Sacramento Investor Blog

Prices up, sales down in Sacramento

sacramentoinvestor — Fri, 26 Jun 2009 21:06:41 +0000

In May, Sacramento prices rose 9.4% from April but were still down 22% from a year ago, primarily because of fewer foreclosure sales and more higher priced retail home sales. The big question is whether foreclosures sales will continue to decrease, or have we just hit a lull in the storm. There’s still lots of foreclosure inventory out there, and everyone’s been predicting that it will hit the market “soon” for quite a while. But it still remains “out there”.

This compares with the California market which saw the median price rise 4.2% in May over April, and foreclosure sales up 31.9% in May after a 35% rise in April. Most of the foreclosure sales are being postponed by lenders, either because of the moratorium(s), or to give the lender more time to work out solutions with homeowners (and avoid taking the loss on their books).

And nationally, sales picked up in May by 2.4%. However, this was not as much as expected because many “pending” contracts fell through. Realtors and home builders are blaming this on the new appraisal rules, which are causing quite a controversy. Using REO sales and short sales as “comps” for retail sales is reportedly lowering the appraisal price and kills the deal. National Association of Realtors (NAR) and National Association of Home Builders (NAHB) are asking for postponement or modification of the new appraisal rules. Whether this has enough pressure to overcome the considerable political push on this remains to be seen. In the meantime, you may want to be conservative on prices.

Meantime, the Fed is saying it sees a “gradual resumption of sustainable” growth, and expects that “inflation will remain subdued for some time.” The Fed is trying to reassure the markets that inflation is under control as interest rates are rising. Now is it possible that the trillions of dollars being spent for bailouts, and trillion(s) in budget deficits, could possible contribute to inflation?? Could happen. Stay tuned, and stay away from variable rate loans (unless you’re on the lending side).

“The real bind for the FOMC is the amount of Treasury debt coming at the markets,” said Lee Hoskins, former head of the Cleveland Fed bank. Expanding Fed purchases may fan investor concerns about inflation, or rates may rise, anyway, because of an increased supply of government debt, Hoskins said. “Congress needs to address the deficit issue if it wants to improve prospects for the economy.”
Bloomberg News

California leads the nation (in lost jobs)

sacramentoinvestor — Sat, 23 May 2009 23:10:22 +0000

California led the nation in jobs lost last month with nearly 64,000 jobs. This is the fifth month in a row that CA has had this dubious honor, and the state has a jobless rate of 11%. Overall, 44 states lost jobs in April.
Yahoo News

Good News! California home sales up!

sacramentoinvestor — Sat, 23 May 2009 22:30:59 +0000

California home sales went up to 37,967 in April, up 4.8% from the previous month, and up 21.9% from a year ago. Median prices were down 0.9% from the previous month, to $221,000, which was 37.6 below a year ago. So although the median is way down from a year ago, the price decline seems to have slowed.
link

Where’s the inventory?

sacramentoinvestor — Tue, 19 May 2009 23:44:10 +0000

Lately I’ve been looking for a property to rehab, and it’s becoming more and more of a jungle out there. Very few properties on the market, unlike 3-6 months ago, and lots of offers on the ones that are there. This of course pushes the prices up. It’s a great time to buy if you’re a new homebuyer looking to get into your first home, but not much available for investors. By the way, if you are looking to get into your own home, FHA has announced that the $8,000 tax credit can be used for the downpayment (see http://realtytimes.com/rtpages/20090518_washingtonreport.htm).

The inventory is down so much that pending sales were more than half the houses on the market (see http://www.bizjournals.com/sacramento/stories/2009/05/11/daily32.html ) There were 4,067 homes on the market in April, and the pending sales were 2,341. This total is less than half the total from a year ago.

Sacramento showing signs of a near bottom!?

sacramentoinvestor — Sat, 16 May 2009 22:39:39 +0000

Sacramento rose quickly in 2005, and fell even quicker, but we could be near the end of the fall. Prices have started stabilizing and are no longer in free fall. There is now only a 3 month supply of houses on the market. On the other hand, there are predictions of another wave of foreclosures coming, which will lead to more inventory soon. People on both sides of the argument are presenting good cases, which is better than 6 months ago when there was no case to be made for the end of the downturn. We could be nearing the end of the bottom for prices, but it will probably be quite a while before prices rise back up. See http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html

Welcome to Sacramento Investor

sacramentoinvestor — Thu, 14 May 2009 04:08:07 +0000

Welcome to the Sacramento Investor blog. We’re all about Real Estate investing in the greater Sacramento, California area. We’ll have Real Estate news you can use with emphasis on the Sacramento market.