Welcome to the "Z" Team!

Waiting a few years to sell? Make a few changes for your desires?  Many home owners are opting to tackle improvement projects around the house, according to a new survey of 1,500 adults by American Express Spending and Saving Tracker.

Seventy percent of home owners surveyed say they intend to take on a home improvement project this year, and they plan to spend about $3,500 on sprucing up their home, according to the survey. That’s an increase of about $100 compared to last year.

The projects will primarily concentrate on the indoors, according to the survey. More than one-third of those polled say they are devoting some of that budget to home accessories, such as throw pillows, or on appliances and new furniture.

The top home project they have lined up? Painting, which 37 percent of those surveyed say they plan to do this year. Twenty-four percent said they will do landscaping projects. These could be improvements or upgrades to increase value for a future sale?

Also, more home owners this year compared to last year say they’re going the do-it-yourself route, with plans to refurbish their houses themselves rather than hiring a professional to do it. In the survey, 43 percent of owners say they’ve been inspired to tackle home projects themselves by watching design shows on television, followed by seeing in-store displays or from viewing online design and do-it-yourself Web sites.

Source: “Home Decision 2012: Improving or Moving?” American Express (3/12)

The housing supply is expected to normalize in two to four years, Barclays Capital projects, assuming that household formation rates increase to 1.1 million and construction remains slightly above 2011 levels.

Household formation–which is a reflection of population growth and housing affordability–has drastically dropped since 2007, reaching about 300,000 to 500,000 per year. Historically, the rate is about 1.25 million.

Home prices will likely see a 1 percent appreciation this year (that’s after falling 3 to 4 percent through March), Barclays Capital estimates. It is also projecting a 1 percent price appreciation in 2013, followed by 2 percent to 3 percent appreciation levels.

But to reach those goals, the housing supply needs to continue to shrink first. Our region in the Sierra Foothills of Placerville, California is experiencing a low supply in the under $300,000. price range. This is the primary market for first time home buyers and cash investors. So we’re off to a supply, demand race for the spring market?

Source: “Barclays: Housing Supply Could Normalize in 2014,” HousingWire (3/2/12)

Living near an occupied property in foreclosure can bring down home prices nearly twice as much than just living next door to a vacant home, according to a new study by the Federal Reserve Bank of Cleveland, which analyzed sales data of nearly 10,000 homes in the Cleveland area. This data seems to be in line with our Placerville, CA. regions.

“The impacts of homes with multiple indicators of distress are larger than the impacts of homes that are only vacant, delinquent, or recently foreclosed,” the researchers found.

Some findings from the study:

• Homes within 500 feet of at least one vacancy sold 0.8 percent lower. 
• Occupied home that had recently entered the foreclosure process lowered the sales price of nearby homes by 1.8 percent.
• Sales within 500 feet of a home where a delinquent borrower abandoned the home saw, on average, a 3.1 percent drop to home values. 
• The largest drop was from homes that were tax delinquent, vacant, and foreclosed: Home sales prices within 500 feet were found to be 9.6 percent lower. 

Source: “Study Finds Foreclosures Harm Home Prices More Than Vacancies,” HousingWire (Oct. 20, 2011)

The Appraisal Institute recently released a form to help appraisers factor in energy-efficient home features when valuing homes. The forms can also be used by real estate agents in describing “green” properties on the MLS, the Appraisal Institute notes. 

Everything from a home owners’ energy efficient appliances to solar panels may now get more attention from appraisals with the added form.  

The new form allows appraisers to identify and describe a home’s green features. It will serve as an optional addendum to Fannie Mae Form 1004, which is the appraisal industry’s mostly commonly used form for mortgage purposes, used by Fannie Mae, Freddie Mac, and the Federal Housing Administration. 

“We hope lenders, home builders, real estate agents, and home owners will take advantage of this new tool,” Joseph C. Magdziarz, president of the Appraisal Institute, said in a statement. “Mortgage lenders who want to see energy features analyzed should request the green addendum to be included with Form 1004. We also encourage lenders to provide the green addendum to home owners so they can fill it out and provide it to their appraiser. If a new home is being appraised, home builders can use the addendum to provide data to appraisers. Real estate agents also can use the data to help populate the MLS.”

 Source: “Appraisal Institute Issues Form to Help Real Estate Appraisers Analyze ‘Green’ Features,” RISMedia (Sept. 29, 2011)

 Other Placerville, El Dorado County, California information at: www.dougandbudzeller.com

Short sale transactions are becoming less popular among first-time home buyers. Buying a home in a short sale transaction may offer a huge bargain—sale prices average 27 percent lower than non-distressed properties—but more first-time home buyers say the processing delays aren’t worth the trouble.

Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August—posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers’ share of short sales had reached a peak of 54.1 percent of all short sale transactions. 

With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.

Source: “First-Time Buyers Losing Interest in Short Sales,” RISMedia (Sept. 26, 2011)

Other Placerville, El Dorado County, California information at: www.dougandbudzeller.com

A lawsuit is being revived in federal court from a group of California home owners who allege that eight major homebuilders are responsible for the loss in value of their homes and for their neighborhood becoming less desirable. 

The home owners had purchased homes from 2004 to 2006 in new developments built by the eight major builders in the Inland Empire region of California. The home owners claim that the developers represented the homes as “stable, family neighborhoods.” But in the lawsuit, they allege that the builders marketed the homes to and financed unqualified borrowers, which in turn led to a “buying frenzy” that artificially inflated prices. 

Following the housing bubble, foreclosures and short sales in the neighborhood skyrocketed, leading to a high number of abandoned homes and unkempt yards and crime, the home owners say in the lawsuit. 

A federal district judge in Riverside, Calif., had originally dismissed the lawsuit, but the 9th U.S. Circuit Court of Appeals in San Francisco on Wednesday disagreed, saying the home owners could continue to pursue their fraud claims against the builders. The court said that the home owners sufficiently alleged that the builders’ practices “inflated the ‘bubble in their particular neighborhoods” and that “decreased economic value and desirability” are injuries that home owners can recover damages for in court.

Among the builders named in the lawsuit: Beazer Homes USA Inc., DR Horton Inc., Lennar Corp., MDC Holdings Inc., Pulte Group Inc.’s Centex homes, Ryland Group Inc., Standard Pacific Corp., and Shea Homes Inc.

Source: “‘Buying Frenzy’ Lawsuit vs. U.S. Homebuilders Revived,” Reuters (9/21/11)

The National Association of REALTORS® reported that 16 percent of real estate professionals surveyed in June reported a cancelation in a sale, mostly due to a large number of low appraisals. 

Many real estate professionals are watching deals unravel, with some appraisals coming in 10 to 20 percent — or even more — below the accepted offer. Our Placerville, El Dorado County region has been no exception during the past 3 years. Generally, it seems some appraisers are not familiar with the area or don’t do necessary research?  

“Over the past decade, finding ‘comps’ that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust,” according to a recent article by RISMedia, 5 Ways to Fight a Low Appraisal. “Discounts paid for foreclosures and short sales have created a dual price structure between ‘normal’ and distress sales.”

Obviously one of the easiest solutions when a low appraisal comes in: Ask the seller to agree to a lower price? But when that doesn’t work, RISMedia offers some tips for fighting low appraisals. 

Read more tips from RISMedia on how to fight low appraisals. 

Source: “5 Ways to Fight a Low Appraisal,” RISMedia (Sept. 7, 2011)

Freddie Mac’s chief economist is optimistic that the housing market and economy will improve in the second half of 2011.

Freddie Mac Chief Economist Frank Nothaft said mortgage rates will likely remain historical lows of between 4.5 percent and 5 percent for the remainder of the year. Also, he expects more buyers to stop waiting on the sidelines as recent price drops in home prices have improved affordability.

Nothaft said consumers’ uncertainty about the economy has caused them to delay home purchases and other “big-ticket items.”

“Some potential buyers who have the means to buy are awaiting clearer signs that home values have firmed,” Nothaft says.

But Nothaft says they should be getting their signs in the second half of the year, with projected job gains, and a growing, improved economy.

“Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, a number of positive signs in the economy indicate that growth will continue and is likely to accelerate in the second half of this year,” Nothaft said. “Look for a gradual improvement in housing activity in the coming year.”

Source: “Freddie Mac Economist Sees Sunny Economy in Second Half,” HousingWire (June 27, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Home prices continued to fall during the month of May all over the tri-county region. According to DataQuick that keeps up with all these numbers the median selling price of a home in Sac County last month was $160,000 which was 11.6 percent lower than May of 2010.

(The median price is the point at which half the home sales were above and half below.) 

Placer County’s median selling price at $255,000 was 6.8 percent less than a year ago and El Dorado County’s median home price of $259,000 was down 10.4 from May of 2010. El Dorado County still maintains the highest median priced home in the eight county region.

The number of home sales for the region declined 7 percent from last year same month.

“There wasn’t much in the latest sales data to suggest the overall market will pull out anytime soon,” said John Walsh, president of DataQuick.

On the positive side of the real estate news….inventory continues to fall. Available homes for sale are 23 percent less this month than a year earlier. Foreclosures and short sales account for half the sales but the number of actual foreclosures is declining.  

Portion of article by: Ken Calhoon, Real Estate Broker, Placerville, California.

For a recovery in the housing market to take hold, Fed Chairman Ben Bernanke said home prices need to stabilize, more loan modifications need to take place, and the foreclosure process needs to speed up.

Bernanke said that the high number of foreclosures for sale needs to be cleared from the market so prices can stabilize and “give people confidence that they can buy and not be buying into a falling market,” he said, during his second news conference of the year.

Bernanke also said banks need to help home owners who face foreclosure by modifying their mortgages and lowering their monthly payments. Or if modifications can’t be justified, he says banks need to speed up their foreclosure process.

“The housing sector is very important to the overall recovery, so we pay a lot of attention to that,” Bernanke told reporters at the press conference.

Bernanke said the Fed has lowered its economic forecast, expecting the economy to grow at a slower pace than originally projected and for problems to persist into the next year. High unemployment, he noted, continues to be a significant factor not only weighing down the economy but also stalling the housing recovery.

More details at source: “Bernanke Says That Economic Problems Likely Depressed Housing, May Persist into Next Year,” The Associated Press (June 22, 2011) and “Bernanke Says Home Price Stabilization Necessary to Woo Buyers,” HousingWire (June 22, 2011) 

Some of us even in the Placerville, California region have suggested some of these points for 2+ years!