Posted tagged ‘Foreclosures’

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

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.

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!

IT’S UP! IT’S UP! IT’S UP!

June 28, 2010

Review of the last 12 months

The Median Sales Price for the Merced/Atwater area has risen 22% in the last 12 months–from $100,000 in May 2009 to $122,000 in May 2010!  The market appears to have bottomed out and since January of this year is steadily moving up. The average days on market has decreased from 60 days in May 2009 to 47 days in May 2010.

If you have been hearing people say that there is nothing on the market–they’re right.  Inventory has dropped to 2.3 months (meaning if the rate of sales continues and no new inventory is introduced, the current inventory will be completely exhausted in 2.3 months).

Many people have been asking: “Is is a great time to buy?” –  The answer is YES

Many people have also been asking: “Is is a great time to sell?” –  The answer is YES

Why is it a great time to buy?

  • The Median Sales Price is down to $122,000 from $350,000 – a reduction of 65% from the peak in the 3rd quarter of 2005.
  • Interest rates are at historic lows.
  • The Local Affordability Index is at 90% – which means that 90% of the local population can afford to buy the average priced home.  (At the peak in 2005 only 12% of the population could afford to buy the average priced home)

Why is it a great time to sell?

  • With affordability up and interest rates down, there are many, many, many buyers actively looking in the market.
  • With very low inventory, there is the perfect combination of low supply and high demand – which produces quick sales, and many times offers are above the asking price.

March 5, 2010

March 5, 2010

The following is a reprint courtesy of Gonella Rentals Market Update (originally posted 1-29-10):

We at Gonella Property Management have been working diligently to accommodate the needs of the Merced community. Our staff has been assisting our customer base by showing as many properties as we can and taking as many steps as possible to get housing for people when it is needed the most. We have not seen a downturn in our customer base, even with upheaval of the holiday season. Many of our clients include new property owners, families and students.

Most of our clients of the past three months have been families that have suffered the unfortunate impact of foreclosure. Thankfully our fully staffed office is in the position to assist as many individuals/ families as we can. At this time rental homes have been the main driving force for our office. We have several apartments available and we believe that market activity will be picking up in the coming months. Typically January is a slow month for rentals February sees more activity.

Properties Rented


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January 15, 2010

January 15, 2010

In order to know where you are going, you must take a look back to where you have been. The 2009 real estate market provided many challenges and surprises.

In Merced County the median sold price in December of 2008 was $115,000. In December of 2009 the median sold price was $110,500. This is a decrease of only 4%. An argument can be made that the market is starting to stabilize. Taking a longer look back- in December of 2007 the median sold price was $227,000. The December 2009 price of $110,500 is a decrease of 51% over a 2 year period.

The average of days that a property was on the market was 114 days in December 2008. In December 2009 the average days on the market was 31 days. This is a decrease of 73% in a 1 year period.

From December 2008 to December 2009 the number of properties for sale has decreased 56%. This is most likely attributed to State and Federal efforts to slow down the number of foreclosures. This has resulted in a decrease in the number of properties sold from 288 in December 2008 to 156 in December 2009 – a decrease of 46%. Also, the inventory (as noted in months) has decreased from 4.4 months in December 2008 to 2.9 months in December 2009 – a dramatic change from 25.6 months of inventory in December 2007.
I believe that the strongest indicator that the market has stabilized is that the median sold price has only decreased 4% in the last 12 months. Further evidence of market stabilization is that the median for sale price has gone from $124,750 in December 2008 to $124,900 in December 2009 – a slight increase of less than 1%.

In 2010, the market will continue to stabilize; interest rates may rise, but still remain affordable; and prices, we believe, have hit bottom and we feel may slightly increase.