Category Archives: Real Estate

Nevada County Home & Land Statistics, Real Estate

Market Statistics for Nevada County 2007 vs. 2008

Prices in Nevada County continued in a downward direction during 2008 compared to 2007. The average price for residential homes sold in 2008 was $407,973 compared to $493,261 in 2007. This is a seventeen percent drop in the average home price sold in Nevada County. The average time on the market in 2007 was 98 days compared to 133 days in 2008, taking twenty six percent longer to sell a home. There were 1,481 homes listed in 2007 and 489 of those listings sold. In 2008 there were 1,248 homes listed of which 392 homes sold.

Land sales for 2007 indicated that the average sales price was $222,827. There were 393 listings, of which 95 of the listings sold. In 2008 the average sales price was $203,894. There were 291 listings of which 65 listings sold. Sales prices dropped eight percent in 2008. Days on the market for land went from 122 days in 2007 to 209 days in 2008.

How much longer prices are going to continue to fall is anyone’s guess. You can listen to ten economists and get ten different answers. Although the interest rates are at an all time low, the banks have tightened lending requirements. Unless you have excellent credit and can show a good income stream, it is very hard to get a loan. In talking to a local bank the other day, I was informed that even for an equity loan, you have to have full documents, good credit (In the 700’s FICO score) and so on.

We seem to be doing well in Nevada County compared to other areas. For example here are some nationwide statistics:

The decline in residential property prices appears to be slowing according to preliminary data from First American CoreLogic.

A preview of its November report shows that home prices fell 9.6 percent last month, compared with 10.4 percent in October and 11.2 in September.

“The consistent deceleration over the past two months with November indicating the same trend in price declines is encouraging because it could portend the trough in price declines”, says Mark Fleming chief economist for First American CoreLogic.

Still, layoffs and the swollen supply of unsold homes remain a concern, he notes.

Source: American Banker (12/29/08)

Contact Email John O’Dell
Real estate broker, civil engineer and general contractor

Real Estate

Mortage Rates Drop to 37-Year Low

According to Realty Times ® Freddie Mac today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-mortgage rate (FMR) averaged 5.19 percent this week. This is the lowest FMR that Freddie Mac has recorded since it started keeping records in 1971 or 37 years ago. A year ago, the rate for a 30-year FMR averaged 6.14 percent.

Well that’s the good news. The bad news is in order to qualify for the above rates, according to Donna Knapp of Empire Home Loans, you need to have a FICO score of 740, full documents, that is proof of your income, the assets that you have and a review of your income tax returns. However, if you have all of that,you can get up to 100 percent financing.
The couple were then qualified for a large loan to buy a home beyond their means. With a low starter teaser interest rate, they could manage to hang on the home thinking the price of the home they purchased would go up and when the interest rate increased, they could refinance or sell. However, when the interest rate rolled over to a higher rate, they could not afford the new payment. In the meantime,the value of their home had gone down and they could not refinance. All the couple could do was move out and let the home go into foreclosure.

You may ask why banks ever made stated income loans. These type of loans were designed for self employed people, who’s income is erratic, but in general have good credit and usually are a good credit risk. So,understanding how the system was abused you can also understand how we are in such a financial mess because of the loose loans that were made in the recent past. In summary, the banks did not do due diligent on their part to assure themselves as to whom they were dealing with. Now they have gone to the other extreme, making it hard for most people to get a loan to buy a home with their stifling requirements.

Real Estate

Residential Sales In Nevada County July 2007

Residential sales in Western Nevada County in July 2007 vs. July 2006 fell about 6 percent. In July 2006, 98 homes were sold at an average sale price of $479,969, which was at 96.96 percent of the asking list price of $495,078.

In July 2007, 92 homes were sold at an average sale price of $406,267 which was at 96.37 percent of the asking list price of $421,556. Sales have not really dropped very much, but the average sales price dropped $73,702.

Of course one month does not reflect the true market conditions. Lawrence Yun, NAR senior economist, said “he isn’t looking for any notable changes in sales activity. A modest upturn is projected for existing-home sales toward the end of the year, with broader improvement to include the new-home market by the middle of 2008.”

With increased population growth in California, demand for housing is not going away. New construction has dropped considerably, land is scarce and interest rates are still low. Buyers will have to come into the market place sooner then later. Various reports that I have read expect a yo-yo effect, with nation wide prices dropping 2.3 percent and then rising 2.3 percent next year. Interest rates are expected to be 6.7 percent at the end of the year and ease off to 6.5 percent the beginning of next year. (Source, National Association of Realtors® NAR)

Real Estate

Newspapers Lose Battle for Real Estate Ads

Real estate advertising will become less prevalent in newspapers as it shifts to the Web, where online home buyers are actively searching for properties, analysts say.

Currently about 15 to 20 percent of real estate advertising is online, but Mike Simonton, media industry analyst for Fitch Ratings credit analysis service, says it is poised to go higher for a number of reasons.

Suzy Antal, director of marketing for Prudential Real Estate Affiliates, a unit of Prudential Financial Inc., said many Prudential practitioners have been pulling back on advertising during the current downturn, but as they return, they’re shifting ad budgets to their own Web sites, creating blogs, and taking different approaches beyond newspapers.

“Is newspaper a high priority? No,” Antal says. “I don’t believe my buyers and sellers are going to be in that market.”

Tim Fagan, president the real estate portion of Classified Ventures, which manages website for 125 newspapers, says it plans to “significantly increase’ its investment in Homescape, a real estate-related Web site that provides home listings, but he declined to provide specific numbers.

It’s wrong to assume that online advertising is cheaper than buying space in the paper, says Blanche Evans, editor of Realty Times, a online real estate news service. After all, online users expect extensive color photographs, lengthy descriptions, and even video tours —and all of those features can add up for a real estate practitioner.