NEVADA COUNTY TURNAROUND IN PLACE

More than six years after the country’s housing market pitched into a deep slide, Harvard’s Joint Center for Housing Studies said a recent increase in home sales, coupled with low ­inventories of available properties and rising rents point to a turnaround in housing prices.

In Nevada County from May 14, 2012 to June 14, 2012 there were 159 single family homes sold with a median price of 230,000 out of 547 actively being offered for sale. If we look at the data from the prior year during the same time period, there were 105 properties sold with a median price of 250,00. So prices are down year over year but we have seen a 50 percent increase in sales volume. The local Realtors, mortgage brokers as well as contractors feel a direct impact and in turn spend more at local stores, thus lifting the local economy.

“There are lots of positive indicators here,’’ said Eric S. Belsky, managing director of the housing center. “A floor is beginning to form under home prices.”

The center’s 2012 report, scheduled to be released today at the Ford Foundation in New York City, contrasts with the forecast it released last year in which Harvard accurately predicted the US housing market would remain sluggish through 2011 as potential buyers remained on the sidelines out of fear prices would continue to fall and the economy still struggled.Another possible boost to home sales, Belsky said, is the rising cost to rent.

Nationwide, the typical renter paid an estimated $881 a month to rent an apartment in December, while the typical homeowner paid $625 a month, according to Harvard. Belsky said current conditions suggest many would-be buyers will find that owning a home is a better deal than renting.

“As markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates,’’ Belsky said. “Monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s.’’

David Stevens, chief executive officer of the Mortgage Bankers Association based in Washington, D.C., said a recovery would be even stronger if lenders were able to loosen strict lending requirements. He said lenders have become increasingly strict about financing buyers, prompted by increased government regulations and concerns about legal liability.

“We are seeing very good signs of recovery but it is not as strong as it should be,’’ Stevens said.

Scott Hopper - Realtor, 530.477.2277

HOME PRICES UP 2.7% IN WEST

Truckee, Calif.-based Clear Capital uses rolling quarters to study home prices. It compares the most recent four months to the previous three months to give users a more timely look at market prices.

The only area with price declines in the recent report was the Midwest, but that area's declines were less severe when compared to April's report.

Clear Capital noted that "REO-only price performance" can explain why certain markets are doing better than others.

"National real estate prices in May have finally moved past the continued losses of the last few years. The subsequent stabilization pattern seen in recent months has progressed into the start of moderate growth," said Alex Villacorta, director of research and analytics at Clear Capital.

"Strength in REO-only price trends as well as some early indications of price gains spreading from low-tier sectors to the mid, and higher-priced homes is helping confirm that the country continues to make progress on its recovery, and we are expecting to see improvements extend over the next several months."

Home price appreciation grew 0.4% at the national level in May, the first quarterly gain since November of 2011. The West saw the biggest jump in prices over the quarter with the region's growth rate hitting 2.7%, up 2.2 percentage points over the previous month's report.

Scott Hopper - Realtor, 530.477.2277

NEVADA COUNTY HOUSE HUNTING TIP

As I have reported prior, the inventory of available homes currently on the market in Nevada County is in decline, which is causing many homes to receive multiple offers. Whether you're anticipating competition when you bid or not, you should be pre-approved for a mortgage before you write an offer. When in competition, being pre-approved will make a big difference, particularly if everyone else who is offering is pre-approved as well. It also lets you know what you can afford. And, it puts you in a good bargaining position with the seller.

Buyers aren't the only participants in today's housing market that have heard the news that the market has improved. Some sellers are putting their homes on the market because they've been waiting for a better time to sell. This is good news for buyers who are looking in the low-inventory markets such as Nevada County. In the past seven days 75 new properties have been added to the local MLS.

(If you would like to be added to the automatic MLS email system, which gives you unlimited access to the MLS, click here and sign up.)

You should expect you will have to negotiate. Many of today's sellers are selling for less than they paid. Even though the market has improved a bit, sellers may be disappointed with the current market value of their home. Be prepared to negotiate, not just the initial price, but after inspections are completed as well, especially if items come up you hadn't anticipated. Many Properties in and around Nevada County have had work done without permits, so look closely.

Include realistic contingency time frames in your purchase contract for loan and appraisal approval if you're applying for a mortgage. The recent uptick in the market means that lenders are suddenly overwhelmed with paperwork.

In mid-April, buyers in Nevada County, who were seeking approval for a loan were told they could close a transaction in 21 days. Not only could they not close in 21 days, it took more than 21 days for loan approval due to lender backlog. You will need time.

In conclusion, If you know you will be looking at homes for purchase this summer get pre-approved for a loan, be prepared to negotiate, check all permits and leave ample time to close the transaction.

Scott Hopper - Realtor, 530.477.2277

HOUSING RECOVERY

Home prices are projected to rise by just under 1 percent nationwide in the second half of 2012 and Nevada County should keep pace with the national average. The inventory of homes available in the foothill region is drying up and prices are beginning to make a turn.

The report, titled The Shifting Nature of U.S. Housing Demand, stated investors who buy rental properties are leading phase one of the recovery, as opposed to buyers who purchase properties as their own residence.

The rate of returns of T-bills are currently low and their prices are high and when comparing the government guaranteed bill as an investment to that of real estate, which has a much higher rate of return accompanied with beaten down values, large investment firms are seeing value.

In 2013, prices will rise by 1.5 percent and up another 2.5 percent in 2014.

For the second phase, home prices will increase 3 to 3.5 percent between 2015 and 2017.

During the first phase, the demand for rental properties will come from young people hit hard by the recession and immigrants.

The housing recovery will come in a two phase process as reported by dsnews.com, Click here for the full story.

“Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make. What will be intriguing to watch is how their aspirations around home ownership are affected by this period of extended austerity (In economics, austerity refers to a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public service provided),” he said.

According to the report, about $7 trillion in American wealth was lost when home prices dropped 30 percent after the housing bubble burst.

As investors buy up the oversupply of homes to take advantage of low prices and rising rents, the report also predicts that this will lead to the absorption of the existing surplus, which will clear by the start of 2015.

Then, phase two will begin with higher home prices and a return to home ownership.

According to the report, currently, 11 percent of homeowners say they would like to sell their home, but about half of these homeowners say they aren’t listing their property because they won’t get the price they want.

It is predicted that once prices rise by 3 percent in 2015, homeowners will start to return to the market, increasing the volume of home sales.

Credit will also become more accessible as standards ease, leading to more renters to become buyers. The report stated a crash in demand for rental properties is unlikely. Therefore their is a floor in the market.

Scott Hopper - Realtor 530.477.2277

FEWER HOMES GOING TO BANKS

The Sacramento Bee is following suit in the news trend, stating fewer homes are currently being foreclosed upon by lenders. (click here) The number of U.S. homes taken back by lenders in April fell 7 percent from March which is the third consecutive monthly decline, foreclosure listing firm RealtyTrac Inc. said Thursday. Home repossessions fell 26 percent versus April last year.


In Nevada County, homes priced under $200,000 are being snatched up very quickly by buyers, many of which  receive multiple offers within days of the listing agreement being signed. In the past two weeks, I saw an Alta Sierra short sale home priced at $175,000 and the bidding is now over $200,000. All this took place prior to a for sale sign being pounded into the ground.


The market is changing.

Scott Hopper - Realtor, 530-477-2277

HOME PRICES ON THE RISE AGAIN IN APRIL

Real estate website Trulia released news on May 3 that confirms asking prices as well as rents are on the rise for two or more months. Please click here for the story. Many markets are experiencing double digit growth such as beaten down markets like Miami and Phoenix are leading the way at 16%. Historically Nevada County lags the overall  market by four to eight months. So this is a great sign for our local market.

The chart below depicts the current inventory within Nevada County

Inventory is falling.

Two year window into the real estate market in Nevada County.

Scott Hopper - Realtor 530.477.2277