A Tale of Two Home Sale Markets

A Tale of Two Markets

With the Federal Reserve signaling an impending scale back of its quantitative easing program,interest rates soared in recent months. The average 30 year fixed rate jumped more than 100 basis points from 3.35 percent in early May to 4.46 percent in late June, and reached its highest level since July 2011. The increase in mortgage rates had an impact on the housing market as home sales in California pulled back slightly in June.Sales dropped on a month-to-month basis for the first time in the last four months, and were down 3.7percent when compared to June 2012.Despite the decline in overall sales, higher-end markets continued to show strong growth on a year-over-year basis. Sales above $500,000 increased 33.6 percent when compared to June 2012, and sales of million dollar plus homes jumped 31.7 percent from last year. This was evident in coastal markets such as San Francisco County,Marin County, and Santa Cruz as all of them experienced double-digit sales increase in June.Lower price segments of the housing market,however, continued to decline with sales under $200,000 dropping 43.6 percent from last June and sales between $200,000 – 300,000 decreasing25.7 percent year-over-year.

The vast difference in sales trends between the lower and the upper price ranges was due in part to the constraint in the housing supply. Overall housing supply in June improved slightly from the previous month but remained tight by historical standards. Inventory levels, however, vary across the board with a significant shortage in lower-price segments but are less constrained in higher-priced markets. The supply of homes priced under $300,000, for example, dropped 47.1 percent from last June, while inventory for million dollar plus properties increased 7.5 percent when compared to last year.The steep decline in inventory for the lower price segment is partly attributed to the lack of supply in distressed properties, as REO and short sales tend to concentrate in the lower-priced markets. The supply shortage in distressed properties is due primarily to government intervention in recent years, which slowed the flow of foreclosed properties to the market place. Bank-owned/REO inventory, in fact, has been declining by an average of over 50 percent year-over year for the past twelve months. The recent surge in home prices has also turned some of the previously underwater properties into homes with positive equity, and led to fewer short sale listings on the market. Equity sales, on the other hand, improved 7.8 percent in June from last year as home prices continued to climb and more homeowners started putting their house on the market.

Tips For Searching the Fresno MLS

Thank you for using www.FresnoHomes.net as your direct public portal to the Fresno MLS system. This blog post is to help you in your search, so that your home search results will be only the “Active” listings in the Fresno MLS system. The most important thing is the “status” of a property listing, after all, you can’t buy a property that is not available. You need to be conscious of the “prop status” field in the details and results pages, and understand that “Backup” status, is not a listing that is available for sale at this time. You want to find listings that are “Active” status. The purpose of “backup” status is to inform you, that an offer has been accepted and is working through the time frames of contingencies and inspections, or it could be a short sale waiting for the existing lender’s approval of a short payoff, and the remote possibility of a backup offer being taken by the listing agent. If you are serious about buying a home, my advice is to ignore “Backup” status listings and find the “Active” status listings. When you run a search, in the results page, take notice of the status, which is near the top of each listing in the results. Try using the “Advanced Search” function. On the “Advanced Search” page, find the status choices, and select or highlight the “Active” field. The default for searches is both “Active” and “Backup”, so to select “Active” and it will filter out the “Backup” status listings from the results.

Flipper Helping Bring Back Home Values

No not the dolphin! Flipper the investor, the person who buys  run down foreclosures, fixes them up and resells or “flips” them back on the market for resale and profit. Thanks to the flippers, we are seeing some clean fixed up homes that will pass appraisal inspection for financing, and they are helping to bring back higher sale values. This is a good thing, after the beating everyone took during the mid 2000’s boom market. One thing to be aware of, is that these investors have never lived in the property, therefore they can not give any good disclosures of known defects. Buying a flip home, even though they look like a model home, should always get a full home inspection from a professional home inspector. One unfortunate thing about the current market is the fact we have low inventory. This is causing prices to inflate due to multiple bidding. The downside is, many times this creates an appraisal problem. I see more and more buyers willing to pay above market value, or above what the property will appraise for. When this happens, the sale may fall thru, or the seller will have to lower sales price to appraised value. Sometimes, buyers will pay above appraised value, but not often.

FresnoHomes.net Gets Major Update and Re-Design

I’m proud to say we have just launched a total redesign of my website, thanks to my good webmaster Corey Davis of Web View Consulting http://www.webviewseo.com/. As you will see, the new design is simple, yet very functional, for searching the Fresno MLS database of homes for sale. The site has been optimized for mobile devices now, so you can use your internet enabled cellphone for easy search and navigation on the go. We are using the same IDX data provider, IDX Broker, because I feel they have the best overall product for providing the search functions for the Fresno MLS data feed to my site. I hope the users will find the site attractive and functional. Since the site has just launched less than 24 hours ago on June 6th, we may find some bugs. If you are using the site and find something not working, please email me, tavent@comcast.net and we will try to correct any issues. Give me your feedback, I would enjoy hearing from you.

Low Pricing Generates A Frenzy of Highest and Best Offers

In today’s market it should be known, that many sellers, especially the resellers, or “flippers” that buy foreclosed homes, fix them up and resale for a profit, and also listing agents for bank owned REO properties have an interesting marketing technique whereas they list the property for a price under market value purposely, collect several offers from the buyers who are attracted by the price, then the sellers send out a multiple offer notice to buyers and asking them to make their “highest and best” offer. It is a fair practice, but it creates an artificial buying hysteria that takes. I tracked one well known reseller over the past year, and they had sold 300 properties in 2011, and the average sale price was $4000. higher than the average asking price. Very few of them sold for less than asking price and most of them sold for more than asking price, but the average was about $4000. higher.

So the lesson to learn here is that asking prices for most REO and “flipped” properties is just a starting point, and that buyers need to carefully study the comparable sales in the neighborhood to help in making the decision to bid higher than the asking price.

Fresno Homes for sale – Low Listing Inventory for Fresno Making it Tough For Buyers!

As of today, August 13, 2012, there are only 885 “active” listings in the Fresno MLS, for homes, condos and PUD’s in the Fresno/Clovis areas. Of the 885 listings, 161 are short sales. So the actual homes that can be sold today is a mere 724 available listing. As you know, short sales take months to get approval and sometimes don’t go through at all, so I don’t count them as truly available properties. Also, of the 885 active listings, there are 110 “bank owned” REO listings.

This is an incredibly low amount of listing inventory! No wonder that buyers are having a hard time finding a good Fresno Homes to buy. I’m seeing multiple offers on nearly all listings that are clean and priced correctly. We actually need more like 2500 to 3000 listings to be a more balanced market with the number of buyers in the population of the Fresno, and Clovis communities.

This is having a positive effect on prices, as it is showing in the prices and values edging upward over the last year. The problem is we need listings. Anyone who is considering selling, must know that they can sell quickly at this time, and if they can find a suitable replacement property, they can reap the benefits of record low interest rates, such as 3.5% for a 30 year loan. It’s just incredible the low rates we can get! .  Many homeowners that I talk to, would like to sell, but their property values have taken such a hit, that they are waiting for the values to increase. They are increasing but it’s at a slow pace, maybe just a few percent higher than last year. I believe we have seen the bottom of the price decline, and values are slowly on the rise again.

Active Fresno Homes Inventory Getting Tighter in Fresno

With the start of 2013, I was hoping more sellers would be coming forward to list their homes. After all, prices are moving upwards. Most people don’t realize, we have seen prices in Fresno county increase by about 8% from a year ago. The problem we have right now is low active inventory. I ran my “market barometer” search today, and found that their are only 798 active listings of single family homes, condo’s and PUD’s in the Fresno/Clovis area. Now of those 798, there are 112 “short sales” and 107 “Bank Owned” listings. That leaves a mere 579 “traditional” home sellers in the local Fresno marketplace.
This has put the inventory at less than a 1 1/2 months supply of homes. I’ve witnessed a steady decline in active inventory over the last 3 years. With approx 600 fresno homes being sold per month, and slightly less than that being new listings, we have a declining active inventory.

The good news is that there is less foreclosure filings, and more traditional sellers coming forward to sell their homes. Everyone likes a traditional seller, because they are much easier to work with. The traditional seller will answer your offer in a few days, as opposed to the longer period experienced when working with banks and short sale lenders.
If you are thinking about selling, now is the time to get a good price and sell quickly. Clean, well priced homes are getting multiple offers in a short period of time, usually a few days or weeks, but not months.