January isnÕt my favorite month but it has positive traits. We love the festive holidays and itÕs cheerless boxing away our Christmas decorations for another year. The house looks half-empty without the tree, garland and stockings that have been on display since Thanksgiving. But on New YearÕs Day everything goes back into storage for the next 11 months. Frankly, by January, IÕm anxious to get back to a regular work routine. Real estate activity begins to wind down by mid-November and by January IÕm looking forward to working steadily with clients again.
If JanuaryÕs sales activity, reported by the El Dorado County Association of Realtors, is indicative of the marketÕs direction, then the worst is over and 2010 will be the year of sales stability. The 120 county home sales were 20 percent higher than January of 2009 and 34 percent higher than January of 2008. Last month was still well below the 150 unit 10-year sales average but in light of the current recession the increased interest in county homes is a welcomed change.
LendersÕ foreclosed homes, REOs, made up the countyÕs largest percentage of home sales at 44 percent. Short sales, which require the existing lender(s) to discount the mortgage, accounted for another 24 percent of monthly sales. That trend is likely to continue for much of this year. Individual sellers, encumbered with a mortgage, have little chance of competing with lenders selling their own REOs and discounting the mortgages of other financially troubled borrowers.
The countyÕs median selling price of $315,000 declined by 3 percent from January of 2009 but was up slightly from DecemberÕs $286,500. History does repeat itself. Last monthÕs median price was comparable to January of 2004. Our median price continues to be hammered down by the price paid for REOs. Last month the median price for an REO was $220,000.
Monthly home sales in El Dorado Hills increased 25 percent from January of Õ09. Of the 44 closed escrows, nine were bank REOs, 19 were short sales and 16 were with individual sellers. Currently the area has 167 individual sellers competing with 140 short sale sellers and 23 lenders offering their REOs. The areaÕs average selling price at $500,000 was 5 percent lower than a year ago. The statistical average was propped up by three area sales over $1 million. The areaÕs median selling price, the point where half the homes are selling for more and half for less, is $425,000.
Of the 13 monthly sales in Cameron Park, six were REOs, two short sales and the other five were owned by individuals. Sales were up 44 percent and the areaÕs average selling price at $289,000 fell 2 percent from January of 2009. Currently the area has 140 homes listed for sale including 56 short sales, 21 REOs and 63 individual sellers. The median listed price is $315,000, which buys three bedrooms, three baths and 2,100 square feet.
The greater Placerville area reported nine sales averaging $240,000. Monthly sales were up 30 percent but the average selling price fell 17 percent from a year ago. Eight of the nine sales were short sales or REOs. Currently the area has 106 homes listed for sale including 34 short sales with a median price of $201,000, 10 REOs listed with a median price at $205,000 and 62 homes owned by non-short sale individuals with a median listed price of $339,000.
Most communities in the county reported increased sales, albeit at a lower price than last year. Pollock Pines/Sly Park was different with fewer sales but at a higher price. The average selling price for the nine sales in the area was $200,500 with half reported as REOs. Currently the area has 90 homes for sale; 31 are listed as short sales and 12 as REOs.
Other areas of increased sales activity included: Somerset/South County with seven sales averaging $212,000, Diamond Springs/El Dorado with six sales averaging $221,500, Georgetown/Garden Valley with five sales averaging $125,000 and Cool/Pilot Hill with four sales averaging $298,000.
Available residential listing inventory continues to decline, down 10 percent from the same time a year earlier. Of the 950 county homes listed for sale, 400 are listed as short sale listings at a median listed price of $300,000, 144 are REOs listed at a median price of $245,000 and 400 are neither a short sale or REO and listed at the median price of $385,000.
With two-thirds of all sales either REOs or short sales, individual non-short sale sellers who can afford to sit on the sidelines this year should. Renting or a lease-option may be another alternative than price discounting into a price sensitive market. At our current sales rate we have a three-month supply of REOs, a 14-month supply of short sales and another 10 months of inventory listed on non short sale sellers.
Buyers should act quickly if they want to take advantage of the federal tax credit that expires in April. The odds are also in favor of higher interest rates within the next six months gradually increasing from the 5 percent range to the 6 percent by yearÕs end.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Web site at www.kencalhoon.com.