I always hear the media ( as I am sure you do too ) throw out numbers regarding the housing market. Such as 1 million homes in foreclosure!!! Now 1 million is a big number to most of us, but how big a number is it in relationship to the total number of homes in the US? 1%, 5%, 50%? The media never seems to report that number or any number that gives us a relationship, a comparison value. I love numbers, but to me they are meaningless without the back story of how the data was gathered, how big was the data pool, who gathered the data, was it verified………….and so on. One of my favorite “stories” starts with 2 out 3 people agree that………..- right away I am thinking how many were polled: 5 or 50,000?
So here are some market numbers from MY market in Placer County (Auburn, Foresthill,Colfax, Alta areas)
Auburn to Alta Single Family Homes Market Data Jan 2012
Trendgraphix Market Data Auburn Area Reg Sales Jan 2012
Trendgraphix Data Short Sales Auburn Area
Market Data Auburn area Bank Owned Single Family Jan 2012
The first graph shows all the listings and sales including pending sales. I can see pending sales are up (good for sellers).
The second graph shows only regular sales – non distressed homeowners, “normal” sales. The active inventory compared to the pending and sold numbers is high. About a 10 month inventory. (good for buyers)
The third graph is the short sales. I see a spike in pending sales. These would be homes that have been in the short sale process for awhile and the lender has give approval to proceed. (good for buyers and sellers, shows lenders are approving short sales)
The last graph is the bank owned property sales (post foreclosure, REO’s*) A little spike in pending sales there too.
So you ask what DO the numbers mean?
If I dig a little more into the data, I see that average price per square foot for regular sales is $168, for short sales $134, REO’s $102. Does this mean REO’s are the best deal? Not necessarily, I know from experience that most REO’s are in poor condition, while most regular sales are in good to excellent condition. The data also tells me the average REO price is below $200,000., the average short sale price is mid to high $200,000’s and the average regular sale is mid to high $300,000’s.
Where might there be opportunities?
In my opinion there is a lot of competition among buyers for the bank owned properties. Perception is they are good “deals”. Reality maybe not, take into consideration repairs, deferred maintenance, unknown issues because you don’t get the history from the non-occupant seller. Also possibly higher purchase costs, in many cases the buyer is paying for costs usually paid for by sellers in regular sales.
Short sales, can be a good deal for a buyer, if you have the patience to get through the process and can deal with the uncertainty of waiting for the lender to approve the sale and price.
Regular sales, sellers need to evaluate their pricing and make sure they are competitive and realistic, don’t be offended by a low offer: at least the door has opened. Buyers don’t be shy, if property is overpriced, do your research and make an offer. Some of the best deals may be here if sellers and buyers can come to agreement.
If you like to play with numbers you can access & create market data reports for the greater Sacramento & Foothill areas on my website: www.FoothillsHotProperties.com I am also happy to create a monthly report for you, call or email me with your criteria.
Have Fun! Question the numbers!