Homescopes

With 2009 moving into the rear view mirror, there has been much speculation among agents, clients and the press about 2010 and what portends in the housing market. Inman News recently published a sobering assessment of the events that will impact real estate markets in 2010, from increasing mortgage rates, tightening FHA credit standards, high unemployment and the expiration April 30th of the buyer tax credits.

Real estate agents and brokers typically look forward to spring as the season where homebuyers come out in force and sales pick up.

In 2010, the uncertainty created by the financial crisis makes it harder to bank on a seasonal uptick in sales — particularly in markets hit hard by unemployment.

Further complicating matters down the road are three potentially destabilizing events that are expected to occur in a tight timeframe during the spring buying season:

* At the end of March, the Federal Reserve is expected to wind up a $1.25 trillion program that’s kept mortgage rates low.
* The Federal Housing Administration’s announcement that it plans to tighten underwriting standards could take effect as soon as April.
* Congress is expected to allow the newly expanded homebuyer tax credit to expire, closing the door on buyers not under contract by April 30 and closing by June 30.

Economists must rely on a certain amount of guesswork in predicting what impact these changes will have when drawing up their forecasts for 2010. Many expect unemployment won’t peak until next year, and it’s almost certain mortgage rates can only go up from record lows.

But housing was hammered so badly, and for so long, that most forecasters expect housing prices to stabilize and sales to pick up in 2010, even if economic growth doesn’t spring back as fiercely as it usually does in a recovery.

“We are definitely in a recovery now, but this has been such a severe recession — we think the financial crisis and the credit retrenchment that’s occurred means this is going to be a fairly anemic recovery,” said Michael Fratantoni, the Mortgage Bankers Association’s vice president of research.

America has moved from a manufacturing to service-based economy, meaning “there’s not as much potential for a snapback” from a recession like the Reagan-era boom of the 1980s, Fratantoni said.

These events certainly will impact markets nationwide, but each area will respond differently. Many of us think that buyers will continue to feel urgency in Sonoma County to avoid rising rates and the expiring tax credit. Certainly, inventory is in very short supply and buyer activity has been surprisingly strong during the holiday period.

Plus, Sonoma County will continue to be perceived as a more affordable alternative to housing in Marin County and the rest of the Bay Area to the south. No one knows for sure how the shadow inventory of foreclosed homes will affect our markets. How many of them will reach the market, and at what rate?

What do you think 2010 will bring?

And most of all, Happy New Year! Thank you for your business, referrals and friendship in 2009. I look forward to working with you in 2010. No matter what condition the market, there are opportunities in real estate if you have patience, think long term and have good planning on your side! If you have any questions about buying or selling a home, please contact me and I will be glad to help you!

This has been an good year for these two Pacifica neighborhoods.  This chart shows two things 1) Average and Median sales prices on the left axis.  I wanted to show you both so you can see that they’re pretty consistent.  Note there are 2 lines for these unless they overlap.  This means there probably weren’t any properties that sold out of range (an outlier) for the area, which is one possible reason for differing numbers.  2)  Inventory (the number of properties for sale) on the right axis.  Note how different the numbers were a year ago compared to now.  Those of us working in the Park Pacifica and Sun Valley neighborhoods have been aware of this for months.  Below the graph are some key points.

This is a different market from a year ago.  I wrote about these neighborhoods in April 2009, titled Pacifica Buyers Find Value.    “Except for 2 sales in February 2009, there have been no closed sales since September 2008.”

The dip in January 2009 means that there were no closed sales that month.

Inventory peaked in late Winter and again in late Summer, a little earlier than more typical Spring and Fall inventory bumps.  In Nov 2008 there were 13 single family homes for sale and 1 sale (13 months of inventory); last month there were 4 homes for sale and 2 sales (2 months of inventory.  In the last 3 months, the absorption rate has been between 2-3 months!

The Median Sale Price broke the $600K mark in the Spring of 2009 and has sustained.  The Median  Sales Price in Nov 08 was $475,000; Median Sales Price in Nov 09 was $663,000.  Who knows if this approximately 28% increase will last in 2010 but it’s a welcome upturn for sellers who have seen a downturn since the peak in Quarter 1 of 2005 when the average sale price in these neighborhoods was $1,033,838.  At that time the Median sale price was $812,500, which is probably the more accurate range if we look at the trends.

Average Days on Market at the peak was 34; average days on market over 6 months is 58; average days on market over the last 3 months is 35.  This is with only one bank-owned (REO) property in the mix (1166 Fassler, originally listed for $513K, reduced to $498K 30 days later, accepted offer 10 days later, closed on 12/20/09 for $523K.)  I mention this because distressed properties can wreak havoc with days on market averages, but not for this market right now.

Potential sellers in Park Pacifica and Sun Valley - get a Comparative Market Analysis if you’re thinking about selling but wanted to wait for the market to stabilize.  There have been enough sales to satisfy appraisal concerns and price intelligently.

Potential buyers considering Park Pacifica and/or Sun Valley - have your financing in place BEFORE you make your offer.  Listing Agents may contact your mortgage broker or lender if there will be some financing.   Also, there are still cash buyers in the market.  Work with a Realtor who can guide you through a strategy that will insure you end up with the right house for you.

Search Pacifica properties or get listing alerts.

Search Pacifica properties in the $400K-$700K range or get listing alerts.

Related Article:Comparing Sun Valley and Park Pacifica - 3/31/2009

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Many of my friends and clients are entrepreneurs and small business owners in the community. From time to time in 2010 I plan to showcase them so that you can learn about some unique and vital services to Sonoma County and beyond.

Christian Wright and Gerald Simpkins were friends and fellow Vizsla owners long before they became clients in 2003 when we found them an astonishing 1915 farmhouse on acreage in Sebastopol, since lovingly restored. We sold their charming cabin in Guerneville near the Russian River so that they and their dogs would have more room to roam, and also to be closer to their full-time home in San Francisco, where they ran a successful interior design business, Wright-Simpkins, Inc., serving clients all over the United States.

Gerald and Christian have progressed along a path somewhat typical of second home owners in Sonoma County. At first they left San Francisco on Friday evenings and returned home Sunday afternoon. Eventually Friday reverted to Thursday and Sunday became Monday, stretching the weekend to nearly four days. Holidays meant two week stays whenever possible and they became increasingly involved in the community of Sebastopol and Sonoma County. The house had already had some extensive restoration by the previous owners and Gerald and Christian took it and the grounds to the next levels, so much so that the house and gardens have twice been featured on the West County Garden tour sponsored every year by Food for Thought in Forestville.

In 2008, Gerald and Christian decided to move to Sonoma County full time, and sold their home in San Francisco. The recently opened a small studio and shop in Sebastopol at 2833 Old Gravenstein Highway on the way to downtown Sebastopol. If you care to stop by and visit, you might call first, to 707 829-9177 to make sure they are in.

Oh, and in their spare time in 2009, they neared completion of a project in Kohala on the Big Island of Hawaii. If you, like I, are thinking of tropical weather these winter days, take a look!

STATS FOR LAST 7 DAYS

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

 new listing        

price reduced

new pending      1531 Kennedy Ct, $395,000, 4 br 2 ba, 1,196 sf

new sold              1641 Voorhees Cir, $302,677, 2 br 1 ba, 1,270 sf

                               762 Sunnyside Rd, $590,000, 3 br 2 ba, 2,066 sf

median prices, average days on market

current for sale             79 med price $1,400,000; avg days on market 184

current sale pendings   6 med price  $717,000; avg days on market 119

sold in last 6 months   32 med price  $827,500; avg days on market 137

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

new listing

price reduced  3991 Peterson Dr, $1,028,000, 2 br 3 ba, n/a sf

new pending    

new sold            1505 Cedar St, $335,000, 2 br 1 ba, 1,242 sf

median prices, average days on market

current for sale             51 med price $1,395,000; avg days on market 250

current sale pendings   5 med price $379,000; avg days on market 159

sold in last 6 months   17 med price $376,000; avg days on market 135

Downtown Forestville in Sonoma County is hopping as last minute shoppers crowd tiny Nightingale Bakery, one of many artisan purveyors of local foods. In addition to wonderful baguette, foccaccia and sourdough, you can find local goat cheeses, butter and locally produced salumi. I have never seen this new litlle shop so busy!

Happy Holidays!

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I have been showing property here in the Napa Valley several  times over the last two weeks and have noticed a distinct slowing of sales in price ranges above $300,000 . Below $250,000 and perceived to be a good deal properties are still selling fairly quickly, but they really need to be a deal. An example is a property I was considering making an offer on for myself: built in the late 1940’s, a 2 bedroom, 1 bath, 770 square foot fixer for $125,000 which need approximately $25,000 in repairs based on a verbal bid from a contractor I regularly use. I decided not to proceed when I found out there were 25 offers. It sold for $155,000, not a bad buy even at this price .

Yet, I just showed a 3 bedroom, 2 bath, 1,506 square foot newer home which once sold for $695,000 in October 2005 which is currently on the market for $382,000 and has been so at this price with no offers since December 9th . Just a few months ago, this home would have had multiple offers on it and was in escrow for $449,000 in August. There were several other properties I showed my clients which would have had the same multiple offer results just a short while ago.

Here is the link for what I currently consider the best buy in the City of Napa, 40 Firefly Lane. 

40 Firefly Lane, Napa, CA

Many many home buyers in Sonoma County live out of the area–they buy second homes here, they are relocating for work, or want to experience life in the wine country first hand.

Many home buyers, even if they are local, conduct much or their search on line. Why not have as much of the purchase transaction paperwork be conducted on line too?

This struck home this afternoon as I prepared an offer for out of town clients to sign. Their scanner was older and it was not easy to assemble the pages to fax back to me–believe me I had the same problem before I got a new scanner. What a tedious process for them!

Or I have had illegible faxes come through as a result of too many generations of faxing and scanning of counter offers and counters to counters, ad infinitum. Every one involved tears their hair out and runs around wasting time on mechanics of the paperwork, when it is the content of the documents that is most important! Pretty silly.

Enter the paperless transaction, beginning with the electronic signing of contract documents. It is easier than it might sound! What is an electronic signature?

An electronic signature is any legally recognised electronic means that indicates that a person adopts the contents of an electronic message.

There is a better way. Our new paperless transaction system at Prudential California Realty will be rolled out company wide in the first quarter. Hallelujah!!!!!! So many trees will be saved and countless hours chasing paperwork with also be saved by realtors and their clients.

My client asked me about electronic signing–what does it mean? What does it look like? What are the basic facts? You can click on the link above for a Wikipedia article about the concept of electronic signatures.

For more specifics, here is a link to the system we will be using, Docusign by Ziplogix.

Here is a brief (2 minute) and not too fancy overview of how you, as a buyer or seller, would use Docusign to sign documents electronically. I’ll have more posts about the whole process of greening the real estate transactions and preventing grey hairs for all the parties involved!

STATS FOR LAST 7 DAYS

new listing 2, price reduced 1, sale pending 1, sold 3

new listing            6922 Yount St, $649,490, 2 br 2 ba, 1,646 sf

                                  1978 Adams St, $1,063,000, 4 br 3 ba, 2,715 sf

price reduced     1953 Yountville Croos Rd, $585,000, 2 br 2 ba, 1,403 sf 

new pending        224 Vista Ct, $649,000, 3 br 2 ba, 1,224 sf

new sold                1922 Oak Cir, $595,000, 3 br 2 ba, 1,765 sf

                                  1 Forrester Ln, $729,000, 3 br 2 ba, 1,204 sf

                                  6680 Washington St, $1,095,000, 2 br 2 ba, 1,679 sf

median prices, average days on market

current listings for sale    18   med price $887,500;  avg days on market 140

current sale pendings         1   med price $649,000; avg days on market 82

sold in last 6 months         14  med price $675,250; avg days on market 167

STATS FOR LAST 7 DAYS

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

 new listing

price reduced

new pending     653 McCorkle Ave, $1,028,000, 3 br 3 ba, 2,110 sf

new sold             970 Crane Ave, $575,000, 3 br 2 ba, 1,690 sf

                               1337 Pine St, $805,000, 2 br 1 ba, 972 sf

median prices, average days on market

current listings for sale   86  med price $1,397,500; avg days on market 177

current sale pendings        7   med price  $599,900; avg days on market 150

sold in last 6 months        32  med price  $862,500; avg days on market 140