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creekside-place-homeTiming is important in every aspect of someones life, never more so than the optimum time to sell their home. There’s probably fewer landmines when selling a home in Davis than other areas and timing is not as important here than maybe some other communities. Even now as the inventory increases, well priced homes are selling rapidly and in some cases, above asking price.

Even as the year started, home buyers were out in mass visiting open houses and making offers. As home values continue to increase, up 20% since 2012, there are a few concerns that might reverse the current trend. Mortgage rates are expected to rise between now and the Fall season. This will affect how much home a buyer can purchase and possibly put a dent in the surplus of buyers that are currently on the market.

The other obstacle is the new Cannery Subdivision that is now laying the ground work for a Summer grand opening. The expected price of these new homes will be in the neighborhood of $600,000 and up. They will also have some of the highest taxes in Davis, but families looking for a new home will certainly wait for this opportunity. Beware of the first phase of any new subdivision, they always offer the least desired location.

Enough of the negative. We currently have 85 properties for sale in Davis at an average listed price of $694,685 and a price per square foot of $346. There are 77 homes in pending status that average $593,195 and a price per sq ft of $334. As of May 11th this year, there have been 158 properties sold at an average sales price $556,608 and a price per sq ft of $330.

Through the same period in 2014, there wer 139 Davis homes sold at an average sales price $551,372 and a price per sq ft of $306. In 2013 we had 163 sold properties at an avg. sales price of $483,344 and a price per sq ft of $273. The early signs are obvious that property values are up, but those numbers would also suggest that home values in Davis will continue to rise for the immediate future.

The pending home sales will increase the overall sales price over the next few months. Timing is vital when selling a home in Davis, California and the time is perfect for home sellers in the current housing environment. Please visit my website JohnnyBrooksHomes.com for helpful tips on buying and selling a home or to view any property on the market in Davis or our surrounding communities.

 

 

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12454836-key-with-tag-saying-sold-on-small-family-houseIt seems as though this is a recurring theme nearly every month. A jump in home prices over the last two months of 22% from last year has certainly caught the attention of both sellers and prospective buyers. Is there a rational explanation for this huge spike in home price gains? Will it continue throughout the remaining months of 2014? After last years appreciation jump, what’s caused the present double-digit bounce?

What’s so different about the present surge in home values compared to last year is the enormous and immediate hike , where as last year there was a much more modest, systematic increase. Heading into this year, most experts predicted some appreciation, with a 3% to 4% prognosis for 2014. These numbers might still hold true for the entire year, but many housing experts are rethinking their original prediction after the huge increases of the first two months. Let’s examine the head-scratcher that has befuddled most of the housing gurus.

Consumer Confidence: This has to be placed at the top because without consumer confidence nothing else matters. Multiple offers have become more commonplace and bidding wars have been cropping up regularly in the most sought-after neighborhoods. Some buyers complain that they are having a hard time securing a purchase, beat out by other bidders, let alone find a bargain. This is strictly consumers feeling confident with their decision to pursue a home.

Lack Of Inventory: Those bidding wars have been created because there’s not enough supply to satisfy the demand. The number of sold properties have decreased year-to-date from 2013 because of the lack of inventory. Those buyers that have lost out to a higher bid are back on the fence, waiting their turn and hoping for another opportunity. This anxiety among buyers, especially those that refuse to lose out a second time have caused many to offer above asking price, which in turn raises home prices.

Interest Rate Increases: The long-term effect with just a slight increase in mortgage rates can add thousands on a 30 year mortgage. Most prognosticators say rates will rise this year and this has created a time is of the essence attitude among home buyers to get it done before that happens. Even if rates rise a bit, there still historically low, comparably speaking. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on selling or buying 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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As a Davis,Ca realtor who deals with Short Sales and have sold many during the last 15 years, I have experienced euphoric highs of successfully completing the Short Sale and a few cases where the bank decided to foreclose. About 30% of the homeowners nationwide that apply for a Short Sale are approved. This percentage is slowly increasing with some pressure from the federal government and many banks now allocating some of the grunt work to outside entities like Equator.

Over the years I have had a few Short Sales in Davis,Ca and the surrounding communities close escrow in as little as 60 days but the majority can take six months or longer. My job as a Short Sale Specialist is the same with any home I market… get it SOLD. That means finding a buyer that will pay fair market value and willing to wait the time it takes for bank approval.

Part of getting a Short Sale to the closing stage is knowing the proper nuances and protocol. Unfortunately, there are many realtors getting involved with Short Sales that are clueless and are putting the seller at a financial risk for their own monetary gain. Here are a few mistakes that I see repeated by some realtors that could prevent the Short Sale from being approved  1) Submitting unsigned offers to the lender 2) Submitting low-ball offers to the lender that has no chance of being accepted 3) Allowing contingencies after the Short Sale approval 4) Not submitting required documentation in a timely fashion.

There are a few realtors that understand the Short Sale puzzle and know how to successfully navigate the waters. Short Sales that have more than one lien holder tend to be more difficult to get done than if there are only one lender involved. When there are multiple lenders, you need approval from both for the sale to take place. There are occasions where the 2nd lien holder has chosen to foreclose instead of granting Short Sale approval.

Here’s the scenario… a home is on the market for $350,000 and has a second for $50,000. The seller is financially unable to keep his mortgage current. A buyer makes an offer at $340,000, which has been determined fair market value. The seller accepts this proposal and the offer is then sent to both lien holders. The first lien holder accepts this offer and the second lien holder is offered a  payoff of $3,000, in order to approve the Short Sale. There are cases where the second will refuse this payoff and the home forecloses. Even though it appears the second will not benefit monetarily, it is still conceivable they could foreclose. The agent should build a relationship with both lien holders at the beginning of the process in hopes of curtailing this possibility.

The above scenario is why it’s imperative you have a Short Sale Specialist that has been challenged and succeeded with the  rigors of Short Sales. There are times when it is too late or virtually impossible to make the Short Sale work but having an expert negotiator on your side improves the odds. Please contact me with any direct inquiries or visit my web site at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home and to view all local area homes for sale.

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A $1 investment in the S&P 500 index at the beginning of 2000, was worth 91 cents ten years later after ” The worst decade in stock market history”. What made the Lost Decade so bad wasn’t just the crash of 2008, but also the dismal years from 2000 through 2002. In order to earn an overall 7% return on stocks for the first 40 years of the 21st century, an investor would have to earn an average 10% return from now through the next three decades.

The other side of the pendulum would be the housing market. I’ll use my area of expertise ( Davis,Ca.) for the illustration. Our average home sales price in the year 2000 was $262,000. The sales price for 2010 was $496,000. Using the stock comparison for every $1 spent on your real estate investment, the return would be $1.89. There are no guarantees with any investment, but even though both markets ( housing & stocks) had declines throughout the last decade, the better investment by far was the real estate investment.

There are even more benefits now with mortgage interest rates at an all time low of 3.94%. How these rates are beneficial over the long haul are magnified by calculating the difference of just a 1% increase to 4.94%. Based on a purchase price of $400,000 with 20% down, you would pay an additional $70,000 over the life of the loan. A 2% increase and you would pay approximately $140,000 more over the loan life. Rest assured rates will go higher.  There’s no better investment than real estate, now and into the future.

” Learn the past, watch the present, and create the future”, a great quote to live by. Please visit my web site at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, check out my other blogs and easy access to view local area homes for sale.

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Should I purchase today or should I wait until prices fall even further. It’s a great question and every situation is unique, though an underlining key point is the amount you’ll pay to borrow money. No one knows positively what the market will do, have we hit bottom or will prices drop another 5 to 10%. if your intentions are to buy now and sell in one to three years, you should be extremely worried about timing but if your looking at holding on to your home for another seven to ten years, you’ll be in great shape.

Let us assume the worse and say you buy a home now at $400,000 and the market drops another 10% or $40,000 in value, that would be considered a paper loss, you haven’t actually loss that money until you sell. Interest rates are being artificially held down with the Government, Treasury or Federal Reserve buying 70% of all mortgages that are financed today. Will these entities continue buying mortgages at that 70% clip, probably not. Interest rates have no place to go but up. The 30 year fixed rate is now at 4%, an historical low, but what happens when those rates increase to 5% or even 6%. Dan Chen at Wells Fargo was kind enough to supply a cost analysis using the $400,000 purchase price.

Purchase price-       $400,000       $400,000       $400,000

Down Payment-             20%                    20%                     20%

Loan Amount-         $320,000       $320,000        $320,000

Interest Rate-                 4%                       5%                        6%

Month/Payment-   $1,527.23       $1,717.83        $1,918.56

The difference over the life of the loan from 4% to 5% would be $68,436

The difference over the life of the loan from 4% to 6% would be an astounding $140,700

Even if the housing prices drop by 10% or $40,000, it does not come close to the monetary increase in interest rates. This scenario is also assuming that we have not hit the bottom in home prices. Home prices in Davis have decreased by about 25% since the peak in 2005, but in the last three years values have slightly decreased, which suggest we might be closer to the bottom and could start seeing appreciation in the next couple of years. The one anomaly that will surely increase will be those historically low interest rates. Please visit my web site at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home and easy access to view all of the local area homes for sale.

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