U.S. Home Sales Rose Sharply in February
Last month I posted the startlingly high "PENDING SALES" figure for the short, rainy month of February, in which the highest number of pending sales was recorded for the last two years. Today the national press reported that nationwide, pending sales rose sharply throughout the US. The interpretation is that the soon to expire Federal Tax Credit of $8,000 for first-time and $6,500 for existing home owner tax credits were promoting the increased buyer activity. Interestingly, the article reported that strong sales in the Midwest lead the charge, and that sales have declined in the Western States. As yet further proof that all real estate news is local, the numbers of pending Sonoma County home sales bucked the Western states trend. (Wait till you see the March numbers, coming soon!) ...
Months Supply of Sonoma County Entry Level Real Estate Declines Sharply
One of the most interesting measures of the tension between buyers and sellers in a real estate market is the "Months Supply of Inventory" figure. What this number tells us is the number of months it would take to sell the existing number of homes for sale at the present rate of closed sales. Buyers Market or Sellers Market? Generally six months of inventory is considered to be a market balanced between buyers and sellers. Anything less, and sellers are advantaged in negotiations. Anything more, and the trend favors buyers. Two years ago in Sonoma county, there were 6.2 months of entry level inventory for sale. When the first wave of foreclosed properties began hitting our market in force in 2007, the inventory piled up to a high point that so few properties were selling, as many more were coming on the market. Consequently, MSI (Months Supply of Inventory) ballooned to a 14.8 months supply, a strongly favored buyers market. Early in 2008, banks began slashing prices and buyers have been increasingly active ever since. (See my posts under market updates beginning in March to track this trend.) The lower priced properties, driven by foreclosures, have steadily been absorbed by first time buyers and investors. They have been gobbling up REO's so quickly that now there are only 2.7 months of inventory available at the current rate of new listings and sales, a strongly favored sellers market. If you are a buyer interested in purchasing an REO home, it is important for buyers to be prepared for the market realities especially for the most solid homes in the best locations. 1. You must have a STRONG pre-approval. In many cases first time buyers will be competing with all cash investors for the same properties. 2. You may need to make multiple offers on a stream of properties before you land the right one. 3. It ALL DEPENDS. Make sure you have a committed working relationship with a realtor who is knowledgeable about the changing market, and who knows how to present and negotiate your offer(s) in the best light. Just as sellers have learned (in some cases!) to be realistic, it is important for buyers to do the same. Happy hunting! ...
Tour Talk: New Country property listings in Sebastopol
It was a glorious sunny day for touring West Sonoma County and seeing the latest properties to come on the market for the Sebastopol MLS. I am continually amazed at the breathtaking beauty of our back roads and the incredible variety of terrain, vegetation, trees, views and micro-climates that make up Sebastopol and Graton. So many nooks and crannies offering everything from 1910 farmhouses to contemporary estates and Tuscan style villas, vineyards, horse properties, garden paradises (where was the experimental farm of Luther Burbank?), apple orchards, organic farms, dairies --both cow and goat--and idyllic country retreats. Not to mention redwood groves and ocean views. And this was just today's tour! ;) Today we started with a delightful end of lane listing at 8349 Lewanna, off of Elphick. For $699,000 you can have a 1232 sf home on just under an acre. A modest home which could use updating but the views are spectacular:a panorama of the SE Santa Rosa hills and the home looks directly over a sprawling vineyard. Properties don't come up often on this lane and the setting is truly unique. With a property like this you have the benefit of what I call "borrowed acreage" --you can look at it and pretend it's yours but you don't have to take care of it or pay for it. Small parcels bordered by little ones can be delightful in this way. Next we drove way out Burnside Road to view Cary Fargo's latest cool listing at 4910 Burnside Road. This is the quintessential old farmhouse with fir floors and a tilting chimney, spring and tiny studio and pond. Lots of chamomile and herbs tumbling around and we spotted a doe and fawn leaping away. The spring has a hand dug 10 foot deep well and tiny well house covering it. Not much as been done to this house except for some blue tiles that appear to date from the 70's in the kitchen and a massive open beamed ceiling in that room. Lots of wainscoting and original character and KILLER views of Mt. St. Helena. The 3 plus acres appear to be very usable and Cary said there are some potential building sites on the property so that perhaps the cute farmhouse could become a granny unit and leave room for a larger main home. Check...