Housing market improving
The local housing market “is turning the corner,” according to local and national housing experts.
“The good news is the housing market in Placer County is getting better,” Gloria Doze of Placer County Association of Realtors told South Placer Chambers of Commerce members Dec. 6 at Thunder Valley Casino.
She was speaking at the governmental affairs quarterly meeting that is attended by representatives from the Lincoln, Rocklin, Roseville and Auburn chambers of commerce.
Buyers “are lining up to outbid one another to purchase the few homes up for sale in Lincoln and Placer County,” according to Doze.
“The bottom is coming off,” Doze said. “The inventory is very low, the foreclosure rate is low. There is still a substantial short sales market. People have transferred or lost jobs. It used to be we’d put up a listing and it would take weeks or months but that has changed. Banks are friendlier. They are processing loans faster. Homes are going quickly.
Doze said there are multiple offers on homes selling in the $150,000 to $200,000 range.
“There are up to 20 offers on one property,” Doze said. “Buyers are bidding anywhere from $5,000 to $40,000 over the asking price.”
The housing inventory in Placer County one year ago was 1,400 homes. That number is now 450 homes.
In Lincoln, 108 homes were on the market, as of Nov. 30. Last year, at the same date, the number of homes for sale was 203.
“We are getting five to 15 offers on every house that comes on the market,” said Century 21 Select Realtor and broker Rick Bluhm, who has worked in the real estate market for 35 years, specifically in Lincoln for the past nine years.
The median price for a home in Lincoln in November 2012 was $296,000. For November 2011, the median price was $225,000.
“I don’t see the inventory growing dramatically in 2013,” Bluhm said. “It will grow a little but not a lot.”
Bluhm said he anticipates the prices may increase, “at the most,” about 3 to 5 percent in 2013.
“I don’t see foreclosures increasing,” Bluhm said of the Lincoln market. “I think they will stay where they are or drop.”
The number of bank-owned homes for sale in Lincoln was nine in November. In November 2011, 31 bank-owned homes were on the market.
Bluhm said short sales will remain at the same level.
Eighteen homes were on the short sales list for November 2012. In November 2011, 66 homes were listed as short sale.
“It seems the banks have finally realized they can make more money on short sales than foreclosures,” Bluhm said.
Processing a loan for some short sales “may be moving a little quicker,” due to new guidelines from federal mortgage purchasers Fannie Mae and Freddie Mac that went into effect Nov. 1, said Krista Shonk, vice president of mortgage finance and senior regulatory counsel for the American Bankers Association. To view the new guidelines, visit http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1216.pdf.
Fannie Mae stands for the Federal National Mortgage Association. Freddie Mac is formally known as the Federal Home Loan Mortgage Association.
“One of their goals is to make short sales more efficient,” Shonk said, “and to obtain a faster decision from investors.”
Shonk said the new guidelines do not apply to loans owned by other banks or investors.
Doze said the interest rate is attractive for buyers.
“The interest rate is under 4 percent,” Doze said. “People want to buy homes. But qualifying to buy a home is tougher and, in January, FHA (Federal Housing Administration) guidelines are changing.”
An article outlining the new guidelines is available on the Federal Housing Administration’s website. Visit http://www.fha.com/fha_article.cfm?id=216.
Permits to build residential units here on the rise
The amount of permits to build residential units in the city of Lincoln is increasing. The city issued 92 permits for single family homes in calendar year 2011 and 206 permits so far for calendar year 2012.
No permits have been issued for multifamily homes since 2008, according to Gwen Scanlon, the city of Lincoln’s development services’ office supervisor.
An increase in the amount of building permits pulled is one of the indicators the National Association of Homebuilders looks at to determine if a metropolitan market is placed on its list of Improving Markets Index. The other indicators are housing prices and employment.
The Sacramento metropolitan market is among 201 markets considered improving in December.
That market includes Placer, Sacramento, El Dorado, Yolo, Sutter and Yuba counties. A market must be growing in all three categories for six months to make the index.
“If a housing market stays above that level for six months, it’s a good indicator the housing market is on the road to recovery,” said Robert Denk, senior economist for the National Association of Homebuilders. “Some of the hardest hit states like California and Florida are getting back on their feet.”
When National Association of Homebuilders first started tracking markets in September 2011, Denk said, only 12 of 361 markets were considered improving. Now, 201 have passed all three tests. The Sacramento metro market was first placed on the list in September 2012.
Denk said employment in the Sacramento metro market bottomed out in July 2011.
As of October, employment was 2.8 percent higher than when it hit the bottom, according to Bureau of Labor payroll employment statistics.
Home prices bottom out in October 2011. Prices are now 8.1 percent higher than when they hit the bottom, according to Freddie Mac’s housing price index.
Based on the Census Bureau’s single family homes building permit count, the number of permits was lowest in June 2011 and has been growing at an average annual rate of 7.4 percent.
“What we found was the big picture about how the housing market was doing nationwide did not reflect local housing markets,” Denk said. “The national average may not be a good indicator of how the Sacramento metro market is doing.”
Denk said there is still plenty of room to grow.
“These markets are on the right track,” Denk said. “They have improved but they are not completely recovered.”