Steve, we're booming? that's amazing. I've seen houses for sale for weeks that don't seem to show any sign of interest. Where are most of the purchases going on? Neighborhood? Price range? And why aren't those sales boosting up the zillow appraisals?
Booming is relative. Is it crazy busy like it was 6 or 7 years ago with people 20% equity gains? No. Are people coming off the fence and buying properties? Heck yes!
Let's look at some numbers. May sales figures will be adjusted as some agents report sales a little late, so these may change:
There are 464 homes listed on MLS in Folsom right now. Of those, 117 are 'pending sale' meaning they have agreement with buyer and seller and are scheduled to close. 136 are 'short-contingent' meaning that they are short-sales, the buyer and seller have agreed on price, and they are waiting for approval from the bank for approval of the short-payoff (not all will close). That means that 54% of the homes on the market have accepted offers.
Average days on market is at 59 for traditional sale, 74 for bank-owned and 161 for short-sale. At these rates, we now have a 3 month supply of inventory. Most 'experts' say 5 to 6 months is a normal or healthy market.
Just because you don't see anyone going into a property that's for sale, does not mean there's no interest. With tighter financing regulations, it can take longer to close (45 days is common), and of course with short-sales, even longer.
Of the 85 sales reported for May so far, 25 sold for more than listed price and another 12 sold at listed price.
Pendings are up, sales are up and inventory is down.
I've had many conversations with Steve about this, and I'm sure he can explain it better. From my hunt, the majority of the homes are short sale. Sometimes the list price is not the bank approved list price, so once an offer is made, there is a coordination of loans between the various banks. It can take awhile for the banks to agree on a price, or a payoff. Apparently, people were making multiple offers, and then waiting for the best agreement, then dumping the other homes back on the market (hence "buyer walked" notations). Now, the bank is requiring a 1% downpayment on the price offered. Eventually, if the home doesn't sale, it goes into foreclosure, a flipper will come in, spruce it up & then bump the price up significantly. That is why, in my understanding, why these homes sit & sit. And I sit & sit...
Oh, if I see a house I like, I finally figured out that I have to immediately jump if I want to have any chance of getting my offer in.
Evidence of booming, people are offering more than the list price, and putting down huge downpayments. A condo I didn't jump on, received an offer at 10,000 more than list with a 50% deposit....that's $120,000 deposit.....
You've got it down pretty well. The deposit requirement, however, is a seller requirement rather than a bank one. Sellers and agents are getting tired of frivolous offers, so many (including me) are asking buyers to put their deposit in escrow upon offer acceptance by the seller, rather than waiting for bank approval on the short-sale. This eliminates the people who are putting out multiple offers to see what sticks, as they aren't the types who want to tie up their money on a property they may not buy.
that's interesting. it doesn't sound like a boom to me. more like a buyer strategy for getting the best deal possible on whatever house they end up with. what a world, what a world! good luck with your sale, by the way! we had a non-foreclosure/non-bank sale house sell in our neighborhood in less than 24 hours (for far less than it was worth. another that is apparently bank owned has been sitting there for months.
As mentioned above, the multiple offer strategy is being curtailed by deposit requirements.
