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REAL ESTATE ANALYTICS

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REAL ESTATE ANALYTICS

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Real estate transactions include major investment and risk, especially in a changing market, as is 2008.  For real estate market information or transaction assistance contact REA's Steven J. Krohn, affiliated with the REAL ESTATE GROUP, INC. for excellent professional assistance. 

Consultants at RE Analytics and the REAL ESTATE GROUP, INC. currently seek assignments in real estate market analysis, GIS analysis or financial modeling or property analysis.  Please contact directly via phone (916) 456-6085, (916) 501-6085 (cell) or email at skrohn@reanalytics.com.

For a quick analysis/estimate of home values, try www.zillow.com ....a very sophisticated first step in the pricing of your property. To strategically price properties, RE Analytics adds to the basics.

Zillow Property Estimates

BUYERS, MORTGAGES & PRICE MATTERS 2008

Sacramento area residential real estate continues to show evidence of transition. Trends in market data can be easily forecasted, turns in market data require a greater level of analysis and fortune. Such is the case in the current market conditions given oversupply conditions, and reduced confidence among buyers.

Review of price per bedroom data for the fourth quarter indicate a major drop in closed values. In October standard indicator price per bedroom registered a $130,000 value. By year end this value dropped below $100,000 to $91,000. Experience suggest this steep year end drop may be a function of year end selling on the part of investors and others concerned wth tax planning, yet the undeniable oversupply of housing and magnitude of distressed properties certainly added to the dip.

This drop is analagous to a stock market crash. Admittedly, the drop did take weeks, but real estate markets, as an asset class, move more slowly. In the 27 years REA has watched real estate prices, the fourth quarter of 2007 will stand out as the most precipitous drop ever. Stockmarket adjustments do bounce back, and REA expects a similar pattern with real estate even though the adjustment process will be slower.

The drop in Federal Funds rate will steepen the yield curve and allow more loanable funds to flow into lending institutions. The impact upon the mortgage rate will depend upon any changes in demand for mortgage money. According to the Mortgage Bankers Association, past weeks and lower rates increased the rate of refinancing in the market. To the extent lower rates and lower housing prices attract buyers, mortgage rates will respond accordingly. The general expectation would be stable mortgage rates owing the the increase in money supply, and the expected increase in demand..i.e. the market adjustment will cancel each other out.

Lower interest rates support housing prices, however, so REA does not expect the price slide experienced during the fourth quarter to continue. The next few weeks are likely to be the price bottom in the local real estate market, as seasonal demand increases occur with the springtime flowers.

 

HOME CLOSINGS BY MONTHHome sales, considered the day a purchase contract is accepted, before the close date as escrows are opened and processed over 30 to 60 days. The chart shows expected closed sales per month. More closings occur during the spring and summer months. The 2005 season has begun, so contact GBC Realtors to guarantee a worry free transaction.

SELLING TIPS Curb appeal represents the packaging of your home. The home purchase is an emotional choice subject to financial limits. Make the exterior of your home is inviting by following these guidelines

The lawn should be trimmed, the sidewalks edged, and the yard cleaned. If the season is suitable, the flowerbeds should be cultivated and flowers blooming.

Touch up anything that needs it.

Consider the value of a quick coat of exterior paint.

Make sure there are no toys or animals in the front yard during buyer showings.

Have porch furniture attractively placed.

Check your doorbell to make sure it rings.

The Top 10 Challenges Faced by For Sale by Owners

  1. Virtually every Buyer buys by comparison. Having only one house to show prevents you from helping the buyer do comparison-shopping.
  2. It is difficult to determine the tastes and requirements of a Buyer if you have not had the opportunity to fully qualify him/her beforehand.
  3. Do you have the legal expertise to personally prepare a valid and fully enforceable agreement? If not, be sure to have an attorney review all documents.
  4. Buyers are reluctant to discuss their finances with the other principal. Most sellers fail to ask for a credit report, source of down payment, as well as other information critical to determining the buyers’ credit worthiness.
  5. If you have to call the Buyer back yourself, you are weakening your bargaining position and may give the buyer the impression that you are desperate to sell. A seller who seems anxious usually receives less money for their house.
  6. Buyers normally will not discuss the disadvantages or shortcomings they feel are present in your property. Thus, because you do not know what their objections are, it is virtually impossible to overcome them.
  7. By showing your property to whoever calls on your ad or your signs, you will often waste valuable time doing showings for unqualified prospects.
  8. Buyers who know you are selling For Sale by Owner almost always deduct the six percent off your asking price.You are essentially viewed as a "wholesaler" and thus, Buyers expect to pay a wholesale price, rather than a retail price.
  9. Obtaining the name and phone numbers of everyone who calls is often difficult. Buyers are often reluctant to provide strangers with accurate information about who they are and what they can afford.
  10. For most sellers, their home is their most valuable possession. Are you willing to risk having your most valuable possession sold by someone other than a well-trained, seasoned professional?

 

 

 

 

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