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Archive for the 'Bank Owned Homes' Category

Sacramento’s REO ” Shadow Inventory “

I have been missing in action from my blog for some time now. For the last 6 months I have been working more than full time and an active auction investor. It is a great time to be an investor and I have been enjoying the challenge.  Let me assure you that it is a challenge, every day.  I’m telling you this because I happen to know the secret behind the ” Shadow Inventory “…………………………………………………………………………………

Were you waiting for the secret ? Almost all Sacramento Buyers Agents and the Buyers that have been beat up and abused by this market, talk about the “Shadow Inventory”. This is the inventory believed to be waiting on the banks books to be released to market. It is commonly believed that thousands of distressed properties are out there. Buyers everywhere are sharpening their knives and preparing for the REO feast, and the poor banks that will have no other option than to sell them for pennies.

Sorry to keep you waiting. I have terrible news for you, there is no shadow inventory. That’s right no shadow inventory. Right now the banks are holding about 4 months worth of inventory here in California. It takes them on average 7.5 months to process an REO property. That means that the REO inventory will be fully disposed of by next spring.

Why ? The flood of REO’s has been plugged up and partially salvaged buy the various government programs and the Loan Modification programs. I wont get into those topics in this article but they have significantly slowed down the number of foreclosed properties. At this point I expect that we will see the number of REO properties made available to be less than consumer demand here in Sacramento.

The Sacramento home buyer currently serious about finding a home will need to be aggressive once they locate the right property. All of my listings are receiving multiple offers and typically the best offers are well above the asking price. The way the offer is structured is more important than ever. Your choice in lenders could be your most critical decision. I highly recommend finding an Agent that is up to speed with the current market and has a team of professionals that can make the deal happen.  If you would like to talk to me about successfully buying or selling in the current market feel free to give me a call at (916)332-1292.   Thanks, Nate

A Second Wave of Foreclosures for Sacramento

Over the last year we have seen a turbulent housing market and economy. The Sacramento marketplace has been slightly insulated due to the fact that the Capital city has such a large number of State and Federal workers with stable streams of income. As you recall I wrote about the state stepping in back in October and putting a 90 Day a moratorium on foreclosures. Shortly after that we had our general election of our new President Barack Obama. He has been putting his pen down on countless bailouts and economic stimulus plans and as a result the banking market has been in a holding pattern. Until Now!

Tracking the statistics (Yes, I am a closet Engineer) I am startled by the number of Notice of Default and Notices of Trustee Sale. It is climbing and fast. I am looking at the data as a sign that the Sacramento REO market will remain soft through the summer. The number of NOD’s is at 2,426 and the number of NTS’s is at 1,105. There is one statistic that leads me to believe that we will start seeing less REO properties moving forward. The ratio of NOD to NTS is down 46% today Vs 71% a year ago, that matches the fact that banks are working with some homeowners to keep them in their homes. If you are an investor or first time homebuyer that is on the fence id suggests that you look hard at buying. Each Sacramento region is different but overall prices have just taken another bump down, and interest rates are great. Combined these favorable terms with an $8,000 Tax rebate and you have a tremendous opportunity.

But Nate It is sure to go lower?

We simply do not know where this market will rebound or decline. I just put a property into contract this week in Bohemian Village for $75.00 Per SQ. FT.  ! ! ! Call any Contractor and ask what it costs to build an average home. I think you will be surprised that the cost to build exceeds the cost of most REO properties.

If you would like to discuss the Sacramento foreclosure market and how it affects your real estate decisions feel free to give me a call at (916)332-1292.

 

Is your Agent prepared for this market ?

The best compliment any Realtor can get is your referral. I cannot tell you how happy I am when I hear that my clients were so pleased with my service that they kindly referred their friends. They all know that I treat my clients like family and follow through. It is the hard work behind the scenes that reveals itself as success in today’s market that few agents from the glory days of 2005 and 2006 care to learn.

Here is the thing folks. It is December 2008 in Sacramento. What does that mean to you ? Far more than you realize if you are looking at buying or selling real estate. Many agents have thrown there arms in the air and given up. That’s right rather than picking up the pace learning more about the market and transitioning with it, they gave up. They will still show you houses, they will gladly write offers, and sometimes they will land one in escrow. However in my opinion they are doing a serious disservice to their customers.

Today’s market requires a solid knowledge of REO properties and what it takes to make a successful offer on one of these bargain basement deals. Hot REO properties sell, and they sell fast. Only to the properly presented offer has a chance.

Are you wondering why you have made four or five offers and heard nothing back from you agent? Their was something wrong with your offer, something that the astute REO buyers agent knows. That REO buyers agent had a successful deal on those properties while you are left wondering. Let me assure you that if you are waiting to hear back from the listing agent you need to move on and try again. But Why ????

Two years ago te market was very different. That good agent two years ago, might not be so good today. The market has changed and so have the great Realtors. It is a dynamic Sacramento real estate market, the pace is fast and change is rampant. The best agents are on top of their game and helping clients to succeed in purchasing homes today. If you would like to know how you can achieve a successful transaction in today’s market i would be glad to answer you questions. Please direct them to natesisam@gmail.com

Blue Light Special on Sacramento Bank Owned Homes

October Stats for Bank owned (REO) home sales.

Carmichael, 50 Homes sold 22 REO. 44% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (22)	$280,495	1765	$160	20/27	$278,348	$159

Fair Oaks, 28 Homes sold 15 REO. 54% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (15)	$296,314	1898	$164	64/86	$295,255	$164

Orangevale,  30 Homes sold 20 REO. 67% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (20)	$265,535	1672	$161	19/48	$271,346	$165

Folsom, 61 Homes sold 18 REO. 30% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (18)	$399,704	2267	$188	19/24	$397,465	$187

Citrus Heights 95621, 50 Homes sold 36 REO. 72% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (36)	$172,171	1420	$123	23/23	$179,639	$128

Citrus Heights 95610, 50 Homes sold 31 REO. 62% REO Sales

	Listing $	SqFt	Listing Pr/SqFt	DOM/CDOM	Sale $	Selling Pr/SqFt
Residential (31)	$217,210	1569	$141	21/50	$220,048	$144

What do these numbers mean? Actually they are quite revealing. We know that currently the number of Notice of defaults is down. I believe that it is a synthetic situation though; two factors have made the foreclosure situation in California more difficult to predict. One the banks are trying to hold off on taking in more properties until the 2009 calendar year for tax reasons. Second the number of banks that have merged in this financial meltdown has made the process that they were getting pretty good at overwhelmed again. A third factor slowing the banks is the new foreclosure and loan modification bill signed by Governor Schwarzenegger.

Our Sacramento real estate market has been trending down all of 2008 due to the REO properties and the overall economy. The market will not fully recuperate until the number of REO’s in the market is fewer than 5 %. For now it will be stable, LOW but stable. It is anyone’s guess how the new government “Help “will affect the market. If you are interested in buying a bank owned property a liquidation prices as an investment or as a first time homebuyer I would be happy to help you make sense of this constantly changing market. Contact me at natesisam@gmail.com.