Mike Lightfoot’s Monthly News Letter
Fair Oaks 25 $140/sq’ Average volume and values holding to minimal declines
Carmichael 41 $137/sq’ Wow 41 sales is up but values holding to slightly down
Orangevale 20 $122/sq’ Low sales volume and values down slightly
Citrus Heights 32 $106/sq’ Volume average and values holding to slight declines
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Here’s a selling tip for you. Differentiate yourself from the other Realtors by offering statistical proven facts when someone asks you how the real estate market is doing. I won’t mention names but one major real estate firm has been pushing the “It’s a Great Time to Buy” since 1998. I just closed an investor purchase loan on a short sale that the owners bought via an FHA loan in 2008. The purchase price in 2008 was around $325,000 and the recent buyer purchased at around $225,000. FHA is seeing quite a few of these scenarios for the first time in almost 10 years. That means FHA will start bumping costs on their loans. No one was doing FHA gov’t insured loans during the 2004 through 2007 era because the loan limits were not high enough and sellers did not want to deal with an FHA financed buyer for fear of repairs and termite reports called for. FHA is the number one loan right now and appears to be our “Savior” in this market due to the qualification guidelines and changes made to compete with Conventional financing. FHA is bumping the monthly mortgage insurance by .25% on 4/18/2011. Get your buyers in contract before that and take advantage. I’ve seen some lenders are making the cut off sooner and even the end of March for some unknown reason so here’s a reason to act now if you can. The monthly premium can be dropped after 5 years assuming you get an appraisal at 78% Loan to Value so keep that in mind.
So when someone ask what’s happening with the Real Estate Market here in the Sacramento area, you can put on your Realtor Hat and say….
“Values peaked in the middle of 2005 and fell sharply until early 2009. 2009 like 2010 was relatively stable and has continued to be stable with overall slow declines in value. 2009 had a false bottom and even a trend upward until winter hit. Winter months saw a noticeable swing down in prices but then remained stable until winter hit in 2010. Values dropped again in the winter of 2010 but not as much as 2009 winter declines. So we’ve found, what I believe to be, a bottom in the market. Can it go down more? Yes. Is it cheaper to buy an existing home than build? Yes. Take note that with record low rates and home prices so low, Deutsch Bank has released a study that shows for the first time in 20 years, renters are better off to buy v.s. rent.”
One thing I’ve noticed is that the cream always rises to the top. The areas that were less desirable before this 2005 sillyness hit are seeing the biggest declines and the East Sac niche type areas of the world have held resilient to more moderate declines. So your home is worth about half of the peak prices in better areas and you are worse off in the other areas.
The amazing thing is everything happens for a reason and the divine outcome is exactly where it should be. We all need to be so thankful and excited to be experiencing all that this crazy world throw’s at us, knowing that living the best we can in the present and being thankful admonishes our fears and anxiety about worrying about what the future will bring. We don’t have any say in the future and any energy we funnel that way will come back to bite you. Life is Good right now in the present. Enjoy the journey with thankfulness.
Thank you for spending some time with me, reading the newsletter!
PS I’ve closed my Mortgage Broker business of 20 years, Sacramento River Mortgage, to go with a mortgage company called Princeton Capital. I can’t believe how advanced and streamlined their company runs. Being based out of Silicon Valley, their technology level, service and home office support team, made this an easy decision for me. My first loan was an FHA purchase and buyers signed in 15 days. Wow! I’m a happy camper….
