Homescopes

As I was posting this week’s “Yountville weekly real estate update“, the fact there were 32 active listings is very significant. This is the highest number of listings I have ever seen in 25 years of selling real estate here and since the previous week, the first time this number was ever in the 30+ range. In the past, this number would be normally be around 20. But since this real estate slow-down started in earnest here about 10 months, this number has been constantly creeping higher and higher. Interesting what the number for the most listings will finally be. On a good note, it is now one less for we did have one sale pending this week so far.

If you read the first part of this post, “Napa Valley Real Estate, a Tale of Two Times Two Markets“, you can probably figure out where this continuation is heading. Yes, there are two distinct markets for Napa Valley real estate. Much as it is in other parts of Califonia and the country, lower priced, reasonable valued homes are getting multiple offers, some as many as 20. Now you may get turned off by the fact this is for homes priced under $400,000 here in the Napa Valley, but that is just the fact nof life living here. The upper end is a different creature, nothing is moving and the months of inventories on the market are soaring.

To prove the point, one only need to look at the graphs below from Treadgraphix. I choose the City of Napa and American Canyon for they represent about 95% of all distressed sales. For the upper end, I looked at Yountville, St. Helena and Calistoga. It was no surprise but the months of inventory have come down steadily from January to June 2009  for Napa (8.3 to 5.5) and American Canyon (6.2 to 1.5) and varied in the extremely high range for Yountville (13 to 20+), St. Helena (15 to 74), Calistoga (9.5 to 58+) for the same time period. For Napa County as a whole, months of  inventory has also decreased steadily from 9.5 to 6.1 mainly due to the huge percentage of all sales being in Napa and American Canyon. Remember, 5-6 months of supply is considered to be a balanced market between buyers and sellers and much less or more skews the market in favor of one or the other. And yes, being there are so few sales for the higher priced homes which is 90%+ of the market place in the up Valley areas, it may take a very long time to sale your home in this market especially if it is over-priced. In faact that could be 2-3 years if things don’t change.

Just look at the graphs below and you will see how they prove the above. The graphs are all the properties listed in my MLS, BAREIS (which represents approximately 95% of all sales here) which are For Sale, Pending (have an accepted offer) and Sold in each of these cities/town (Yountville is a Town) and for the Napa Valley. YES THERE ARE DEFINETLY TWO MARKETS HERE and they moral of this story, you better price your home correctly in this market.

So if you know me well, you know that I am a die-hard THIRD generation New York Yankees fan. (DISCLAIMER: Despite this fact, I have several clients, good friends and colleagues who are Boston Red Sox fans, but that is another story.)

How does Yogi Berra relate to the current real estate market in Sonoma County, Ca?

Well as current clients of mine will tell you-they thought they’d found a perfect house. We’ll call it “Park Place”. Great commute location, walking distance to shops and restaurants, and best of all a vastly over-sized, 13,000 square foot park-like back yard (complete with its own redwood tree and veggie garden).  Unfortunately for them, 18 other buyers also thought it was a great property and the winning offer was not ours, even thought we went well over asking, my clients were extremely qualified first time buyers. In this case it wasn’t enough. But they gave it their best shot at a price that made sense to them and lived with the results.

After a four week break to take care of family obligations, my clients were ready to write an offer on another pretty interesting property.   Meanwhile, I had told the listing agent for the first property to keep us posted if something happened to the original offer.

Also we  kept an eye on things.  We don’t want to rely on an overburdened REO listing agent. To make this easy for everyone, I set up a private web site for my clients updated in real time with changes to the MLS (Real Estate Multiple Listings Service). You may not realize it but most public facing websites are not reliably up to date, so a property could be back in escrow and not available again before you know it.

In this client website, we can keep homes in “Newly Matched”, “Saved”, and “Rejected” Tabs.  That way we are in sync and can both keep tabs on things so to speak. With my out of town clients, the “Comments” feature helps my get to know their preferences pretty quickly.
Back to the Yogi Berra situation: the same day we were writing on place number 2, I received a phone call from the listing agent on “Park Place” –the house of the 19 offers. Apparently the first buyer could not perform due to problems with their FHA financing.   The 3`cash buyers had gone elsewhere.  My clients were selected next by the bank who owned “Park Place” (bank as property owner-is an “REO” for real-estate owned).

Long story short, my clients are now in escrow to purchase “Park Place”.  Of course, it ain’t really over till escrow closes.  It is always wise for buyers of any property not to fall in love until they are moved in.  But this one, given up for good a month ago, looks pretty good now.

So thanks Yogi, for the real estate wisdom.   And I thought you were just a great catcher, hitter and 10 time World Series Champion!

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Sales jumped this past week in the south Santa Clara County towns of Morgan Hill, San Martin and Gilroy.  Last week there were 42 residences that went from active to pending status as compared to the previous week’s 37.  Of all the sales this past week, 39 were single family homes and 3 were townhouses/condominiums.  The highest priced listing sold last week was 13660 Sycamore Drive in Morgan Hill, a 2001 s.f. home on a 54,450 s.f. lot in a gorgeous rural area priced at $939,000.  This lovely home had been on and off the market for quite a while and had been originally priced at $1.348,000 in 2007.  The lowest priced listing sold last week was a bank-owned home in one of the newer downtown Gilroy condos at 7598 Monterey Street, #260, a 706 s.f. home priced at $99.900.  Sixty-nine percent of the sales this week were priced under $500,000 and 10% were above $800,000. 

Of these sales, the list price ranges were:

Less than $200,000 = 8 sales (19% of total)

$200,000 - $500,000 = 21 sales (50% of total)

$500,000 - $800,000 = 9 sales (21% of total)

$800,000 - $1,200,000 = 4 sales (10% of total)

As of July 26, 2009, there are 321 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 354 pending residential listings.  Therefore, 52% of the total listings are pending under contract as of this date.  However, many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

A whopping 30 residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  If homes continued to sell at this rate it would take 10.7 weeks to sell all south county listings.  Therefore, as of this past week, we have 2.7 months supply of inventory. 

Tune in next week for an update on the number of sales in South Santa Clara County!

The long days and sunny weather have taken me away from my computer–sorry it has been so long since my last post. I have a new iPhone (fun and without a doubt best new productivity tool in a long time–probably since my first Palm Pilot in 1996). I am available by phone or email or Twitter, Facebook, etc. if you have an immediate question, please feel free to contact me. And thanks to those of you who already have!

We are in the thick of a hot summer market here in Sonoma County. Buyers have been coming back into our market in increasing numbers since late last year. Now, nearly every property sold under $400,000 has multiple offers. First time buyers or conventional buyers with ten or twenty percent down should expect to have to write offers on multiple properties before they get “the one”. There a only 2-4 months inventory available at the current rate of sales at price points under a million dollars.

Kind of exciting and kind of nerve-wracking too. And you never know what will happen although we always are competitive! A month ago clients of mine wrote an offer on a house in Rohnert Park, priced at $256,000. We offered $302,000, 20% down, great credit and conventional financing. Did not get the property–we were one of 19 offers!

Four weeks later after they took some time off for family reasons, we were writing an offer on another property and I received a phone call from the listing agent on the original one. The first buyer could not perform due to financing. We were selected next by the bank (property owner-REO) and are now in escrow on a lovely home! So you never know. But right now, any decent home under $350,000 is selling within a week or so of coming on the market.

How are Multiple Offers Different this Summer than Last Winter?

We have had multiple offers on our market since last winter at the lower price points. The difference is that now, the sheer number of offers on each property is higher and the best properties are selling for 5 to 10% more than the asking price in many cases. The exception to this rule would be when an asset manager for a bank-owned property (REO) accepts a lower priced offer from an all cash buyer. In the case of the property mentioned above, the offers with loans came in over $300,000. The several cash offers on the property came in only $10 to 20,000 over asking.

Properties in the mid-price ranges up to a million are slower, but not as slow as they were last winter. For example, properties that are well-priced, show well and offer good value are selling quickly, and sometimes for multiple offers, but without the overbids, unless they are priced really low to attract a quick sale. The market seeks its own level, and dramatically under-priced properties seem to be selling at prices well above asking.

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STATS FOR LAST 7 DAYS

new listing 2, price reduced 4, sale pending 0, sold 0

new listing         1980 Adams St, $1,295,000, 5 br 4 ba, 3,200 SF

                               6550 Oak Leaf Ct, $1,860,000, 3 br 3 ba, 2,171 SF

price reduced  1947 Oak Cir, $550,000, 3 br 2 ba, 1,352 SF

                               1 Forrester Ln, $795,000, 3 br 2 ba, 1,204 SF

                               1 Grant Ln, $799,000, 3 br 2 ba, 1,754 SF

                               43 Lande Way, $995,000, 3 br 3 ba, 2,195 SF

new pending    

new sold

average prices, days on market                  

current listings for sale    32   avg price  $966,528; avg days on market 169

current sale pendings          0   avg price  $000,000; avg days on market 0

sold in last 6 months            8   avg price  $929,438; avg days on market 137

          Facts, numbers, SF from BAREIS and/or Napa County

                     tax records,  accuracy is not guaranteed

STATS FOR LAST 7 DAYS

new listing 1, price reduced 2, sale pending 0, sold 0

new listing         1125 Fulton Ln, $575,000, 1 br 1 ba, 752 SF

price reduced  1150 Vineland Ave, $689,000, 3 br 2 ba, 1,878 SF

                               285 Fawn Park Rd, $1,995,000, 6 br 6 ba, 2,048 SF

new pending

new sold

average prices, days on market                  

current listings for sale  110   avg price $2,929,177;  avg days on market 145

current sale pendings          5    avg price  $632,980; avg days on market 213

sold in last 6 months         24    avg price  $1,114,125; avg days on market 138

          Facts, numbers, SF from BAREIS and/or Napa County

                     tax records,  accuracy is not guaranteed

STATS FOR LAST 7 DAYS

new listing 3, price reduced 0, sale pending 1,  sold 1

new listing           1106 Berry St, $675,000, 3 br 2 ba, 1,100 SF

                                 909 Highland Ct, $1,500,000, 3 br 4 ba, 3,200 SF

                                 910 Highland Ct, $1,550,000, 4 br 4 ba, 3,393 SF

price reduced

new pending      1701 N Oak St, $495,000, 3 br 1 ba, 950 SF

new sold              275 Pickett Rd, $3,800,000, 3 br 5 ba, 6,006 SF

average prices, days on market                  

current listings for sale    61   avg price  $1,738,433; avg days on market 181

current sale pendings        7    avg price  $578,843; avg days on market 211

sold in last 6 months         16   avg price  $829,438; avg days on market 185

          Facts, numbers, SF from BAREIS and/or Napa County

                     tax records,  accuracy is not guaranteed

There has recently been a lot written about the relatively new appraisal regulation called the Home Valuation Code of Conduct (HVCC).   The gist of the HVCC is to ensure that the loan broker/Realtor doesn’t unduly influence the valuation of a property by pressing the appraiser for an artificially inflated value.  It does so by preventing those who are most likely to benefit from a home’s inflated value from selecting, retaining, or providing for payment of compensation to the appraiser.  Implemented on May 1, 2009, the HVCC has been a less than perfect solution.

Articles in the San Jose Mercury News and the Seattle Post Intelligencer have explained some of the problems of the HVCC.   Appraisals are becoming more expensive for the consumer while the appraiser is paid less because the Appraisal Management Companies (AMC’s) are taking a part of the appraisal fee to process the order.

In addition, some AMC appraisers aren’t necessarily knowledgeable about the subject property’s local market.  Just yesterday, an appraiser gave me her card which claimed that she specialized in Alameda, Monterey, San Benito, San Mateo, and Santa Clara counties.  Huh, what…that’s five counties and several thousand properties.  Wow, she must be a quick study with a photographic memory and reliable car!  As a consumer, what can one do?

The system should become more efficient as time goes by.  In the meantime, expect delays and budget for higher costs.  It might make sense to have a back up lender in place should the first one not be able to perform.   If possible, you might consider longer periods for financing contingencies and/or longer escrow periods.

KNOW the values (condition, size, purchase price) of comparable homes in the immediate neighborhood BEFORE you ratify a purchase offer.  Have your agent pull up the recently sold properties (within the last 3 months) as well as those that are currently under contract.  Try to get the purchase details of the homes under contract from the listing agent (some may discuss this, others won’t). 

The premise of the HVCC is excellent, but it will need some more tweaking if it hopes to eliminate the current problems it has created for the appraisal industry and ultimately the consumer. 

Note: the most recent update of the HVCC’s frequently asked questions FAQ’s (July 2009) can be found here.  

It is a short sale price tag, but without the short sale hassle. This well kept home is such a pleasure, you will feel right at home as soon as you walk through the door. Situated on a nice level corner lot close to the Glenshire School makes this home perfect for the ...

Sales increased by one this past week in the south Santa Clara County towns of Morgan Hill, San Martin and Gilroy.  Last week there were 37 residences that went from active to pending status as compared to last week’s 36.  Of all the sales this past week, 34 were single family homes and 3 were townhouses/condominiums.  The highest priced listing sold last week was 18241 Llagas Creek Drive in Morgan Hill, a 3441 s.f. home on a 20,037 s.f. lot and priced at $1,014,000, down from the original $1,139,000 price when listed 125 days prior.  The lowest priced listing sold last week was a bank-owned home in the senior community of Village Green, 7745 Isabella Way in Gilroy, a 818 s.f. home priced at $198,000 and 12 days on the market.  Sixty-two percent of the sales this week were priced under $500,000 and 11% were above $800,000. 

Of these sales, the list price ranges were:

Less than $200,000 = 1 sale (3% of total)

$200,000 - $500,000 = 22 sales (59% of total)

$500,000 - $800,000 = 10 sales (27% of total)

$800,000 - $1,200,000 = 4 sales (11% of total)

$1,200,000 - $2,000,000 = 1 sale (3% of total)

The number of active listings went down and pending sales rose.  As of July 12, 2009, there are 326 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 360 pending residential listings.  Therefore, 52% of the total listings are pending under contract as of this date.  However, many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

Sixteen residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  If homes continued to sell at this rate it would take 20 weeks to sell all south county listings.  Therefore, as of this past week, we have 5 months supply of inventory. 

Tune in next week for an update on the number of sales in South Santa Clara County!