Posted tagged ‘City of Merced’

Why am I having trouble buying a house?

March 19, 2012

With the all of the changes that the real estate market has endured throughout the current economic climate, it is imperative that we keep a very close eye on several aspects of the market in order to understand the challenges that buyers and sellers may face.  One of the key factors we analyze is the current inventory of homes for sale.

One of the reasons buyers may be having trouble securing a home is that there are so few properties for sale.  In January of 2012, the Multiple Listing Service reported an inventory level of 2.2 months.  This means that if no new properties came onto the market, and we continued to sell them at the current rate, in 2.2 months there would be no houses left to sell.

At an inventory level of 6 months the market is considered to be in balance and when inventory exceeds 1 year there is considered to be an oversupply. So at 2.2 months, when a property comes onto the market and is priced correctly, it typically sells in a short period of time and usually obtains multiple offers – some of which will be all cash.

If you are currently in the process of looking for a home and if you keep in mind the low level of inventory, this awareness should help you in structuring your offers to increase the chances of them being accepted.  A few important points to consider when structuring your offer:

  1. A good deposit to show you are serious
  2. Full price offers, or in some cases, offers that are above asking price when there appears to be a lot of competition.
  3. Keep your conditions to a minimum

On the other hand, if you have been thinking of selling your property, NOW is an excellent time, as values are increasing and homes are selling quickly!

Don’t forget to keep checking back with us this month as we cover some of the other topics that are vital in today’s real estate market.

Is the Market Changing

November 9, 2011

The percentage of active bank owned listings, also known as REOs, on the market has decreased from approximately 70% of all listings three years ago, to approximately 18% today. Short sales, on the other hand, have risen to approximately 43%, and standard sales have also risen to approximately 35% of real estate transactions.

The decrease in REOs seems to be due to banks holding properties off the market. Eventually, however, financial institutions will have no choice, and will place this shadow inventory on the market. In order for the real estate industry to make a complete recovery, the inventory of foreclosures must be sold and taken off of the banks’ books.

According to the City of Merced, there are currently 518 vacant homes, a decrease from 6 months ago, where there were approximately 720 before some of these houses were listed.

Call Coldwell Banker Gonella Realty for a complete list of homes on the market, including all bank owned properties, at any of the following numbers:

Merced Sales Office:                                    209-383-2171
Atwater Sales Office:                                   209-358-6429
Commercial Office:                                      209-725-7253

Open House Extravaganza

June 14, 2011

Courtesy of the Merced Sun-Star (originally ran June 4th, 2011)

On June 4th and 5th we celebrated the National Association of REALTORS® Open House Weekend.  Coldwell Banker Gonella Realty held 19 open houses, and it was so exciting to welcome a total of 152 visitors to these homes.  Coldwell Banker Gonella Realty is, and always has been,  committed to providing the very best service to all of our clients – both buyers and sellers.  Our Open House Extravaganza is just one of the many ways in which we aim to serve our clients.  Please stop by to learn about the myriad of ways we may be of service to you, and please stay tuned for our next Open House Extravaganza!

If we may answer any of your questions, please do not hesitate to call upon any of our sales associates, conveniently available at these locations:

Merced Sales Office: 209-383-2171

Atwater Sales Office: 209-358-6429

Commercial Office: 209-725-7253

Property Management Office: 209-383-6277

UC Merced Students Impact Rental Market

May 5, 2011

According to the University of California, Merced, the student population is continuing to rise! UC Merced expects 5100 students this year.  This is an increase of approximately 700 students over last year’s census.

This large influx of students is having dramatic effects on the residential rental market. According to Gonella Property Management, there may be a severe shortage of large single family residences in North Merced beginning this summer.

If you have been thinking about purchasing a single family rental NOW is the time!  Prices are still very low and according to Gonella Property Management rents are increasing!

For more information contact Gonella Realty:

Merced Office: (209) 383-2171

Atwater Offie:  (209) 358-6429

Property Management: (209) 383-6277

2010- Real Estate Review

April 4, 2011

We believe that in 2010 the real estate market finally found the bottom.  In January 2010, the monthly median sales price was $96,670-a decline of 71.9% from the peak in October 2005. However, since that date, values have increased to $109,000 as of February 2011, a rise of 11% from the bottom.

This decline in values has a benefit:  Merced is one of the most affordable areas in the country! The Housing Affordability Chart shows that in the 3rd Quarter of 2010, Merced was more affordable than Sacramento, Fresno, the State of California, and, in fact, the entire United States.

With interest rates remaining at historic lows and the fact that this area is more affordable than ever, it is both a lucrative time to sell and an opportunistic time to buy.

Supply and Demand

December 15, 2010

The law of supply and demand is alive and well in the Merced/ Atwater Real Estate market.  In October, 2010, the inventory of available homes for sale stood at 2.3 months (meaning that if no new homes came on the market, the existing inventory would be sold out within 2.3 months if sales continued at their current pace). The inventory 2 years ago in 2008 was a 5.9 months which is a decrease of 61%.

The lack of available inventory is continuing to increase prices.  The median sales price increased from $105,000 in October 2009 to $113,000 in October 2010.  This is an increase of 8% over one year.  Interestingly, the median list price was $122,950 in October of 2009 and $125,000 in October 2010.  This is just a slight increase of approximately 1%.  What does this mean for buyers and sellers?  This represents an incredible buying opportunity for buyers because, although present inventory remains limited, prices are down 60% from the peak in 2005 and interest rates remain at historic lows, thereby increasing affordability for our local community.  In fact, over 90% of our local buyers can now afford to buy the median priced home, whereas in 2005 only about 11% of our local buyers were able to afford to buy the median priced home.

In October 2010, 205 properties were listed in the multiple listing service.  During the same period of time, 195 properties were placed in escrow.  New inventory is selling almost as quickly as it is listed.  This real estate phenomenon has resulted in the inventory continuing to remain tight.  This is a wonderful opportunity for sellers to sell their homes quickly and profitably as, in many cases, sellers are selling their homes for even more than their asking price.

August 11th, 2010

August 11, 2010

From July 2009 to July 2010, home prices have remained essentially unchanged. This is a departure from the last 6 months, which have had a steady increase when compared to the same time period during the previous year. For example, May 2010 showed an increase in price of 22% over May 2009 and June 2010 showed an increase of 14% over June 2009. The most likely conclusion is that not all recoveries are steady–there are going to be peaks and valleys.

Currently, the supply inventory of homes continues to remain very low at 2.1 months.

Even though the Median Sale Price shows no increase from July 2009 to July 2010, the Median For Sale Price, or asking price, for the same time period has increased 9% from $119,000 to $130,000. We believe the cause for this might be more traditional sellers, as opposed to short sales and bank owned properties, on the market.

Bank owned properties at the moment only represent about 25% of the total transactions in contrast to  2009 where bank owned properties accounted for almost 75% of transactions.  In 2010, private owners represent about 42% of the total transactions. It is our prediction that more and more private sellers will come into the market as it continues to rebound.

Rental Property Inventory Update

July 23, 2010

For several months now, the Central Valley has had very small number of properties for sale. Now, it appears that this trend is also beginning to affect rental properties.

According to our Property Management Department, Gonella Realty Property Management – out of 30 single family residences available for rent, there has been an application for, or a holding deposit on all but 3 properties. This indicates a tremendous surge in demand for rentals and we believe that rental prices, which have been steadily rising, will continue to increase.

So, if you’ve been thinking about buying a rental property, but are wondering if you will be able to find a tenant, the answer is more than likely to be ABSOLUTELY!


Gonella Realty Updates Military Officers Association of America

July 19, 2010

On Saturday, July 17, 2010, Loren Gonella spoke before the Military Officers Association of America, Yosemite Chapter in Merced, CA.  Loren spoke about what created the massive increase in housing prices and the over-building that occurred during the real estate boom, as well as where the  real estate market is today, and the future of real estate.

3 things led up to the real estate boom:

1)      Speculative fervor due to the coming of UC Merced

2)      Many out of town builders coming into the area (due to the speculative fervor due to the coming of UC Merced) and then paying too much for land

3)      Cheap credit led to no-documentation-stated-income loans—a person would walk into a lending office and say “I earn $20,000 per month” and the income would never get verified—the lender would just take the person’s word.

These factors contributed to a speculative fervor that caused prices to increase by 25-35% per year in 2003, 2004, 2005.

The market peaked in the 3rd quarter of 2005 at a median sale price of $350,000.  Home values started to fall in 2006 and have dropped almost 70% since the peak.  Today, home values are starting to increase—home values are up from June 2009-June 2010 with an increase of 14%.

We believe that values have bottomed out and will continue to increase.  In fact, there are more buyers than sellers, which have created an inventory shortage.

So where is the real estate market going from here?

We believe that the market is starting to transition from short sales and foreclosures to more traditional sellers.  Also, new home construction is starting to make a comeback, in part due to the fact that the City of Merced is working on reducing new construction fees.

To summarize, we told the Military Officers Association of America, Yosemite Chapter that the market has appeared to bottom out, prices are increasing, and homes are selling!