Del Norte County Market Observations - April 20, 2010
I haven't been blogging too much in 2010, the reason? My REO business is increasing along with my regular listings and it's keeping me busy, but I still have time to watch the market closely and I have noticed some trends that may be helpful for buyers and sellers in this market.
My first observation for our current market:
- The shift seems to be from homeowner REO's to investor REO's - The majority of the REO listings I had in 2009 were owner occupant, but I would say 90% so far this year have been investor owned and the tenant didn't know a thing until the very end when I showed up to offer Cash For Keys. I have also noticed that many investor's have more than one home, bringing several REO's to market in a short period of time. I expect the REO trend to continue. I have read that many experts feel we have only seen 35% of the anticipated foreclosures hit the market.
Bringing us to observation number 2:
- Prices are falling- The Beresa tract of homes would be a good example. Prices at the height of the market in 2005 were in the mid to high 200k range. Homes have fallen in price over 50% since that time and continue to do so. I have an REO listing in that tract for $114,900 and two more coming up within the next few weeks. I expect those prices to be at the $100,000 mark. This affects more than REO's. If you are living right next door or even a block away and want to sell your home, you have to compete.
Even if your home is in better condition, the REO listing is still going to effect the price of your home. If not in the offer price, it will in the appraisal. The appraiser will no doubt take into consideration the fact that your home is not a distressed property, but in the case of the Beresa tract and many others, the appraiser will be hard pressed to find a comparable to use in his report that is not a distressed property let alone three comparables.
With the decline in sales, new home construction in Del Norte County has slowed but thankfully, it still exists.
Bringing me to observation number 3:
- There are some good deals on new construction and if you hurry, you can cash in on the California tax credit for purchasers of newly built homes - This tax credit is a pool of money that is first come, first served and with a plethora of new construction all over the state, it's going fast.
- There are some benefits to buying new construction:
- A one year warranty on workmanship
- New appliances, water heater and new everything that all comes with warranties
- Generally energy efficient to meet the newer guidelines for construction
- Two brand new subdivisions: Redwood West and Bay Meadows
- There are some benefits to buying new construction:
Observation number 4:
The decline in prices has brought homeownership to buyers who have been priced out of the market for years, and, we have financing for them!
- All of Del Norte County meets the criteria for rural housing, making the GRH rural housing loan program one of our major financing programs for low to moderate income folks. Yippee to this. I personally enjoy handing the keys to first time home buyers, especially buyers who never thought they could purchase.
- Consider that the median home price for homes sold so far in April is $101,000, the range for first time home buyers. I know I've handed keys to several first time home buyers in the past few months. Also consider 50% of sales this month have been REO's. Guess who is snapping them up?
Bringing us to observation number 5:
- It's a great time for the investor to purchase - Rents are increasing due to low supply of rentals and increased demand. Investors are tired of getting 1% on their money and are pouring money into the real estate market to cash in on the great deals that the first time home buyers are enjoying.
- Homes in the lower price ranges are experiencing multiple offers and bidding wars in many cases (if they are priced right). This is something that should catch the attention of sellers in every price range.
Concluding with observation number 6:
- It's tough to sell an upper end home right now - So far this year only three homes have sold in the $300k price range and no residential listings have sold over $368,000. If you want to attract buyers in the upper end price range, you must have the most competitively priced home in your price range. There are very few buyers and plenty of listings, so get your game face on and be ready to compete for those buyers by offering an incentive such as paying a % of buyers closing costs.
Six parcels of land, two commercial listings and the first multi-family sale in over a year round out the activity for sales so far in 2010.
The real estate market is still moving in Del Norte County, however, lower-end, extremely affordable homes are what is driving the market at this point. If you are a buyer, you must be pre-approved with letter in hand to compete for listings in this price range. Asset managers who handle negotiation's for bank owned properties will not even look at an offer unless the buyer has either their proof of funds or pre-approval letter and if you are a seller, get ready to make your home sparkle and list at a competitive price to sell in a timely manner.
I am happy to answer any of your questions pertaining to Del Norte County real estate.
Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2009, 2010 and 2011--*in units sold and volume--than Fran Gatti. Put Fran to work for you!
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Thanks Fran,
I believe the observations are good and you hit the nail on the head.
Fran,
Excellent post; one of the most informative I have seen in a long time. Thank you for sharing.
Fran, This trend seems to be here in our market as well. Things have picked up and we are seeing a slight upturn.
Fran,
That was a great post with a lot of good information.
Could you tell me how you attach the postlets to the side of your blog?
Thank you,
Alan Grizzle
Chestatee Real Estate