Friday, July 25, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

A few real estate predictions for 2012

By
From page C2 | January 06, 2012 |

Ken Calhoon

Welcome the re-entry buyers. Three years ago Mark and Julie lost their home through foreclosure. Last week they closed escrow on their newer, larger, nicer home in the same neighborhood. Their new home was about half the price of what they had paid for the home they lost. They are among a new category of buyers this year who are reentering the market after a two- or three-year respite.

Although thousands of families have left the region after losing their homes to foreclosure, short sale or bankruptcy, many remained. Most have been rebuilding their credit, paying down debt and some have been saving to buy another home. After three years, and in some cases less, mortgage financing is again available.

REOs and short sales will be the new normal. Two years ago REO and short sales accounted for one-third of all the sales in El Dorado County. Of the 200 home sales during December, about half were shorts or REOs. This year distressed sales will account for the majority.

Over the last few years buyers have had the choice of whether or not they wanted to deal with the uncertainties of REOs and short sales. Bad experiences of buying financially distressed properties have been legendary. Subsequently, many homebuyers have avoided the plethora of problems and issues and have limited their home search to the traditional individual sellers. This year excluding REOs and short sales from a buyer’s consideration will not be a viable option. There will simply be too many. Buyers will no longer have the luxury of excluding distressed homes if they are to have access to the majority of listings.

During the last six years of the housing recession buyers and sellers have been holding their breath, anxiously waiting for the much anticipated “bounce.” Many homeowners have postponed selling their home while waiting for the market to turn-around, and potential homebuyers have delayed making a buying decision until they had a clear sign that the housing market is in full recovery. Both buyers and sellers have grown weary of waiting. Their expectation level that the market is suddenly going to turn around and bounce back has finally evaporated. They have lost hope that any change is in the foreseeable future.

Losing faith that the real estate market will somehow have a phenomenon recovery isn’t all bad. More buyers and sellers will now make decisions based upon the harsh reality of the market and their particular situation, rather than postponing decisions based upon unrealistic assumptions. Many who have postponed decisions based upon hope the market would change have finally come to the conclusion that things are what they are, and will make better decisions accordingly.

More foreclosures are on the way. According to Mark Vitner, a senior economist with Wells Fargo Securities, there are 2 million homes in foreclosure, 2 million with delinquent mortgages and 2 million bank-owned homes that are not on the market —dubbed shadow inventory.

Foreclosure filings have been artificially depressed for more than a year as banks have had to deal with many issues including: the robo-signing scandal, state mandated moratoriums and some banks purposely took homes out of the foreclosure pipeline while they cleaned up their books. That’s all about to change.

“The paperwork issues have been mostly resolved and that could mean bank repossessions will come roaring back in 2012,” said James Saccacio, CEO of RealtyTrac.

It will be another quiet year for new housing developments. Don’t be confused about the recent optimistic hyperbole coming from the building industry. It’s lipstick on a pig. The reported increased construction activity is new multi-family housing not single-family homes. Local builders can’t obtain financing to build new homes that cost them $200 a square foot when there is an excess of nice homes available at $125 a square foot.

Interest rates will continue to remain less than 4.5 percent for at least the next six months. As the economy continues to expand, watch interest slowly tick up, moving into the 5 percent range in 2013.

County home sales will remain strong. Home sales this last year were 15 percent improved over 2010 and that pace will continue resulting from low interest rates and home prices averaging less than $250,000. Buying a county home costing less than $275,000 is now less expensive than paying rent.

Rents are going up. Historically, rental rates on single-family homes have been under-valued. Landlords have been willing to accept below market rents in exchange for accumulated appreciation. Investors made money when they sold their properties and hoped to break even during the term of ownership. With no appreciation in sight, that’s about to change.

The outmigration of families from California and our region will continue, albeit at a lower rate. Watch for a resurgence in popularity of living in small towns and rural areas.

The improving housing market in the Bay Area and our county’s attractive home prices will begin attracting seniors looking to take advantage of the county’s Prop. 90.

More refinancing opportunities for the 11 million underwater homeowners is scheduled to take effect in March.

The worst is over. The recovery of the housing market is tied to regional employment, which is beginning to gain traction. Most importantly, employers who have survived the last five years by increasing their market share or by restructuring their operational costs have positioned themselves to reap the rewards for their tenacity.

Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website at kencalhoon.com and via e-mail at ken@kencalhoon.com.

Comments

comments

.

News

 
Scaffolding issue makes for contentious meeting

By Wendy Schultz | From Page: A1, 2 Comments | Gallery

 
District 2: Candidates debate jobs versus lifestyle

By Dawn Hodson | From Page: A1, 2 Comments | Gallery

Accident: 1 bullet hits 2

By Cole Mayer | From Page: A1

 
 
Help available for breastfeeding mothers

By Health and Human Services Agency | From Page: A3

El Dorado County School Board vacancy

By El Dorado County Office of Education | From Page: A8

 
.

Opinion

Something to think about: More than what you see

By Wendy Schultz | From Page: A4

 
Popular science

By Mountain Democrat | From Page: A4

The weekly Daley: A good time to be there…

By Chris Daley | From Page: A4

 
.

Letters

Support of Director Prada

By Letters to the Editor | From Page: A5

 
Uphold the Third Amendment

By Letters to the Editor | From Page: A5

Bureaucracy

By Letters to the Editor | From Page: A5, 1 Comment

 
Imagination Theater’s play

By Letters to the Editor | From Page: A5

Watch whom you’re calling ‘conservative’

By Letters to the Editor | From Page: A5Comments are off for this post

 
Fake ‘small farms’ steal from residential EID customers

By Letters to the Editor | From Page: A5Comments are off for this post

People of Placerville

By Letters to the Editor | From Page: A5

 
Computer scam phone calls

By Letters to the Editor | From Page: A5

.

Sports

Sports Scene: July 24, 2014

By Democrat Staff | From Page: A6

 
Quarter century later, Rypien wins ACCG again

By Andrew Hazard | From Page: A6 | Gallery

Outside with Charlie: Paddle time

By Charlie Ferris | From Page: A6

 
Midget Lites join tomorrow’s action

By Bill Sullivan | From Page: A6

El Dorado rallies for last-inning victory

By Mike Bush | From Page: A6

 
Rush sit a win from Series

By Jerry Heinzer | From Page: A7

Tasmanian Devils go undefeated

By Patty Pope | From Page: A7

 
.

Prospecting

El Dorado wines win in Amador

By Democrat Staff | From Page: B1

 
Things to do: July 25, 2014

By Democrat Calendar | From Page: B2

Suds entice the taste buds

By Krysten Kellum | From Page: B2 | Gallery

 
Rhythm and Views goes bluesy

By | From Page: B3

Have an Hawaiian vacation at Carson Road wineries

By Carson Road Winery Asociation | From Page: B3Comments are off for this post | Gallery

 
Summer fun is happening in Twain Harte

By Fire On | From Page: B4Comments are off for this post

Manzanita doubles the music

By Table Nectar And Manzanita | From Page: B5

 
Recording artist at Busby Cellars

By News Release | From Page: B6

Hands4Hope hosts school supply drive

By News Release | From Page: B6

 
Supergroup plays Harris Center

By Carrera Productions | From Page: B6

Artists invited to go western

By Art On The Divide | From Page: B7

 
Visit Tahoe artists during tour

By Special to the Democrat | From Page: B7

Reggae on the River celebrates 30 years

By Reggae On | From Page: B7Comments are off for this post

 
.

Essentials

Lake levels 7-24-14

By Michael Raffety | From Page: A2

 
Crime Log: July 11-13

By Cole Mayer | From Page: A2

Building permits 7/7-11/2014

By Michael Raffety | From Page: A2

 
.

Obituaries

Wallace Murrel Thomas

By Contributor | From Page: A2

 
.

Real Estate

How to have a garden party, minus the whining

By Marni Jameson | From Page: HS3

 
Most common mistakes homebuyers make

By Ken Calhoon | From Page: HS4

.

Comics

TV Listings

By Contributor | From Page: A9

 
Speed Bump

By Contributor | From Page: A9

Tundra

By Contributor | From Page: A9

 
Working It Out

By Contributor | From Page: A9

Shoe

By Contributor | From Page: A9

 
Sudoku

By Contributor | From Page: A9

Rubes

By Contributor | From Page: A9

 
New York Times Crossword

By Contributor | From Page: A10

Horoscope, Sunday, July 27, 2014

By Contributor | From Page: A10

 
Horoscope, Saturday, July 26, 2014

By Contributor | From Page: A10

Horoscope, Friday, July 25, 2014

By Contributor | From Page: A10

 
.

Home Source

How to have a garden party, minus the whining

By Marni Jameson | From Page: HS3

Most common mistakes homebuyers make

By Ken Calhoon | From Page: HS4