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Archive for July, 2013

banks mortgage ratesThe more things change, the more they stay the same. That at least seems to be the truth with rising mortgage rates and the sizzling housing market. Each upward adjustment with rates has caused concerns within the housing community that changes are on the horizon. There has been minimum impact on the overall interest among home buyers, even though rates have increased substantially over the last two months.

Existing home sales fell 1.2% in June, in a report that mostly reflected deals that were made before rates began to rise  in late May. Nationwide, there was a 1% increase in applications for mortgages tied to home sales the week of July 12. During mid-June, when rates were surging, purchase related applications rose by 5% from week to week.

Buyer confidence is not waning, even as fixed 30 year mortgage rates have dipped to 4.37%, after rising more than a percentage point between mid-May and late June. Home builders are feeling exuberant about the present and future as confidence rose 6 points this month, to 57 on a 100 point scale. The confidence index dipped below 10 during the housing bust. July’s climb reflected both higher traffic at traditional open houses and new home developments.

From a historical perspective, rates are still relatively low compared to most of the last 4 decades. The other factor contributing to the upsurge in housing are the shortage of available homes to purchase. Recent surveys show the percentage of sellers who think it’s a great time to sell is still, hence the increase in inventory over the last couple of weeks. Seller shortages are actually a much bigger obstacle for most buyers than rates.

Most properly priced homes are being scooped up with multiple offers. A significant number of these homes are being purchased with all cash buyers, there in lies the other barrier facing buyers with loans. Everything else being equal, sellers are naturally attracted to these cash buyers. With every segment of buyers now back in tow and pursuing homes, this makes for some fierce competition that should continue for the forseeable future.

Will continuous increases in rates stall the market? Could a back log of pent-up inventory coming on the market at the same time, slow the housing locomotive? These are questions with no sure-fire answers. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

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HousingSelectionLogo2013The local housing market, like the rest of California has had a tremendous growth spurt through the first half of 2013. The first six months of housing in Davis could be defined as a rousing success. The number of sold homes were comparable to 2012 numbers, all other categories were greatly improved. Before we diagnose the pulse for the next six months, let’s take a closer look at the first six months.
                     # sold    Price Avg.   Days on market   Price per sq. ft.
2013 totals-    254      $496,965       42                           $280
2012 totals-    241      $450,550        77                           $253
2013 Central- 34       $533,398        36                           $318     
          North-     56       $476,067        33                           $267
          East-        60       $453,257        32                           $287
          West-       53       $492,036       40                           $278
          South-     51        $552,169        68                           $264
2012 Central- 33       $514,439          60                          $295
          North-     60      $383,440         94                          $230
          East-        63       $416,552          69                          $258
          West-      44       $462,574          61                           $261
          South-    41        $536,672          95                          $236
Home prices were up significantly in each area of Davis, while days on the market decreased in all five locations. Price per square foot improved substantially in 2013 compared to 2012 numbers. When we look at the current properties in pending status, the listed price is above the average
sales price for the first six months, which correlates to prices going higher after these homes close escrow.
The inventory will stay relatively low for the rest of 2013, which is historically normal for the fall and winter months. There will not be a 10% increase in prices for the second half of the year, but a 2% to 3% increase would still be enough to keep prices in the double-digit category for the entire year. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

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buyers-sellers_street_sign_575Even though home buyers are purchasing homes at a brisk pace this year, there are still some concerns for the prospects that have not yet bought. The biggest challenge for many are just getting a foot in the door, no pun intended. There are more families making offers and missing out, than buyers actually purchasing homes. That’s the quagmire and our number one concern for tomorrow’s home buyer.

Lack Of Inventory: The main culprit for the complete turnaround of the market. Supply and demand now back in favor of the seller. If inventory were more abundant, there would be more options for buyers and fewer multiple offers on homes. The lack of inventory has started the tidal wave that we are now experiencing. The lack of inventory will more than likely continue through the end of the year with many homeowners holding out longer before selling.

Home Prices On The Rise: Those homeowners that are delaying selling their property understand the cycle has turned and prices are heading up. Buyers are under a time crunch and also realize that prices will escalate in the immediate future. The domino effect of low inventory and high demand has increased home prices by double digits in most cities and towns throughout California and the nation. If home prices continue this trajectory, some buyers will be priced out of the most desired communities such as Davis, California.

Increase In Mortgage Rates: Lost opportunities in recent bidding wars have cost those prospects dearly in higher mortgage rates. If a buyer bought a home at the start of the year, rates were below 4% and home prices has not picked up to the current level. The unfortunate circumstances of losing a home to a higher bid, combined with the rise in rates and prices are a trifecta that has created much angst and sleepless nights for consumers.

All Cash Investors: Investors are back with a fury. That’s when you know real estate is rocking and rolling. Investors are opportunist and have taken advantage of buying properties with all cash offers. In many parts of Sacramento and other affordable areas, investors are buying the bulk of the inventory, which leaves little chance for the first time buyer. Even though buying a home has gotten tougher, it’s still a great time to buy. There are strategies that can put a buyer in an excellent position, even when competing against those all cash investors. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home and easy access to view local area homes for sale in Davis, California and the surrounding communities.

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cfiles18263The first six months of real estate in Davis, California has been a whirlwind of activity.  Euphoria combined with frustration are the most prominent words that explains what’s transpired over the last 180 days. The sluggish market appears to be a thing of the past. Investors have ventured back into the market, first time buyers have felt compelled to buy and repeat buyers now have the financial power to act. With every type of buyer now wanting to purchase a property at the same time and the lack of enough housing to satisfy all of these prospects has now created the market that currently exist. Let’s look at the housing numbers this year and how they compared to last year.

2013 total sales- 248          Avg. sales price- $495,269          Price per sq. ft.- $279          Avg. size- 1799 sq. ft.                                                  

2012 total sales- 241           Avg. sales price- $450,550          Price per sq. ft.- $253          Avg. size- 1781 sq. ft.

That’s a 10% increase in average sales price and price per square foot. The other tell-tale sign that the market has improved is the disparity in asking price and sales price differential. In 2012, there was a 3% separation in asking and sales price. In 2013, there’s been under a 1% difference in asking price to sales price. That would suggest many homes are now receiving multiple offers and some exceeding full price.

As we move into the second half of the year, there is a big change that will have a play in what happens the rest of the year. Mortgage rates were under 4% through a large portion of the first half. Rates have now risen to well over 4% just recently. This has not to this point had any ill effects on the market as a whole. The rate increase might not slow the market, but could delay the climb in home prices. The cash buyers will stay active and continue to do their part to keep the Davis market churning along. Some first time home buyers might get priced out of Davis and be forced to move to some the more affordable neighboring communities.

We can expect prices to stabilize the rest of the year and maintain the double-digit gains in home prices and price per square foot that were achieved this year and carry into the second half of 2013. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs, join my professional networks on Twitter and LinkedIn and easy access to view local area homes for sale in Davis, California and the surrounding communities.

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