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    2010MktFcst Folsom

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    jimsacto
    The document analyzes the 2010 real estate market in four California counties. It finds that while job growth is expected, unemployment remains high. Buyers value responsive agents with market knowledge who can help negotiate. Housing inventory has stabilized but prices continue rising slowly. Most foreclosures are under $300,000. Short sales will increase in the $300,000-$600,000 range and not peak until 2014. The market for homes under $300,000 is expected to appreciate 3-5% while above $600,000 will see more pressure to reduce prices. The real estate industry will remain busy but agents need to aggressively pursue short sales to maximize transaction volume.

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    2010MktFcst Folsom

    Uploaded by

    jimsacto
    28 views21 pages
    The document analyzes the 2010 real estate market in four California counties. It finds that while job growth is expected, unemployment remains high. Buyers value responsive agents with market knowledge who can help negotiate. Housing inventory has stabilized but prices continue rising slowly. Most foreclosures are under $300,000. Short sales will increase in the $300,000-$600,000 range and not peak until 2014. The market for homes under $300,000 is expected to appreciate 3-5% while above $600,000 will see more pressure to reduce prices. The real estate industry will remain busy but agents need to aggressively pursue short sales to maximize transaction volume.

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    2010MktFcst_Folsom[1]

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    The document analyzes the 2010 real estate market in four California counties. It finds that while job growth is expected, unemployment remains high. Buyers value responsive agents with market knowledge who can help negotiate. Housing inventory has stabilized but prices continue rising slowly. Most foreclosures are under $300,000. Short sales will increase in the $300,000-$600,000 range and not peak until 2014. The market for homes under $300,000 is expected to appreciate 3-5% while above $600,000 will see more pressure to reduce prices. The real estate industry will remain busy but agents need to aggressively pursue short sales to maximize transaction volume.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views21 pages

    2010MktFcst Folsom

    Uploaded by

    jimsacto
    The document analyzes the 2010 real estate market in four California counties. It finds that while job growth is expected, unemployment remains high. Buyers value responsive agents with market knowledge who can help negotiate. Housing inventory has stabilized but prices continue rising slowly. Most foreclosures are under $300,000. Short sales will increase in the $300,000-$600,000 range and not peak until 2014. The market for homes under $300,000 is expected to appreciate 3-5% while above $600,000 will see more pressure to reduce prices. The real estate industry will remain busy but agents need to aggressively pursue short sales to maximize transaction volume.

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    2010 Market

    Analysis
    Sacramento, Placer, El Dorado
    and Yolo Counties
    What will it be like in 2010
    • Year of great Ambiguity

    • 2.5 million new jobs expected this year,


    but we have lost 7 million net jobs in the
    last two years. If true it will do more to
    turn around the Residential and
    Commercial markets than any thing else

    • Americans are saturated in debt and


    nervous about job prospects

    • Few economists expect a double-dip


    recession
    What Buyers value most

    • Reputable and Fair agents


    • Agents must be immediate and
    responsive to buyer needs
    • Guides to educate them to process
    • Reports that demonstrate market
    knowledge (TrendSend)
    • Information to help buyer negotiate
    (TrendSend and local knowledge)
    • Simple and clear communication
    4 county 5 year
    Supply and Demand
    • 2.9 months
    Aug ’05 supply
    Peak Inventory
    • bifurcated
    Market

    • Inventory
    Pended Sales
    stabilization
    is over

    Closed Sales
    4 county 5 year
    Price per Square foot
    • 131/sq ft

    • 7%
    131/sq ft increase
    258/sq ft
    Aug ‘05
    • On the rise
    123/sq ft since
    February
    total gain
    51% decrease in values below
    since August of 2005 300,000
    4 county 5 year
    Avg. list vs. Avg. Sold
    606,000 • 384,000
    avg. List

    384,000 • Avg. Sold


    242,000
    466,000
    Aug ‘05 • 27,000
    242,000 increase
    215,000
    in avg.
    Sold in
    last year
    Option A.R.M.s
    • Government
    has
    manipulated
    market

    • We still
    need to deal
    with it

    • next two
    years?
    4 county 4 county
    Bank Owned Short sales
    REO
    Inventory
    Growing Short Sales
    Started
    Aug ‘06 Aug ‘07

    5 years

    • 4 county REO 4 county short sales


    inventory = 1,149 inventory = 1,778
    19% of total inventory 29% of total inventory
    4 county Bank Owned
    $0 to 300,000 $300k to 600k

    Not enough ?
    Inventory
    For demand

    84% of Foreclosures 15 % of Foreclosures


    sold are under sold are between
    $ 300,0000 300,000 to 600,000
    4 county Bank Owned
    $600,000 and up

    1% of Foreclosures sold are over


    $600,000 this may double or triple
    Sacramento County
    Defaults Bank Owned

    • 6253 defaults, Sacramento 3342 REOs


    500 shown 500 shown
    Placer County
    Defaults Bank Owned

    • 1507 defaults, Placer 682 REOs


    500 shown 500 shown
    El Dorado County
    Defaults Bank Owned
    Cameron Park Cameron Park
    El Dorado Hills El Dorado Hills

    • 715 defaults, El Dorado 415 REOs


    •500 shown
    Yolo County
    Defaults Bank Owned
    Woodland Woodland

    West Sac. Davis West Sac.


    Davis

    • 412 defaults, Yolo 278 REOs


    Bottom Line
    • It will be much easier and faster to do short
    sales in lower price ranges

    • Expect a lot more foreclosures above $300,000


    to avoid deficiency judgments

    • Once incentive programs end expect interest


    rates to rise from late spring to end of year by
    at least one percentage point. Now 5.5 %
    likely to rise to 6.6% by Late April. This has to
    happen if we are to attract Bond funds to
    invest in mortgage backed securities.
    • Commercial Markets hard hit by lack of
    financing, two years of bad news.
    Bottom Line
    • For the Bank short sales are cheaper by at least
    10% but not for the consumer who has other
    assets. They will face deficiency judgments.

    • Short sale volumes will increase in the


    $300,000 to $600,000 range and will not peak
    till 2014. Since there are fewer investors in this
    price range prices are likely to fall in 2010.
    Bottom Line

    • I feel positive about the market


    continuing to appreciate for homes priced
    under $300,000.

    • Expect to see 3% in outlying areas and


    up to 5% near jobs. Investors will make
    up 30% of the buyers . Insuring the
    inventory is absorbed.
    Bottom Line
    • Cottage industry created to manage and repair
    and enhance bank assets to mitigate further
    loss and or gain some of that lost equity.

    • We will see a lot more REO’s in the above


    $600,000 range and there will be a lot of
    pressure to reduce prices the further away from
    the job markets you are. Short sales in the
    upper end are only for those with out any other
    assets. The upper end is in for a bumpy 4 years.
    Bottom Line

    • There will be lots of business for us, but our


    agents need to aggressively pursue short sales.
    Volume of transactions is the key to success.

    • As to the Economy;
    Job creation is the only way to end this
    mess.

    • Questions ?
    The End
    Michael Lyon
    CEO
    Lyon Real Estate
    Some edits by Jeff Werolin, not the CEO
    of Lyon Real Estate
    Auburn
    Defaults Bank Owned

    Auburn Auburn
    145 defaults 79 REOs

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