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Home Prices Jump

by The Barringer Team

The Stockton Record reported last Thrusday that San Joaquin Counties home prices seem to be moving up.  This is great news for us!  Take a look at the article.

The San Joaquin County real estate market appears to be on the rebound, industry professionals said after a July sales report posted a significant gain in the median price.

While the number of homes sold in July miorred the June figure, San Joaquin County's  median home price bumped to $165,000, a 10 percent increase over the previous month's $150,000, according to the Grupe Real Estate-Trendgraphix monthly sales report, based on Multiple Listing Service data.

It's the largest single-month increase since home prices began to slide two years ago and is an indicator to some real estate professionals that the housing market hit bottom in April, when the median price was $145,000, and is on the rebound.

"We haven't seen (the median at) $165,000 since December.  The past seven months had been pretty steady, a little up or down, but what this tells me is that we have some stabilization and are potentially heading up," Grupe Real Estate broker Jerry Abbott said.

In July 2008, the median price was $215,000 but sliding downward.

The optimisim goes only so far, however.  Abbott and his industry colleagues have reserved some concern in anticipation of a second wave of foreclosures that banks have held off the market in an effort to help sturggling homeowners modify loans.

Prices are on the upswing because competition between buyers is escalated by a lack of inventory on the market.  If too many homeowners are unable to rework their loans, and their foreclosed properties flood the market, the law of supply and demand could dictate a lower pricing point for buyers, experts say.

"There are multiple offers on everything right now," Stockton real estate agent Art Godi said.  "There's a pent-up demand that is driven by a low inventory.  It's so competitive right now, you have buyers willing to make offers above the asking price before they see the home, because they're worried if they wait, it will be sale pending before they even have a shot at it."

Buyers are also eager to make their purchases while interest rates remain low and before an $8,000 federal tax credit expires Novemeber 30.

Keller Williams Realty agent Jill Flewitt of Tracy said she believes the $165,000 median is a little bit lower than where prices should be.  However, she said real estate's seeming recovery is unnatural.

"The banks are creating an artificial demand by holding onto foreclosed properties, and that's driving up the price," she said.  "Until they release the defaulted properties onto the market, we have no idea what the market actually is."

Abbott said foreclosures make up 52 percent of the San Joaquin County market, and short sales- homes offered for less than their owners owe- make up 31 percent.  The other 17 percent are conventional or what Abbott calls "organic" sales.

A $15,000 median price increase in one month will become significant, some say, when the banks relate the price differential as equity.

"The true test is going to be when a homeowner goes to the bank and asks for a $15,000 line of equity, and the bank gives it to them," Stockton real estate broker Paul Jacobsen said.  "That's when we'll know for sure that home values are increasing."

Reid, Keith. "Median Home Price Jumps." The Record [Stockton] 13 Aug. 2009, Business sec. Print.

 

On Tour!

by The Barringer Team

Back in 1986 I started my career with Century 21 Alta in San Mateo California.  I and another guy, Fraiser, were brand new.  Fraiser was a retired jet pilot for Chevron executives and he flew them around the world for 30 years.

We kind of buddied up and went on home tours in San Mateo.  Home tours were on Tuesday's.  Home tours are when realtors have brand new listings they want to make all of the agents aware of.  So agents will tour homes with their client's needs in mind.

Well, this was our second or third tour.  Most realtors will open the home and put refreshments (i.e., donuts, coffee or orange juice) for the realtors on almost all of the listings and the realtors will tour the home with their donut and coffee.  So Fraiser and I read the sheet and pull up in front of this home and the front door is open, as is most of the homes on tour.  We walked into the house and there on the kitchen table are some donuts and orange juice.  Fraiser and I grad a donut and start walking the property.  We figured the agent must be in some other part of the property.

We were walking down the hallway and we see this guy getting out of his bed with a startled look on his face.  Fraiser says, "Oh, excuse me, but you better get up, there will be a lot of realtors coming through any minute."

The guy says, "What are you talking about?  Who are you?"

Fraiser replies, "We are the realtors and your home is on tour, right?"

He says, "I don't know what you're talking about, my home is NOT for sale!  The home next door is for sale."

We had walked into this guy's house, helped ourselves to his donuts and started walking around his home!  We were lucky we didn't get shot. He was very nice about it and we all had a good laugh.  Needless to say, we double even triple checked from that day forward before we walked in a home on tour.

Buy Foreclosures

by The Barringer Team

I happened upon this article the other day and found it to be very much like our market here in the San Joaquin valley.  As you read, follow it closely for it is very beneficial for those of you out in the market currently looking to purchase a home.

 

In many markets, if you want to buy a repossesed property, you better come with your best offer first- and fast.

You've heard of speed dating?  It's got nothin' on foreclosure buying these days.  In many places, anyone who wants to buy a foreclosure better act fast, or they're going to come away with bupkus.

REOs, the industry term for homes repossesed by lenders and put back on the market, are often selling in a day- sometimes in less.

"We're seeing REOs go very quickly.  Offers come in immediately after the listing comes on the market, with 24 hours," said Brad Geisen, founder of Foreclosure.com.  Some homes have been put into contract in less than 90 minutes.

In Stockton, California, foreclosure ground zero, the market has changed radically.  Last summer, Cesar Dias became famous for founding the "foreclosure tour," in which he packed potential buyers on a bus and ferried them around to some of the thousands of distressed properties.

Today, the foreclosure tour in Stockton is history.  There are too few REOs.

"For every listing that comes out, we have 10 buyers," said Dias, an agent with Approved Real Estate Group.  "We had a lot of inventory last summer.  Now we're down to 1,500 listings- from more than 5,000."

San Diego buyers face the same trend.  "Agents have one or two REO listings now, compared with 15 or 20 a year ago," said realtor Adrianna Delgado of the Delgado Group.

And there's almost no negotiating, no back-and-forth, after the initial bid.  "We don't get a counteroffer," said Delgado.  "The sellers just ask for your highest and best bid.  If you're not prepared to send in your best bid the first day, you may as well stop looking."

In Florida there are so many buyers for foreclosure listings that real-estate investment companies, which had been snapping up properties, are now facing stiff competition, said Vanessa Grout, VP for aquisitions at New Valley, a real estate investment fund.

Even in distressed Detroit, REOs are still in high demand.  "For a good house that's not too beat up, in a good neighborhood, there's no lack of buyers in this market," said Andy Sakmar, founder of Century 21 Sakmar in the Motor City suburb of Rochester.  "There are a lot fewer of these properties than a year ago, and the super buys get multiple offers."

Priced for speed.

The biggest factor in the feeding frenzy is, of course, rock-bottom prices.  Banks are pricing homes to move.

Sakmar tells of an REO that recently went to sale in a community of mostly $300,000 homes.  It was in good shape and should have sold for $200,000, in Sakmar's opinion.  Instead, the bank listed it for $129,000.

"It drew thriteen offers in two days," he said.

That kind of cut-rate pricing is very common, according to Foreclosure.com's Geisen.  Instead of holding onto REOs for the best prices- and paying the proerty taxes and maintenance and heating costs- banks are selling the homes as quickly as possible.

"In this market, if they can liquidate them fast, it makes more sense to get them off the books," he said.

The trend is causing intense agita for buyers.  "People feel like they're getting left out," said Dias, the agent in Stockton.  "We show a house on the weekend and it's gone by Monday."

"There are plenty of buyers ready to move," added Mark Brandemuehl, a spokesman for Movoto, a California real estate broker that speacializes in foreclosures.  "They tell their agents to make bids right away, as soon as they see something suitable come on the market."

Bubble markets

The hot spots for this fast-paced foreclosure activity are former bubble markets where foreclosures soared- places like California cities Sacramento, Riverside and San Bernardino.

In Sacramento, for example, the inventory is down to less than 30 days, making it a cut-throat market.  The agents specializing in REOs "having nothing to sell," said Brandemuehl.

On average, inventories of California homes under $300,000, the most popular price point for foreclosure buyers, have shrunk drastically, from a nearly 10-month supply a year ago to less than three and a half-month supply today, according to the California Association of Realtors.

Nationally, the number of bank-owned properties diminshed by 26% from June 2008 to June 2009.

The industry attributes the drop in inventories to foreclosure prevention efforts by President Obama and various state governments.  In particular, they cite moratorium programs that, at the very least, postponed foreclosures.

The bad news is that as the moratoriums lapse, more REOs will likely hit the market.  That's because these efforts tend to delay foreclosure rather than stop it.

"Every lender I talk to has been telling me there's every indication that a tsumani of new properties coming to the market later this fall," Sakmar said.

Geisen sees the same flood, but he attributes it to consumers failing out of Obama's foreclosure-prevention program, Making Home Affordable.  He believes that many of the modified loans will fall back into foreclosure- especially if the economy doesn't perk up soon.

In fact, last year the U.S. Comptroller of the Currency found that 53% of loans that were modified in the first half of 2008 fell back into arrears.  Although, that was before Making Home Affordable standardized the terms and qualification process.

Still, Geisen said, "There'll be another wave of foreclosures.  The wave that Obama stopped- temporarily."

CNNMoney. Buy Foreclosures now- before it's too late. CNNMoney. CNN, 5 Aug. 2009. Web. 10 Aug. 2009. <cnnmoney.com>. 

Home Buying Mistakes

by The Barringer Team

I would like to share with you a story that I came across today in the Wall Street Journal.  It is very fitting for the situations we have seen in recent months.

 

Like many first-time buyers who want to take advantage of the $8,000 tax credit before it expires on November 30, Brendt Montgomery was in a rush to buy a home.  And whtat better than a seemingly bargain-priced distressed property?

Mr. Montgomery, a 25 year-old manufacturing engineer, recently moved to Atlanta from Pittsburg.  After looking around for a day, he quickly found a condo that had been repossesed by the bank.  He gave it a quick tour, made an offer and then embarked on a short vacation.  While he was gone, a bidding war erupted, and spurred by the competition, he upped his bid to $143,100.  His offer was accepted,, and as soon as he returned, he signed a 33-page contract without really reading it.  He was thrilled.

But the high didn't last more than a week or two.  After paying $2,000 for an earnest money deposit, plus $250 for an inspection and $85 to the condo association- but before the deal closed- he again toured the condo.

There were problems: dirty carpets, mold in the air conditioning system, holes in the wall.  He had second thoughts about how secure the first-floor location might be, and realized that the north-facing windows would never let in much light.  "It was a little depressing," he says.  "I realized I'd acted hastily."

Mr. Montgomery called his agent and asked how he could unwind his deal.  He quickly learned that backing out wouldn't be easy or cheap.  He agreed to talk about his mistakes so that other first-time buyers wouldn't duplicate them. 

His first mistake was to sign a contract after looking at listings for only one day, even though he'd spent considerable time beforehand doing online research.  But one day, he now realizes, really isn't enough time to get to know a neighborhood or to explore all of the potential deals, and he's sorry now that he rushed.  Just to get a tax credit, "it's not worth buying a property you're not satisfied with," he says.

His second mistake was to decide on a condo based just on the purchase price, without taking into consideration taxes, homeowners' association fees, and the cost to fix up and maintain a distressed property.  He admits in the excitement of a bidding war, he didn't calculate these costs; he was focused only on winning the deal.  He started doing the math only after he'd signed the papers, and soon regretted not adding up these expenses before he'd committed himself.  "There were little issues I hadn't anticipated that would add up in the long run," he says. 

His third-and probably most important- mistake was not to read the contract carefully before he signed it.  The contract stipulated that if he backed out of the deal, he'd lose his $2,000 earnest money deposit, plus other out-of-pocket expenses, and also make him responsible for paying the entire 6% brokers' commission.  He wishes now that he'd negotiated those provisions.

Luckily, there was a contractual loophole: His parents recinded the down payment money that they were gifting him, so he no longer qualified for a mortgage. The agents involved didn't press for the commsion, but he lost his deposit.

Mr. Montgomery was much more cautious in his next round of house-hunting.  Eventually, he found a new condo that has more space and better views than his original choice, and made an offer.  But this time, before he signed any papers, he had his agent run comparable sales priced, figured out his total monthly expenses, and had an attorney read over the fine print.  The offer was accepted, and Mr. Montgomery is looking forward to closing the deal.  "I've learned some valuable lessons," he says.

Before You Buy Your First Home…

  • Research properties online, but don't make a decision until you've toured a number of places, talked to neighbors, and developed a feel for the community.
  • Prepare a monthly budget, and factor in costs for taxes, association fees, insurance, maintenance and repairs, as well as the mortgage.
  • Make sure that any contract that you sign, even for a foreclosed property being sold "as is," has a clause that allows you to have an inspector examine the property, and to cancel the deal without penalty if you don't like the findings. That will give you an out should the cost of repairs be too high.
  • Understand that any contract that's prepared by the seller will protect the seller's interests, not yours. Read it carefully and question any provisions that you disagree with or don't understand. And have your own attorney review it.
  • Realize that if you back out of a contract, you may lose your deposit and be liable for brokers' fees. If you don't have a valid reason to cancel, legally you may be obligated to go through with the sale.

Fletcher, June. "Rookie Home Buyer Mistakes." Wall Street Journal [New York] 3 Aug. 2009, House Talk sec. Print.

Check out this Month's Pod Cast

by The Barringer Team

Please Check out this months Pod Cast by clicking on the link below. Call or e-mail us to get you started on your pre-approval process.

http://www.talkrealty.com/billbarringer/audio/player.aspx

Tracy Area Market Report 8/3/09 vs. 7/2/09

by The Barringer Team

The following information is from the local MLS database, as of August 3, 2009 and is compared to (July 2, 2009).  If you are interested in a little more market information feel free to give us a call, we are always happy to talk about the market.

Tracy, CA

ACTIVE Status

Total # of residential properties for sale in the city of Tracy: 343 (355)

# of REO (foreclosures): 34 (47)

# of Short Sales: 247 (244)

Average # of days on market: 113 (119)

The median price of all homes for sale in Tracy: $270,499 ($241,900)

The average price of all homes for sale in Tracy: $396,119 ($353,817)

Lowest priced home: 1bd/660 sq. ft./$50,000

Highest priced home: 6bd/5,667 sq. ft./$1,650,000

Square Feet

# of homes for sale in Tracy

Median List Price

Average List Price

1,000 to 1,400 *

9

$139,900

$151,043

1,500 to 2,000 **

7

$189,000

$180,400

2,000 to 4,000

48

$322,575

$413,330

 

PENDING Status

Number of properties currently under agreement: 321 (359)

# of REO: 162 (189)

# of Short Sales: 107 (127)

Average pending price: $212,798 ($222,201)

Average pending home is 4 bedrooms, 1,921 square feet at a price of $212,798 that stays 46 days on the market.

Square Feet

# of homes pending in Tracy

Median List Price

Average List Price

1,000 to 1,400 *

67

$130,000

$128,209

1,500 to 2,000 **

89

$200,000

$195,845

2,000 to 4,000

131

$269,000

$277,032


SOLD Status

Residential property sold over previous 30 days: 136 homes or $31,601,408 in sales (168 homes or $36,079,370 in sales)

REO’s sold in the last month: 87 (123)

Short sales sold in the last month: 30 (30)

Average sale price: $232,363 ($214,758)

Median sale price: $228,500 ($200,000)

High: 975K (5bd/7,004 sq. ft. home)

Low: 53K (2bd/737 sq. ft. home)

Square Feet

# of homes sold in the last month in Tracy

Median List Price

Average List Price

1,000 to 1,400 *

15

$132,000

$136,881

1,500 to 2,000 **

38

$190,000

$188,357

2,000 to 4,000

63

$284,000

$296,366


Mountain House, CA

ACTIVE Status

Total # of residential properties for sale in the city of Mountain House: 95 (97)

# of REO (foreclosures): 8 (5)

# of Short Sales: 75 (79)

Average # of days on market: 62 (62)

The median price of all homes for sale in Mountain House: $314,900 ($320,000)

The average price of all homes for sale in Mountain House: $313,080 ($337,136)

Lowest priced home: 2bd/1,262 sq. ft./$174,900

Highest priced home: 5bd/4,021 sq. ft./$549,950

Square Feet

# of homes for sale in Mountain House

Median List Price

Average List Price

1,000 to 1,400 *

3

$179,900

$180,933

1,500 to 2,000 **

3

$219,900

$211,767

2,000 to 4,000

11

$330,660

$350,505


PENDING Status

Number of properties currently under agreement: 73 (90)

# of REO: 24 (32)

# of Short Sales: 34 (37)

Average pending price: $293,378 ($303,375)

Average pending home is 4 bedrooms, 2,551 square feet at a price of $293,378 that stays 49 days on the market.

Square Feet

# of homes pending in Mountain House

Median List Price

Average List Price

1,000 to 1,400 *

4

$197,200

$188,306

1,500 to 2,000 **

8

$215,000

$212,100

2,000 to 4,000

52

$300,375

$315,501

 

SOLD Status

Residential property sold over previous 30 days: 30 homes or $9,468,017 in sales (29 homes or $9,262,384 in sales)

REO’s sold in the last month: 14 (15)

Short sales sold in the last month: 9 (6)

Average sale price: $315,601 ($319,393)

Median sale price: $333,250 ($310,000)

High: 435K (5bd/3,820 sq. ft. home)

Low: 208.9K (2bd/1,260 sq. ft. home)

Square Feet

# of home sold in the last month in Mountain House

Median List Price

Average List Price

1,000 to 1,400 *

1

$215,900

$215,900

1,500 to 2,000 **

4

$227,500

$229,725

2,000 to 4,000

22

$350,500

$343,196

 

Lathrop, CA

ACTIVE Status

Total # of residential properties for sale in the city of Lathrop: 93 (100)

# of REO (foreclosures): 18 (13)

# of Short Sales: 56 (68)

Average # of days on market: 32 (60)

The median price of all homes for sale in Lathrop: $199,900 ($195,938)

The average price of all homes for sale in Lathrop: $212,389 ($218,163)

Lowest priced home: 2bd/768 sq. ft./$74,900

Highest priced home: 6bd/3,743 sq. ft./$710,000

Square Feet

# of home sale in Lathrop

Median List Price

Average List Price

1,000 to 1,400 *

4

$113,950

$108,175

1,500 to 2,000 **

8

$145,950

$157,638

2,000 to 4,000

22

$221,975

$249,072

 

PENDING Status

Number of properties currently under agreement: 142 (129)

# of REO: 74 (77)

# of Short Sales: 36 (31)

Average pending price: $181,889 ($182,286)

Average pending home is 4 bedrooms, 2,266 square feet at a price of $181,889 that stays 41 days on the market.

Square Feet

# of homes pending  in Lathrop

Median List Price

Average List Price

1,000 to 1,400 *

20

$109,950

$107,078

1,500 to 2,000 **

31

$146,900

$150,718

2,000 to 4,000

88

$199,000

$209,710

 

SOLD Status

Residential property sold over previous 30 days: 48 homes or $8,956,900 in sales (63 homes or $11,506,668 in sales)

REO’s sold in the last month: 33 (47)

Short sales sold in the last month: 8 (11)

Average sale price: $186,602 ($182,646)

Median sale price: $173,450 ($180,000)

High: 290K (6bd/3,743 sq. ft. home)

Low: 72K (3bd/1,040 sq. ft. home)

Square Feet

# of homes sold in the last month  in Lathrop

Median List Price

Average List Price

1,000 to 1,400 *

4

$113,500

$111,000

1,500 to 2,000 **

13

$162,000

$155,231

2,000 to 4,000

28

$212,250

$217,282

 

Weston Ranch, CA

ACTIVE Status

Total # of residential properties for sale in Weston Ranch: 99 (104)

# of REO (foreclosures): 19 (31)

# of Short Sales: 66 (65)

Average # of days on market: 41 (35)

The median price of all homes for sale in Weston Ranch: $164,750 ($144,200)

The average price of all homes for sale in Weston Ranch: $159,744 ($147,563)

Lowest priced home: 3bd/1,041 sq. ft./$69,900

Highest price home: 6bd/3,376 sq. ft./$259,950

Square Feet

# of homes for sale in Weston Ranch

Median List Price

Average List Price

1,000 to 1,400 *

4

$119,450

$124,450

1,500 to 2,000 **

11

$145,000

$137,145

2,000 to 4,000

16

$184,950

$186,008

 

PENDING Status

Number of properties currently under agreement: 114 (119)

# of REO: 70 (78)

# of Short Sales: 32 (29)

Average pending price: $137,900 ($137,009)

Average pending home is 4 bedrooms; 2,006 square feet at a price of $137,900 that stays 28 days on the market.

Square Feet

# of homes pending in Weston Ranch

Median List Price

Average List Price

1,000 to 1,400 *

10

$104,450

$106,640

1,500 to 2,000 **

46

$124,975

$123,962

2,000 to 4,000

49

$160,000

$163,461

 

SOLD Status

Residential property sold over previous 30 days: 54 homes or $7,869,380 in sales (77 homes or $10,869,868 in sales)

Short sales sold in the last month: 7 (10)

Average sale price: $145,729 ($141,167)

Median sale price: $140,000 ($135,000)

High: 224.8K (6bd/3,376 sq. ft. home)

(218K (5bd/3,376 sq. ft. home))

Low: 90K (3bd/1,307 sq. ft. home)

(98K (3bd/1,214 sq. ft. home))

Square Feet

# of homes sold in the last month in Weston Ranch

Median List Price

Average List Price

1,000 to 1,400 *

4

$117,500

$112,500

1,500 to 2,000 **

19

$125,000

$127,631

2,000 to 4,000

31

$150,000

$161,110

 * $0-$250,000

** $0-$260,000 

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The Barringer Team
Century 21 M&M and Associates
912 W 11th Street
Tracy CA 95376
209-833-7777
800-984-7282
Fax: 209-229-7426
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