or will they remain conservative? We are betting that investors will continue to demand higher returns and cause a loosening of credit, although not to the same extent as happened in recent years.
Landlords will reap the rewards from higher rental demands. Perhaps they will make up for some of their losses from the past few years. Homeowners will benefit from the rebound in property values. Although we do not see home prices skyrocketing as they did in 2004 and 2005, they will rebound. Interest rates will also increase. They cannot stay at present low levels very much longer and will rise as the economy improves.
Potential homebuyers may find these conditions are not in their favor. Those in a position to purchase a home would be well advised to do so NOW, while market conditions are working to their advantage. Most of us operate a little behind the curve and miss the best deals because we keep waiting for validation of the present market conditions. Would it not be better to act BEFORE everyone else does and reap the benefits of foresight?
Check out the latest Forbes article on this subject: http://realestate.msn.com/article.aspx?cp-documentid=23505825
Or Money Magazine: http://money.cnn.com/2010/06/15/real_estate/new_housing_bubble/index.htm
PROPOSITION 8 — PROPERTY TAX RELIEF FOR HOMES THAT HAVE DROPPED IN VALUE
Proposition 8 –Property Tax Relief
California homeowners may or may not be aware of Proposition 8.
In 1978 California voters passed this constitutional amendment that allows a temporary reduction in the assessed value of their property when that property suffers a decline in current market value.
When, on January 1 of each year, the market value of a property falls below the assessed value, the assessor is obligated to review the property and enroll the lesser of the two values. If it is determined that the market value of the property at that time is less than the assessed value your property’s assessed value will be adjusted to the level of its current market value. This will result in a reduction of your property tax for that year.
To apply, contact your county assessor’s office. Some counties require the tax payer to complete a form requesting participation in the Proposition 8 outlined process, others will include you in the program based on information that you provide on the telephone.
Some counties have programs in place that review properties based on the purchase date. It is wise to contact them and ensure that your home is in the program. For more data go to:
http://www.boe.ca.gov/proptaxes/assessors/htm .
SCAM ALERT—NO FEE NECESSARY FOR THE VALUE REDUCTION
There is no reason to pay for a review that is required by law and will be performed FREE! Various private companies send mailings to property owners offering their services to pursue a reduction in the owner’s property taxes. These companies may charge hundreds of dollars to file for a reduction in value on behalf of the property owner. Some companies even impose late fees if the application is received after an arbitrary deadline. Homeowners do not need the services of a private firm to seek a property tax reduction. State law requires county assessors to review all requests for property value reduction for FREE! |
Note that the reduction is not permanent. Each year on January 1 participating properties will be reviewed until their values return to the former Proposition 13 values.
If you do not agree with the assessor’s findings you may file a formal appeal with the County Assessment Appeals Board or the County Board of Equalization. These boards are independent bodies established to resolve differences in property value opinions between the county assessor and property owners.
For more information go to:
http://www.boe.ca.gov/proptaxes/pdf/filingperiods.pdf
NATIONAL MORTGAGE DELINQUENCIES FOR THE 4th QUARTER OF 2009
The Mortgage Banker’s Association has released the National Mortgage Delinquency statistics for the forth quarter of 2009. As expected, the numbers continue to raise. The following chart prepared by the Distressed Property Institute reveals these statistics. They break them down by type of mortgage and status within the foreclosure process.
The first stage is when the loan is in default, meaning that the loan payment is more than 30 days late. The second stage is in Foreclosure, meaning that the bank has taken the property back and they now own the property.
The chart also shows the unemployment rate and the underemployment rate, both of which have a direct impact on the delinquencies now and in the future.
As a mamber of the CDPE organization, I agree that we want the public to be aware of the current market conditions. Feel free to call if you have any questions.
CONSUMER ALERT–REFINANCING CAN BE A MISTAKE!!
CONSUMER ALERT!!!
Homeowners should be aware of the fact that there can be a danger to refinancing your home if your existing loan is a “purchase money” loan.
Here is the deal. California is a non recourse state. That means that if a homeowner runs into financial difficulty and can not keep up with their mortgage payments, they are better off dealing with their lender(s) if the loan(s) are purchase money loans. A purchase money loan is one which was obtained strictly for the purchase of a property. If that home owner ends up in a short sale situation (trying to sell the property for less than they owe the bank) their chances of having the outstanding balance on their loan(s) forgiven is covered by California statute.
If, however, they end up in a short sale situation after they have refinanced their loans, the lending institutions have legal recourse to come after them for the unpaid balance of their loan. They can loose their home and still owe the bank thousands of dollars.
It would be a prudent move to check out the impact of a refinance if the probability of delinquency and/or a short 
sale in the future. Refinancing to lower loan payments may be a good move but everything has to be weighed carefully before making that move.
At this writing thousands of adjustable rate loans are about to adjust, increasing the loan payments significantly. Borrowers facing this reality should have all of the facts before they refinance.
The California Association of Realtors are vocally supporting SB 1178 to extend anti-deficiency protections to homeowners who have refinanced “purchase money” loans and are now facing foreclosure.
All of this is very confusing for most borrowers. Feel free to call and ask questions. If we do not have the answers we will point you in the direction of a reputable organization that can.
