Nevada County Real Estate Blog

Nevada County Real Estate Blog - Information & Services

It seems like most everywhere I go people want to talk about real estate! So, I started this real estate blog to inform visitors about the real estate market; prices, trends, happenings - the way I see it.

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Median Price: Fact or Fiction?...or maybe both!

Posted by: rolfk on 03/02/2008 11:54 PM

Yes, prices have come down from stratospheric run ups in 2004 and 2005. But, activity was actually picking up until the liquidity crunch of July 2007 slammed many business' (not just real estate). Since then we have seen continued news on declining real estate prices. Yes there has been some decline, but a very large part of the reason is that money for more expensive homes became very expensive. Loan amounts above $417,000 are called jumbo loans and cost or have interest rates about 1% to 1.5% more than "conventional" loans (those under the $417,00 amount). This fact has slowed the sales figures for more expensive homes. California Association of Realtors has the following to say:

"This most recent decrease in the median price is yet another result of the liquidity crunch, which has choked off sales in recent months for nearly half of California's housing market," said C.A.R. President William E. Brown. "Sales do appear to be edging up, but recent declines in the median price have been due to a lack of sales in the over $500,000 range, where funds are extremely scarce and jumbo loan rates are at near-record margins compared to conforming loan rates."

Real Estate Overview - Facts and Figures

Posted by: rolfk on 01/25/2008 11:18 PM

My good friend Paul Sieving www.PaulSieving.com wrote the following in quite the eloquent fashion:

" The National Real Estate market took some tough shots in 2007, with the median sales price of an existing single family home dropping 1.8%, the first year over year decrease in the 40 year history of the NAR survey. Unit sales volume was off by 13%, the biggest year over year decline since 1982. All that being said, 2007 was the fifth highest year on record for unit sales nationally, and a 1.8% decline in median price after some double digit annual increases from 2000-2005 is relatively mild.

Many regional and local markets had results that were more negative or positive than the national averages, depending for the most part on the particulars of the local economy. Especially hard-hit were urban and suburban markets with an excess of unsold inventory of new homes, such as those in the Central Valley of California, Las Vegas and others with large subdivisions. Some bright spots were also seen, where prices held stable or eked out modest gains, such as the SF Bay Area and Seattle.

In our own Nevada County, the median sales price for an existing single family home in Q4 2007 was $399,000, a 7% decline over the Q4 2006 figure of $430,000, and a 1% increase over the Q3 2007 figure of $395,000. This followed a 5% decline from the peak of the boom, for the previous one year period. Just as gains in our local median price outpaced the national average during the boom of 2000-2005, the declines have been somewhat greater than the national average. The trend over the last few months has been a flattening of the decline and a slight uptrend for the 4th quarter.

With all the recent turmoil in the global financial markets as the greed and excess of the boom years (and some from this week!) is purged from the system, a consensus among analysts for 2008 has been elusive, to say the least. It does appear that the fundamentals are in place for a gradual recovery in the national housing market, and recent trend lines in prices in our local market support this possibility.

The average rate on a 30-year fixed-rate mortgage dropped steeply from the previous week to 5.25% on January 24 2008, according to BankRate.com, while the 15-year fixed rate was at 4.79%. A year ago the 30-year rate was 6.32%. The current rates, which are at 4 year lows and very near to 30 year lows, should have a stimulative effect on home purchases in the near term. Nationally, the inventory of unsold new homes has dropped substantially, as builders have halted new construction and provided major incentives on what is available. Nevada County does not have the issues of excess inventory of new homes that challenges many local markets in the US, and our total inventory has dropped from over 1000 units a few months ago to approximately 700 today.

With historically low interest rates, modest inventory, and prices that appear to have bottomed out and begun to rise very gradually, our local prospects are for a stable market in 2008 and some unusually good bargains for qualified home buyers."

Ten Reasons to Buy Real Estate Now!

Posted by: rolfk on 01/08/2008 05:59 PM

1. Selection is good. Just a few years ago the Western Nevada County resale inventory dropped below 350 single family units. Currently SFR inventory standing at about 700 units down from a high of one year ago at 1100. A buyer was forced to make compromises if they were going to locate the home they could tolerate, let alone the home of their dreams. Comparatively, there is a great selection of properties. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are plenty of options in this market.

2. No Bidding Wars. In 2005 clients would often be out bid for a property. They lose them to the "feeding frenzy" that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. Rarely today will you find competitive bidding in this market (But it does happen when a real deal surfaces).

3. You can make an offer. Today the sell price list vs. price ration is about 97%. A seller will not be insulted if you 'make them an offer they can't refuse'.

4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.

5. Due diligence is welcomed. Buyers are encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers. Good agents often cringed at this practice, and most of us are much happier with this aspect in balance.

6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.

7. Repair requests are not disdained. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.

8. Few, if any” Flippers” are buying. It is estimated that one third of all sales in 2005 were to flippers/investors. These non-owner occupied buyers caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords and/or "flippers". Savvy investors with a longer term investment horizons are out looking for deals, and finding them

9. Location as a choice. Today's buyers can find homes closer to work. In the past buyers flocked to outlying areas in order to find affordable property. In this market, reasonably priced homes are within much closer distance to schools and services.

10. Real financing is available at good rates. The zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers and police officers are back in business. It's a great time to buy real estate!

Pending Sales of Existing U.S. Homes Rose in October

Posted by: rolfk on 12/10/2007 04:11 PM

Bloomberg had the following report:

Dec. 10 (Bloomberg) -- The number of Americans signing contracts to buy previously owned homes unexpectedly rose for a second month in October, suggesting the slump in housing may become less severe.

The National Association of Realtors' index of pending home sales increased 0.6 percent to 87.2, following a revised 1.4 percent gain in September that was higher than previously estimated, the group said today in Washington.

The gains in September and October follow the biggest back- to-back declines since record keeping began in 2001. The Federal Reserve is likely to cut its benchmark interest rate tomorrow because of concern the housing recession and credit crunch will weaken other parts of the economy, economists said.

``I'm not optimistic about the outlook for the housing market, but we're scraping bottom in the fourth quarter,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland, who had forecast a gain. ``We're not likely to see any further collapse at this point.''

Nevada County's market remains solid, with declining inventory, NOT rising. Pending home sales here remain stable, and are on par with last year at this time...in spite of all the "bad news" that we all hear. There are the glimmerings of positive comments in the media now. YOu are begining to hear that there are "good deals" out there. And there are. You can find properties below replacement cost, or essentially at replacement cost with "free" land. Those deals do not last to long, because there is cash to buy. Rates are favorable and look to be going down.

With under 3% of housing stock for sale this is considered a balanced stiuation, neither a buyer's or seller's market. Yet the media has shifted the perception. So, buyers have an opportunity, and sellers will find a buyer.

C.A.R. REPORTS SALES DECREASE 38.9 PERCENT, MEDIAN HOME PRICE FALLS 4.7 PERCENT

Posted by: rolfk on 10/29/2007 04:48 PM

I have taken a break here in writing because It seems all I hear or read about is BAD news. It is not all bad, but saying anything else makes people look at you funny, well funnier than they already look at me. First a word about Nevada County, then the stuff about the rest of California. Western Nevada County inventory of single family residences is about 15% lower than one year ago(and has been declining steadily but slowly for 5 months). Unit sales in this county have held steady for the last 5 months. Fewer people are putting properties on the market and some are withdrawing them because of unrealistic expectations. The "credit crunch" was and is an additional drag on the real estate sector of the economy. This is particularly true in California, where many if not most loans are of the "Jumbo" variety (those loans above $417,000). Overall, there is still an underlying demand for quality homes in this area. NOW is a good time to be in the market as a buyer. There are values to be had, and they will NOT be around all that long. Look for values in the next 12 to 18 months and then be prepared for another round of appreciation, slower and steadier (Best for everyone that way).

Here is what The California Association of Realtors has to say:

Home sales decreased 38.9 percent in September in California compared with the same period a year ago, while the median price of an existing home fell 4.7 percent, C.A.R. reported today.

"While it is typical for the median price to dip seasonally as we move from August to September, this decline -- which was both the largest month-to-month percentage decline on record and the first year-to-year decline in more than 10 years -- was mainly the result of the credit or liquidity crunch, which also drove sales below the 300,000 mark," said C.A.R. President Colleen Badagliacco.

"California's sales fell more steeply than those of the U.S. as a whole because of its heavy reliance on jumbo loans -- those above the conforming loan limit of $417,000," she said. "This speaks to the need to raise the conforming loan limit in higher-cost states like California to more accurately reflect the cost of housing."

Inventory Reduction! Pending Sales UP, Housing Starts DOWN!

Posted by: rolfk on 08/02/2007 05:30 PM

Housing starts across California are down 14% for the month of June (from the previous month) according to the Calfornia Association of Realtors. Builders are reducing their inventories.

Pending sales of existing homes rose by 5 percent in June compared with the previous month, a surprisingly positive sign for the beleaguered housing market acording to the National Association of Realtors.

Reduced Inventories (through slower housing starts and increases sales of existing homes) will ultimatley lead to firmer pricing and fewer incentives. The key word here is ultimately. We are over two years in a slowing/declining market, and like all cycles (up or down) this will reverse,.....ultimately.

Sellers should price realistically, and buyers should shop for fair value. Those that are following this program are moving on with thier lives (the Sellers) and getting the best of the market (the Buyers). Good values are selling!

Long term does anybody really beleive that real estate values will drop significantly as population grows, and new development becomes increasingly difficult (anti growth sentiment) and expensive (so called mitigation fees). Long term, buy all you can and hold it!

Acivity Uptick!?

Posted by: rolfk on 07/17/2007 07:02 PM

There appears to be a slight uptick in activity over the last few weeks. People that are looking have not felt a sense of urgency in making a decision. The common perception appears to be that the property will be there later and possibly at a lower price, and besides maybe something better will come along.

But, those properties that are value priced and/or have good potential are going. Once a potential buyer has lost a couple of opportunities, they might be inclined to act sooner, and that begins to indicate the potential of a market bottom (or maybe not).

In any event the number of available listings is approximatley 3% of the households in Nevada County. Traditionally this has been considered more of a "balanced" market. When inventory falls to less than 1% (the case 2.5 years ago) this becomes a sellers market. Above 4% is generaly a market that would favor buyers.

So, if you are in the market, make decision criteria list and move forward once you find the criteria (or most of them) met.

My regrets are usually for those opprotunities not taken!

NAR FORECAST: HOME SALES, PRICES TO PICK UP IN 2008

Posted by: rolfk on 07/12/2007 10:19 PM

People have been delaying decisions now for almost two years, waiting to see what will happen. At about the two year point, the waiting becomes irritating, and decisions start to be made. So, slowly the people are going to commit to an action. That should be the beginging of a change in pricing direction, undetectable at first. Those looking will start finding that the one they were keeping an eye on is sold. And so a cycle start anew...maybe.

According to the National Association of Realtors:

Lower levels of home-building activity throughout the nation will help existing home sales improve later this year and into 2008, according to NAR's most recent forecast. "Buyers now have an overwhelming advantage given the wide selection of homes available in many markets," said NAR Senior Economist Lawrence Yun. "But with profit margins coming under pressure, home builders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state." Existing-home sales are projected to total 6.11 million in 2007 and 6.37 million in 2008, down from last year's total of 6.48 million.

According to the report, prices also are expected to pick up in 2008 as inventory levels decrease. The median price of an existing single-family home is expected to drop 1.4 percent to $218,800 this year but increase 1.8 percent to $222,700 in 2008.

U.S. HOUSING PERMITS, STARTS FALL IN MAY

Posted by: rolfk on 06/21/2007 05:17 PM

The title above as reported by C.A.R., and the report is at the bottom of this page. But first you have the opportunity to review what I think, or just skip on down a couple of paragraphs..

There is lots of attention being focused on New Housing and construction starts. The VAST majority of real estate transactions are for already built products. In our area, over the last three months, there have been increasing numbers of homes sold (existing inventory) at higher average prices. Please view the graphs on the recent sales page of my web site (click here for Sales Graphs)

Is this the beginning of trend, a reversal of the conventional wisdom, the “tabloid truths”? Maybe, maybe not, but time will tell. Real estate prices will rise again, of that I am certain…the when is the question. If you need a home to live in, then look for the property that most fits your needs and make your decision to take action. Investors should probably wait for confirmation of residential price firming. Commercial property investors should probably move ahead, as in most instances prices are increasing.

C.A.R. reports the following:

The seasonally adjusted annual rate for privately owned housing starts declined to 1.47 million units in May, according to a report released by the U.S. Dept. of Commerce. May's construction pace was down 24.2 percent from a year ago. Single-family housing starts decreased 26 percent from May 2006, to a rate of 1.17 million units, while starts for buildings with five or more units fell 13.1 percent to 271,000. The number of building permits issued, which can be an indicator of future building activity, declined 21.7 percent from one year earlier to a seasonally adjusted annual rate of 1.5 million permits.

PENDING HOME SALES INDICATE STABILIZING MARKET

Posted by: rolfk on 06/07/2007 10:20 PM

Bond yields shot up today (meaning mortagage interest rates), stocks fell, and the economy is good.?? The above title is from the California Association of Realtors and their report is noted below.

Many highly qualified and skilled people in the residential real estate industry are not finding the economy so good. Belt tightening is the norm here. Advertising in down, and some are calling it quits & getting the 9 to 5 job (unlike 24/7 on-call in real estate) out of state, like one good friend (We will miss you!). Personally, I feel like the media has had an easy job talking about the real estate bubble, I mean they had to talk about something. Really though, the market is much closer to normal on an average long term view. The biggest problem is that there are so many more people trying to get a piece of what is now a smaller (though normalized) pie. Fundamental economics; increaing demand, increasing regulation will put UPWARDS PRESSURE on real estate prices. Call me silly, but look for the good deals, they are there and they are SELLING!

CAR says:

While pending home sales continued to edge down this month amidst the subprime fallout, NAR expects activity in the housing market to stabilize in the near-term, according to a recent report. The Association's Pending Home Sales Index (PHSI), a forward-looking indicator that gauges home sales activity for upcoming months, declined for the second consecutive month in April, falling 10.2 percent from a year ago to a reading of 101.4. While a PHSI of 100 or more generally indicates a high level of home sales activity, the April PHSI was the lowest reading in four years. "It looks like we may be leaving a period of market disruptions, and for the past two months the pending home sales index has been similar in year-ago comparisons, which means home sales might ease but should be fairly stable in the months ahead," said NAR Senior Economist Lawrence Yun.

The PHSI declined across the nation in April compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 10.4 percent to 116. In the West, the index fell 11.7 percent to 91.4. The PHSI also declined in the Midwest and Northeast regions, decreasing to 98.1 and 89.3, respectively.

DEMAND FOR REMODELING PROJECTS SLOWS

Posted by: rolfk on 08/24/2006 09:15 PM

An interesting article on remodeling. Mostly because of the referenced statistic that the average age of our housing stock is 32 years old! New roofs, water heaters, heaing units etc. will be necessary. Yet Lowes home inprovement center recently revised their annual profit projection downwards citing real estate slowdowns.

Remodeling activity increased slightly for renter-occupied housing units but declined overall during the second quarter of 2006, according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). The current market conditions index, based on current home additions, alterations and repairs, decreased from 48.1 to 45.6, while the future expectations index, determined by the amount of work committed for the next three months and the backlog of remodeling jobs, slipped from 48.9 to 43.5. Both indexes are measured on a scale of zero to 100, and numbers above 50 indicate improving market conditions. The RMI declined nationwide last quarter, but remained highest in the West, where the current market conditions and future expectations components stood at 49.7 and 50.5, respectively.

As home sales slow, a lower level of remodeling activity is expected; however, changes in the remodeling market tend to be more stable because many home modifications are for maintenance and repair purposes, according to the report. "The average age of the housing stock is 32 years and rising -- well past the time when major home systems need replacement. Supported by more than $11 trillion in homeowner equity, the fundamentals of the remodeling market will remain strong for the foreseeable future," said NAHB Chief Economist David Seiders.

NAR EXPECTS HOME SALES TO REMAIN STEADY FOR REMAINDER OF 2006

Posted by: rolfk on 08/15/2006 05:49 PM

I read a lot of stuff about real estate and "the market". Whatever flavor you ant you will find some credible expert that can support that position, with one exception....Nobody is talking about the next real estate boom. One long term veteran says things will be flat until after the next Presidential Election. Here is what NAR has to say.

The housing market will continue to stabilize through the end of 2006, with U.S. home sales anticipated to reach the third highest levels on record, according to NAR's recent forecast. For the year, existing-home sales in the U.S. are expected to fall 6.5 percent to 6.61 million units, while new-home sales should reach 1.12 million units, down 12.8 percent from 2005. NAR also projects the national median existing-home price to increase 4.3 percent to $229,000 in 2006.

"We've seen a minor easing in closed transactions of existing-home sales, and a slight increase in the leading indicator of pending sales based on contracts," said NAR Chief Economist David Lereah. "New-home sales and housing starts have been fluctuating, so the overall market is stabilizing."

PENDING HOME SALES INDICATE TRANSITIONING MARKET

Posted by: rolfk on 08/03/2006 06:23 PM

National Association of Realtors repaorts:
For the second consecutive month, pending home sales have risen on a month-to-month basis, a sign the housing market is beginning to level out, according to a recent report from NAR. In June, the Pending Home Sales Index (PHSI), which gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed, increased 0.4 percent to 113.9 from the reading one month earlier and edged down 9.6 percent from June 2005. An index of 100 or more generally indicates a high level of home sales activity.

(Nevada County Sales are at about 50% of last years activity, but appear to be stabilized at that level. This level of activity is consistent with the "normal" markets of 2000 and 2001).

"Once again, we have various housing indicators moving in different directions, which itself is an indicator of a market in transition," said NAR Chief Economist David Lereah. "The housing market is striving for balance -- a process that will take several months. A quieting in the movement of indicators should restore confidence to home buyers who've been on the sidelines, waiting for the right time to get into the market, and now is the best time we've seen since the 1990s in terms of housing choices and flexible terms."

The PHSI declined across the nation in June compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it edged down 4.8 percent to 130.7. In the West, the index fell 14.2 percent to 110.1. The PHSI also declined in the Midwest and Northeast regions, falling to 103.3 and 99.4, respectively.

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California Real Estate - Prices Up; Activity Down.

Posted by: rolfk on 07/03/2006 08:02 PM

C.A.R. REPORTS HOME SALES DECREASED 21.1 PERCENT IN MAY;

The median price of an existing single-family home in California increased 8 percent in May and sales decreased 21.1 percent compared with the same period a year ago, C.A.R. recently reported. "This is the first time since November 2001 that the median price did not increase by double digits, reflecting the return to the more balanced market that we have anticipated," said C.A.R. President Vince Malta. "Interest rates, while still historically low, continue to impact sales as did the inventory of homes for sale, which reached nearly a six-month supply in May."

According to the report, the median price of an existing, single-family detached home in California during May 2006 was $564,430, an 8 percent increase over the revised $522,530 median for May 2005. The May 2006 median price increased 0.5 percent compared with April's revised $561,750 median price. Also in May, closed escrow sales of existing, single-family detached homes in California totaled 488,260 at a seasonally adjusted annualized rate, down 21.1 percent compared with the sales pace recorded one year earlier and down 5.6 percent from home resale activity in April.

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Sales this Year (2006) vs. Last (2005)

Posted by: rolfk on 06/17/2006 07:11 PM

Closed single family residential sales (as noted in the Nevada County MLS) for the year (2006) through the month of May is 418 units. The average sales price is $499,250 and the median is $450,000. During the same period in 2005 the number of units sold was 663 with an average price of $458,700 and a median of $409,000.

Prices are holding strong with an average increase over last year of approximately 10% even though the number of transactions is down by 37%. My take on the data is that updated homes are holding value and selling, while homes that show their age are sitting on the market and probably need to be priced to reflect the cost and effort needed to refresh them.

Given the basic utility of 4 walls and a roof, the difference in pricing has to do with the feel and quality of the property and level of interior improvement. Sellers should keep in mind that Buyers are way less likely to overlook dingy paint and that pile of debris, and that they are more likely to look at more properties before making a decision.

USE OF INTERNET BY ALL HOME BUYERS RISES TO 70 PERCENT

Posted by: rolfk on 05/25/2006 02:01 PM

The Internet buyer has become the "typical" home buyer over the last few years, according to C.A.R.'s "2006 Internet Versus Traditional Buyer Survey." Since 2001, the share of home buyers using the Internet as an integral part of the home-buying process has nearly doubled to 70 percent. More than 50 percent of Internet buyers said the information they gathered from the Internet was less useful than that provided by their REALTORS®, and none considered the information gathered from the Internet to be more useful than that obtained from their REALTORS®, according to the report. Additionally, Internet buyers are accustomed to receiving more frequent communication and faster response times from their REALTORS®.

"The Internet is changing the dynamics between buyers and their agents, as well as the way business is conducted throughout the real estate industry. However, while the Internet has become an important research tool for home buyers, it has only enhanced the REALTOR®'s role in the transaction," said C.A.R. President Vince Malta. "Buyers continue to rely on their REALTOR® for help with interpreting the information gathered from the Internet and to guide them through the home-buying process."

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Whats Up?

Posted by: rolfk on 05/13/2006 05:45 PM

Listings are being added pretty darn quickly...

We are at 825 single family residences available in Western Nevada County, average price at $669,200, a 3% increase from 4 days ago. Average price of the 162 propreties in escrow is $555,500, and this number has held constant from 4 days ago.

This does not mean a buyer's market...yet. In 1995 there were 1600+/- homes on the market, with a much smaller population. Of course the average price then was about $150,000. By the way, that WAS a buyer's market.

It is best to lead a market up or, down. Feel free to call me, Rolf Kleinhans, about how to use that strategy to put more money in your pocket quicker.

NATIONAL ASSOCIATION OF REALTORS EXPECTS STRONG HOUSING MARKET TO CONTINUE

Posted by: rolfk on 05/11/2006 08:57 PM

Even in the face of the Fed's relentless pushing of interest rates, the National Association of Realtors has the follwoing to say:

Despite rising mortgage interest rates, NAR anticipates the U.S. housing market to experience its third best year in 2006, according to a recent forecast. "Coming off a prolonged period of record sales, housing is taking something of a breather this year," said NAR Chief Economist David Lereah. "Even so, interest rates remain historically low, we've added about 2 million jobs over the last 12 months, and the economy continues to grow -- that will sustain healthy levels of home sales in 2006, but they'll stay below the peaks experienced during the last two years."

According to the forecast, existing home sales in the U.S. are expected to reach 6.62 million units in 2006, down 6.4 percent from the record 7.08 million set in 2005. Similarly, new home sales are projected to decline 11.6 percent to 1.13 million units.
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MARKET SHARE OF SECOND HOMES NEARS 40 PERCENT

Posted by: rolfk on 04/14/2006 06:22 PM

This is a rather large percentage. The pricing of owner occupied homes is generally "sticky", meaning that people genereally get their price or they do not sell. Second homes and investor properties do not have the same sticky quality to their pricing. Should investors and second home owners not like the costs of owning these properties (think adjustable interest rates) I feel that this is the segment of the market that could drive prices for the whole market.

Second home sales, which include investment and vacation homes, set a record in 2005, climbing 16 percent from the previous year to 3.34 million, according to a recent report by NAR. The market share of second home sales increased from 36 percent of all residential transactions in 2004 to 39.9 percent last year. With the baby boom generation driving second home sales, vacation homes accounted for 12.2 percent of the sales, while investment properties comprised 27.7 percent of residential transactions.

According to the report, vacation homes sales continue to thrive this year, while investment home sales are expected to decline. "Vacation home sales will remain strong for the foreseeable future given the fact that baby boomers are favorably positioned in terms of affordability, as well as being at the stage in life when people are most interested in making that kind of a lifestyle purchase," said NAR Chief Economist David Lereah. "On the other hand, investment home sales are likely to decline this year, in part because of higher interest rates."

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FED RAISES TARGET FOR FEDERAL FUNDS RATE TO 4.75 PERCENT

Posted by: rolfk on 04/02/2006 11:03 PM

Well, they did it again, and the feeling seems to be that they will raise rates yet again. The man on the street is feeling the effects of these rates. Using the median price of a Califonia home and a typical structure of 20% down, the monthly payment has increased by over $600 since the rate increases started. Yes, this does efect the real estate market.

The Federal Reserve's Open Market Committee yesterday raised the target for the federal funds rate by 25 basis points to 4.75 percent, marking the 15th straight increase since June 2004. The federal funds target rate is the interest rate charged by banks when they borrow funds "overnight" from each other.

"As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained," the Fed said in a prepared statement. "Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."

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LEADING INDEX SIGNALS ECONOMIC GROWTH IN THE NEAR TERM

Posted by: rolfk on 03/24/2006 08:10 PM

Growth is generally good for real estate sales, and appreciation. Growth at this time may trigger further interest rate increases, which will (I think) keep real estate transactions to a moderate level. Niether a Buyer's or Seller's market. Read what the experts have to say about economic growth below.

The U.S. leading index, a key barometer of economic conditions, declined 0.2 percent to 139.0 (1996=100) in February after increasing the previous four months, The Conference Board recently reported. Five of the 10 indicators composing the leading index increased last month, including manufacturers' orders for nondefense capital goods, real money supply, average weekly manufacturing hours, manufacturers' orders for consumer goods, and interest rate spread. Despite the decline, the leading index suggests economic growth is "likely to pick up in the near term," according to the report.

The coincident and lagging indices, which reflect current and past economic activity, respectively, increased in February. The coincident index edged up 0.3 percent to 122.1, while the lagging index rose 0.1 percent to 122.6.

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AVM - Automated Valuation Models

Posted by: rolfk on 03/15/2006 07:17 PM

There are an increasing number of "automated valuation models" available to the general public for review. A brand new one is zillow.com.

This seems to have mixed results, as they themseleves say on their site. Automated values rely heavily on average dollars per square foot, and can not, by their very nature take into account the specifics of each unique piece of property. Such things as views, upgrades and remodels are not apparant from closed sales information that is of public record (property tax rolls).

That said, in a more homgeneous environment (tract developments) they have reasonably good expectations of coming close to market values (based on comparable sales). Here in Nevada County where every property is generally unique, this type of model can be very misleading, either up or down. A Homeowner who would use this information for planning purposes could very easily be led astray.

For more accuarte information contact either a Realtor or Licensed Appraiser.

HOMEOWNERS ANTICIPATE FURTHER HOME PRICE APPRECIATION

Posted by: rolfk on 03/09/2006 11:04 PM

Califonia Association of Realtors says the follwoing: Americans believe home prices will continue rising in the coming years, according to a recent "Los Angeles Times"/Bloomberg poll. Nearly 50 percent of respondents believe their home values will increase by 5 to 15 percent in the next three years, while 25 percent expect home prices to rise 16 percent or more over the same period. "I think the 'bubble' talk is hyped," said Diane Harvey of Foster City, Calif., one of the participants in the poll.

Though the majority of respondents showed optimism about future home price growth, the poll revealed some concern about the impact of rising mortgage interest rates on adjustable-rate mortgages. Roughly one in seven respondents have an adjustable-rate mortgage, and more than 25 percent stated they are "not too confident" or "not at all confident" about their ability to make their mortgage payments if adjusted higher.

I need to interject a comment here: I remember that Alan Greenspan (former Chairman of the Federal Reserve Board)not very long ago publicly wondered why people were buying homes with loans at 30 year fixed rates, when on average they sold about every 7 years. He thought that people were paying to much in interest for a percieved level of security, and that due to the low level of adjustable rates that they should strongly consider them. I feel that many took this advice to heart (after all he is one of the smartest guys on the planet when it comes to finance/economics)and for some this could end up being a heartache.

C.A.R. continues to report: The "Los Angeles Times"/Bloomberg poll also found that 16 percent of respondents had tapped into their home equity in the last two years. Completing home improvements, paying off other debts, and buying new cars were among the top uses for the cash obtained.

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PENDING HOME SALES DECLINE FOR FIFTH CONSECUTIVE MONTH.

Posted by: rolfk on 03/09/2006 10:57 PM

I have two quick observations on this topic. The pace of sales is still historically high, and is the slowdown not exactly what the Federal Reserve Board has wanted? They have raised interest rates high enough to dramitcally affect affordablitiy, especially in high home cost locations like California.

The Pending Home Sales Index (PHSI) continued to decline in January, falling for the fifth consecutive month, according to a recent report by NAR. Based on the number of transactions that have signed contracts but are not yet closed, the PHSI gauges home sales activity for upcoming months, as sales typically close within one or two months of contract signing. In January, the PHSI edged down 4.8 percent to 116.3 from the 122.1 reading in January 2005. An index of 100 or more generally indicates a high level of home sales activity.

"This looks like we're touching down for the soft landing we've been expecting," said NAR Chief Economist David Lereah. "We are at a much more sustainable level of home sales now -- a welcome cooling from the super-heated conditions that were driving exceptional price gains."

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'SOFT LANDING' CONTINUES IN CALIFORNIA HOUSING MARKET

Posted by: rolfk on 03/06/2006 10:49 PM

The Califonia Association of Realtors report the following:

The median price of an existing, single-family detached home in California during January 2006 was $551,300, a 13.8 percent increase over the $484,580 median for January 2005, C.A.R. recently reported. The January 2006 median price increased 0.5 percent compared with December's $548,640 median price.

"The California real estate market is beginning to experience the soft landing that we expect to be the underlying dynamic driving the housing market this year," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The number of homes for sale has risen to a six-month supply, which will translate into a slower rate of price appreciation than we experienced in 2005."

Closed escrow sales of existing, single-family detached homes in California totaled 500,470 in January at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 24.1 percent from the 659,410 sales pace recorded in January 2005.
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HOMEBUILDER CONFIDENCE HOLDS STEADY

Posted by: rolfk on 02/19/2006 10:17 PM

The confidence level of the nation's homebuilders remains unchanged for the third consecutive month in February, a sign that the housing market is stabilizing, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). While the HMI declined significantly in the last few months of 2005, it has held steady at 57 since December. An HMI above 50 indicates that more builders view sales conditions as good versus poor.

This month, the HMI component measuring current single-family home sales held firm at 62. The remaining two components of the index, future sales expectations and buyer traffic, each edged down by one point to 65 and 40, respectively. Regionally, builder confidence rebounded in the West, climbing nine points to 74.

The Real Estate Blog

The median home price for sellers who use an agent is 16 percent higher than for sellers who are not represented.

Posted by: rolfk on 01/26/2006 06:19 PM

HOMEBUYERS AND SELLERS RELY ON INTERNET AND AGENTS

Homebuyers who use the Internet to search for homes are more likely to use a real estate agent than non-Internet users, according to the "2005 National Association of REALTORS® Profile of Home Buyers and Sellers." Internet use during the homebuying process has increased significantly over the last 10 years, rising from 2 percent of homebuyers in 1995 to 77 percent last year. Even as technology plays a larger role in real estate transactions, buyers continue to rely on real estate professionals to negotiate the contract and help with paperwork, and 81 percent of Internet users purchased their home through a real estate agent.

According to the report, last year only 13 percent of sellers did not use a real estate agent during their transaction, marking a decline in the number of for-sale-by-owner (FSBO) transactions. Though many FSBOs opt not to use professional assistance to save on commissions, the median home price for sellers who use an agent is 16 percent higher than for sellers who are not represented.

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NEW ETHICAL DUTY TO DISCLOSE NON-CONFIDENTIALITY OF OFFERS

Posted by: rolfk on 01/23/2006 05:27 PM

Beginning January 1, 2006, REALTORS® representing buyers have an ethical duty to advise their clients that sellers may not treat offers as confidential. More specifically, when entering into a buyer agreement, REALTORS® must advise potential clients of "the possibility that sellers or sellers' representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties."

So, in a "hot" market this may be used to play of one buyer against another. Since markets have calmed down this may not be of huge impact. And since buyers are writing the offer, presentation could be conditioned on a confidentiality agreement. For most transactions I do not think this will be a big deal.

CALIFORNIA HOUSING PRODUCTION EXPECTED TO DECLINE IN 2006

Posted by: rolfk on 01/20/2006 06:06 PM

Given that projected demand exceeds new supply, the pressure on home prices should keep prices stable to up, at least that is what I remember from Economics 101!

California's homebuilders will likely construct 185,000 to 205,000 new housing units in 2006, down from the 212,000 units produced each of the last two years, according to a recent housing forecast released by the California Building Industry Association (CBIA). Nearly three-fourths of the housing permits issued are expected to be for single-family homes, while the remaining housing starts will be for apartments and condominiums. According to the forecast, the decrease in housing production is likely to impact the coastal areas of the state.

"The annual demand for new homes in California continues to be in the 240,000 range, but the homebuilding industry is able to provide only 80 percent of the total need," said CBIA Chief Economist Alan Nevin. "The difference represents the inability of the industry to provide moderately priced housing for the first-time homebuyer. The inability relates to the continuing constraints in the developable land supply in the coastal urban cores of the state and the burgeoning extractions demanded by local government."

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Rolf Kleinhans - REALTOR OF THE YEAR 2005

Posted by: rolfk on 01/19/2006 07:15 PM

Thanks very much to all my friends, clients and associates for this big honor. I am so appreciative that you have chosen me for this award. I can not tell you what this means to me!

Thanks again and my best to you all!

PENDING HOME SALES DECLINE FOR THIRD CONSECUTIVE MONTH

Posted by: rolfk on 01/19/2006 07:09 PM

I think some of this is seasonally related. Often in November and December the number of deals does wind down...the "Holiday Effect". The stock market often shows similar decreases in volume during the holiday periods and summer vacation.

The Pending Home Sales Index (PHSI) declined to its lowest level since January 2005, indicating a transition to a more balanced housing market, according to a recent report by NAR. Based on the number of transactions that have signed contracts but are not yet closed, the PHSI gauges home sales activity for upcoming months, as sales typically close within one or two months of contract signing. In November, the PHSI decreased 2.5 percent to 120.6 from the reading one year earlier, and fell 2.5 percent below October's reading of 123.7. An index of 100 or more generally indicates a high level of home sales activity.
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Year End Statistics For California - A Moderate Adjustment

Posted by: rolfk on 12/30/2005 07:52 PM

Well, things are calming down in the sales department. Sales figures remain very strong by historical standards. California remains a very populous state with strong growth (this means continued demand for housing. The market is now entering a balanced phase, neither a seller's market nor a buyer's market. Rates should stabilize at historically very attractive rates....and homeownership remains a strong part of the American Dream.

Happy New Year to all my clients, friends and readers! Be well and be safe!

C.A.R. REPORTS SALES DECREASE 11.2 PERCENT IN NOVEMBER
The median price of an existing home in California in November increased 16.2 percent and sales decreased 11.2 percent compared with the same period a year ago, C.A.R. recently reported. The median price of an existing, single-family detached home in California during November 2005 was $548,400, 16.2 percent above the $471,980 median for November 2004 and 1.8 percent higher than October's $538,770 median price.
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HOUSING STARTS DECLINE IN THE GOLDEN STATE
Construction of new homes in California decreased during November 2005, falling 23.6 percent when compared with the same period one year earlier, the California Building Industry Association (CBIA) recently reported. As measured by building permits, 14,021 new housing units were started throughout the state last month, with single-family units accounting for 67.1 percent of the starts. According to the report, single-family construction was the strongest in the Riverside-San Bernardino-Ontario, Sacramento-Arden-Roseville and Los Angeles-Long Beach-Glendale regions.
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FED RAISES TARGET FOR FEDERAL FUNDS RATE TO 4.25 PERCENT

Posted by: rolfk on 12/14/2005 10:10 PM

They have done it again...raising interest rates means EVEYBODY NEEDS TO CHARGE MORE. Seems like this will continue the very thing the Fed says the are afraid of. Perhaps observing what the raises are doing over the next 6 months or so might be prudent.

The Federal Reserve's Open Market Committee raised the target for the federal funds rate by 25 basis points to 4.25 percent this week, marking the 13th straight increase since June 2004. The federal funds target rate is the interest rate charged by banks when they borrow funds "overnight" from each other
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REVISED CONFORMING LOAN LIMITS FALL SHORT

Posted by: rolfk on 12/02/2005 10:37 PM

More than 28,590 families in California will be able to benefit from Fannie Mae's and Freddie Mac's recent announcements that each will increase its single-family mortgage loan limit from $359,650 to $417,000 in 2006, according to an analysis by C.A.R.

"While this is good news for many homebuyers, Fannie Mae's and Freddie Mac's new loan limits do not go far enough to benefit most homebuyers in California," said C.A.R. President Vince Malta. "Conforming loan limits need to more accurately reflect the cost of housing in California, where the median price of a home is more than double that of the nation."

The current median home price in California is $538,770, more than 29 percent higher than the national conforming loan limit of $417,000. In addition, California has 19 counties with a median home price above the national conforming loan limit.

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BUILDER CONFIDENCE DECLINES TO 42-MONTH LOW

Posted by: rolfk on 11/26/2005 06:13 PM

California Association of Realtors Reports:

Lower consumer confidence, rising interest rates and affordability issues all contributed to a decline in the confidence level of the nation's homebuilders this month, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Following October's reading of 68, the seasonally adjusted HMI decreased eight points to 60 in November. While an HMI above 50 indicates that more builders view sales conditions as good versus poor, the HMI has not stood as low as 60 since May 2003.

All three of the HMI's components declined in November. The component measuring sales expectations for the coming months fell nine points to 64, while the confidence gauge for current sales activity decreased eight points to 66. The index assessing the traffic of prospective buyers dropped five points to 46. Regionally, the HMI remains the highest in the West, where the index stands at 78.
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REALTORS® SUPPORT STATE EFFORTS TO RESTRICT USE OF EMINENT DOMAIN

Posted by: rolfk on 11/11/2005 05:46 PM

REALTORS® expressed their support of state governments' rights to form their own laws regarding eminent domain at a recent forum on land use, property rights and the environment at NAR's 2005 REALTORS® Conference & Expo in San Francisco. The discussion follows the recent Supreme Court decision in Kelo v City of New London that allowed a local government to seize private property to promote the city's economic development. Nearly 70 percent of REALTORS® feel that each state should have the power to make its own laws about eminent domain, while 30 percent feel that Congress should establish standards for the proper use of eminent domain, according to a recent member survey conducted by NAR.

"Protecting the right of citizens to be secure in their ownership of property is a core value of REALTORS®," said NAR President Al Mansell. "Private property rights are the cornerstone of the real estate industry and a key principle of the social contract upon which our democratic system of government relies for legitimacy. Any erosion of private property rights is cause for serious alarm."

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TAX REFORM PANEL PROPOSES REDUCTION OF MORTGAGE INTEREST DEDUCTIBILITY

Posted by: rolfk on 10/21/2005 10:27 PM

This will really affect everybody if it goes through. The final effect will be to reduce all home values. Individuals and banks will be negativley influenced, both economically and as a society.

By Nov. 1, the President's Advisory Panel on Tax Reform (http://www.taxreformpanel.gov) will publish its recommendations on how to reform the federal tax code. Its mission from President Bush's Executive Order calls for the panel to find a way to make the tax code "simpler, fairer, and more pro-growth to benefit all Americans," while staying revenue neutral. The panel has been holding public meetings since Feb. 16, and held its final meeting yesterday. Alternatives to the current income tax system that the panel has discussed include a value-added tax (VAT), flat tax, and hybrids of different tax systems.

As with any revenue neutral legislation, the elimination of a revenue stream or the lowering of a tax rate must be offset by the elimination of deductions and/or increase in tax rates in another area. Members of the panel have suggested reforming portions of the tax code that would negatively impact homeownership and the housing market. These include: reducing the mortgage interest deduction (homeowners currently can deduct all the interest on mortgage loans up to $1 million) and eliminating deductions for the interest on home equity loans.

C.A.R. believes that reducing the mortgage interest deduction and radically changing areas of the tax code that promote homeownership would be detrimental not only to California's housing market, but to housing nationwide. In addition, such suggestions go against President Bush's original intent of protecting and promoting homeownership. C.A.R. will continue to monitor the panel and will respond appropriately once the final report is issued.

PENDING HOME SALES REACH RECORD LEVEL

Posted by: rolfk on 10/06/2005 08:22 PM

California Association of Realtors reports the following:

Following a slight decline in July, the Pending Home Sales Index (PHSI) has reached its highest reading since October 2004, according to a recent report by NAR. Based on the number of transactions that have signed contracts but are not yet closed, the PHSI gauges home sales activity for upcoming months, as sales typically close within one or two months of contract signing. In August, the PHSI increased 3.2 percent above July's revised reading of 125.5 to 129.5 and stood 4.7 percent higher than the PHSI one year earlier. An index of 100 or more generally indicates a high level of home sales activity.

On a regional basis, the South led the nation with the highest PHSI at 142.1, a 7.6 percent increase above August 2004. The West and Midwest regions also experienced annual increases, posting indices of 136.7 and 119.4, respectively. The Northeast index fell 2.2 percent from one year ago and now stands at 108.

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Everybody was in the path of Hurricane Katrina!

Posted by: rolfk on 09/12/2005 02:19 PM

Costs for everybody will be going up. Replacement, repair, insurance, distribution you name it and there is or will be some relationship to the storm. Most insurance companies have not factored in the changing weather and its impacts...but they will now. Please click below for an in-depth review by realtytimes.com.

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Katrina's Destruction Will Likely Slow Economic Growth In Fourth Quarter

Posted by: rolfk on 09/09/2005 12:44 PM

"We expect that near-term growth will now be a bit weaker than had been anticipated, due in very large part to the disruption in economic activity brought on by Katrina last week," said Frank Nothaft, vice president and chief economist at Freddie Mac. "However, the federal monies that will flow into the damaged areas and the lower interest rates brought on by the disaster will stimulate economic growth next year, making up for the slowdown in the last part of this year."

"Reconstruction efforts are going to place upward pressure on construction material, and this could add another two percent to three percent to new home costs in the coming months, but should be balanced out by slightly lower mortgage rates."

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PENDING HOME SALES DECLINE - Market Still Strong But......?

Posted by: rolfk on 09/08/2005 03:29 PM

While the Pending Home Sales Index (PHSI) hit its fifth highest reading on record in July, pending home sales have declined slightly, according to a recent report by NAR. Based on the number of transactions that have signed contracts but are not yet closed, the PHSI gauges home sales activity for upcoming months, as sales typically close within one or two months of contract signing. In July, the PHSI fell 1 percent below June's revised reading of 126.4 to 125.1 and stood 3.5 percent higher than the PHSI one year earlier. An index of 100 or more generally indicates a high level of home sales activity.

On a regional basis, the South led the nation with the highest PHSI at 139.2, an 8.3 percent increase above July 2004. Pending home sales also increased in the West, where the index rose 4.7 percent to 127.5. In the Midwest and Northeast regions, the PHSI declined to 113.6 and 109.0, respectively.

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California Most Popular Places People Would Choose to Live, If they could afford it!

Posted by: rolfk on 08/18/2005 11:00 AM

According to a Harris Poll on States and Cities in the U.S:

Maybe it is the sandy beaches or perhaps the warm weather, but California, Florida and Hawaii are respectively the #1, #2, and #3 states that U.S. adults would choose to live in if they could live in any state in the country. And when it comes to Americans’ choices for cities, while the West may again be overrepresented, the ‘Big Apple’, New York City, comes in #1 for the sixth consecutive time as the U.S. city people would choose to live in or near.

These are some of the results of a nationwide Harris Poll of 2,339 U.S. adults conducted online by Harris Interactive® between July 12 and 18, 2005.

The next most popular states in which people would like to live are Colorado (#4), New York (#5), Arizona (#6), Oregon (#7), Texas (#8), North Carolina (#9), and Tennessee (#10). Since Harris Interactive last asked this question in 2003, there has been surprisingly little change in the top 15 states. Oregon moves from #11 to #7, Virginia drops from #9 to #12 and Tennessee re-enters the top 15 after falling out of the top tier in 2003.

One interesting thing to note is that eight of the 15 states are in the West and six of them are in the South. New York is the anomaly, representing the mid-Atlantic region, and there are no states from the Midwest or Northeast in the top 15.

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Sign here to acknowledge the value of the home you bought could drop!

Posted by: rolfk on 08/06/2005 05:13 PM

In October 2004, the California Association of Realtors announced the release of a new disclosure form, the "Market Conditions Advisory," which states, "In light of the real estate market's cyclical nature it is important that buyers understand the potential for little or no appreciation in value, or the actual loss in value, of the property they purchase."

The form also states that it is "impossible to predict future market conditions with exact accuracy," and describes "hot" versus "cool" real estate markets. Many real estate markets in California have not experienced a cooling trend in the past 10 years. "In a less competitive or 'cool' market there are generally more sellers than buyers," the form states, "often causing real estate prices to level off or drop, sometimes precipitously."

The form also states that in a "hot" market, "some buyers may offer more than originally planned or eliminate certain contingencies in their offers." Buyers are responsible for determining a price to offer on a property, and "If your offer is accepted, you may have 'buyer's remorse' that you paid too much,'" the form states.

Real estate markets are just like other markets...they have cycles. One difference between real estate and stocks though is the inherent usability of real estate: you can live in it or rent it out. This tends to give greater stickiness to pricing...especially for owner occupied units.

CALIFORNIA HOUSEHOLDS FALL SHORT IN INCOME NEEDED TO PURCHASE HOME

Posted by: rolfk on 08/04/2005 12:55 PM

With a median household income of $53,840, California households are $70,480 short of the $124,320 qualifying income needed to purchase a median-priced, single-family home at $530,430 in California, according to the C.A.R. Homebuyer Income Gap Index™ (HIGI) report for the second quarter of 2005. The HIGI™ for California increased 28.3 percent during the second quarter of 2005 compared with the second quarter of 2004.

According to the report, potential homebuyers in the Central Valley had the smallest income gap at $39,450, while the San Francisco Bay Area had the highest gap in the state at $102,230. In Southern California, potential homebuyers are $67,220 short of the $119,530 qualifying income needed to purchase a median-priced, single-family home at $510,000.

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The affordability gap remains a significant issue in my opinion. As prices rise (or remain at current levels)who will buy your property? Fewer people capable of buying does have a direct relation to selling your property. I also feel there are some significant social costs as well: people that own property treat it a lot better than a rental.

C.A.R. REPORTS MEDIAN HOME PRICE INCREASED 16 PERCENT IN JUNE

Posted by: rolfk on 07/28/2005 01:05 PM

The median price of an existing, single-family detached home in California during June 2005 was $542,720, a 16 percent increase over the revised $468,050 median for June 2004, C.A.R. recently reported. The June 2005 median price increased 3.8 percent compared with May's revised $522,900 median price.

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It seems that demand continues to remain strong with limited supply. Here in Nevada County we had a brief uptick in supply last month and that is now coming down a little bit. Properties in escrow are slightly up as well. Buyers are still very discriminating.

Rates and Inventories are Up.

Posted by: rolfk on 07/19/2005 12:59 PM

Mortgage interst rates have increased in view of Fed's actions. Rates have increased about .06% in the last week. Read Bankrate.com's 7/14/05 report on interest rates; More Info

Here in Nevada County, Residential inventory is up about 20% over the last two months. Some of the increase is due to typical seasonal increases and some to a softening. Properties in escrow have decreased by 20% over the same time frame.

Demand for quality properties realistically priced is still strong. Pay attention to comparable Sales and NOT asking prices, and you will sell your property.

Housing boom's side effect: rising property taxes

Posted by: rolfk on 07/10/2005 05:46 PM

An excerpt from Associated Press;

The national average annual property tax collection was $971 per person in 2002-2003, up 18 percent from $822 five years earlier, according to the latest figures available from the Tax Foundation, a research organization in Washington. The median home price nationwide rose to $170,000 in 2003 from $128,400 in 1998, according to the National Association of Realtors.

While rising property taxes in theory should slow down the real estate market, that hasn't happened for two key reasons: "The popular belief that real estate is the best investment and the American willingness to spend a remarkably high fraction of their disposable income on housing," said foundation spokesman Bill Ahern.

Governments still are sensitive to complaints from homeowners. At least 48 states have tried to give homeowners relief from rising property taxes, according to the National Conference of State Legislatures. The methods include tax freezes, restricting property taxes to a percentage of the home's market value and caps on how much a home's assessed value can increase. Many states are considering expanding property-tax relief.

But local governments also are wary of cutting back on what they collect. They get more than 95 percent of all property taxes. Altogether, American businesses and homeowners paid $296.7 billion in property taxes in 2002-2003, up from $279.1 billion in 2001-2002, according to the latest data from the U.S. Census Bureau. Those numbers likely climbed even faster recently along with record-high home prices.

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NINE CALIFORNIA CITIES AMONG NATION'S FASTEST GROWING

Posted by: rolfk on 07/07/2005 01:10 PM

C.A.R. reports that nine cities in the Golden State rank among the top 20 cities with the fastest growth rates in the nation, according to a recent report by the U.S. Census Bureau. Port St. Lucie, Fla., led the nation with a 12.0 percent population increase between July 2003 and July 2004, while Elk Grove, Calif., followed with the second largest increase of 10.6 percent during the same period. Other California cities listed in the top 20 include Moreno Valley (6), Rancho Cucamonga (9), Roseville (10), Fontana (12), Bakersfield (13), Irvine (15), Visalia (16) and Chula Vista (20).

California also is home to three of the nation's largest cities, according to the Census Bureau's report. With 3.8 million residents, Los Angeles remains the nation's second most populous city, while San Diego and San Jose rank seventh and 10th, respectively.

OK, with continued growth like that, I feel there is an implied demand for housing. Demand tends to mean prices are stable to increasing.

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Cities can Seize Homes, Supreme Court Rules!

Posted by: rolfk on 06/26/2005 11:23 AM

Local governments can seize individuals' homes and businesses against their will to make way for shopping malls, office buildings and other private economic development, the U.S. Supreme Court ruled today in a split decision.

In the widely watched case, Kelo v. City of New London, property owners challenged the government's use of eminent domain to pay for private property that would be used for private economic development.
In a 5-4 ruling, the court said government agencies can take private property for economic development, and even transfer it to another private party.

WOW! This does not really do much for private property rights. It is to easy to see where a determined (and wealthy) development company could easily trample on the smaller property owners. This seems very scary to me....and I believe in managed growth and development too!

UCLA Report Says Housing Market at Risk.

Posted by: rolfk on 06/23/2005 04:30 PM

A prominent economic forecast released today stepped up warnings that the housing market is overheated and due for a correction.

The University of California Los Angeles Anderson Forecast, which has been bearish on the housing market for a couple of years, warned that the market is at risk, largely because of the breakneck pace of price gains.

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OK, These are a lot of smart people, and I even got my M.B.A. from the UCLA Anderson School Of Managment. But! Demand does remain strong and unless the employment market changes drastically there should remain a good level of demand. Demand usually means that prices should remain steady if not increase (Econ 101, also UCLA). That said, 20% annual increases are not sustainable in anything for any length of time. I do feel a slowdown of appreciation is inevitable, and that one must be careful of overleveraging.

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