How’s the Real Estate market in Sonoma County?

One of my goals this year is to post something about real estate once a week – and sprinkle in some Sonoma County lifestyle blurbs along the way.  All I can say is that I did not anticipate the rapid succession of events in the first month of the year.  The market is hot!  What do I mean by that comment?  I have been showing property and going on listing appointments ever since I returned from Hawaii.  Last week we had some much needed rain which did not slow things down.  On Sunday, January 22 with a playoff football game as competition, I had seven groups come through an open house in the pouring rain.  That may not seem like much but I did not advertise, put 4 signs out on the road and was out in Freestone.  This is remarkable.  Three years ago, I sat in an open house on beautiful days with 12 signs and never had a looker.

Enough of the excuses.  Here are the statistics for the last half of January (16 – 31).  228 single family homes went on the market.  75 were short sales and 69 were bank owned properties.  139 homes came back on the market.  This means that 139 contracts were cancelled – the buyers walked away.  Why?  It could be that they found something wrong in the inspection that they could not live with.  It could be that the 54 short sales that were cancelled was due to the bank taking so long to approve the sale or the property could have been foreclosed upon while waiting for short sale approval.  37 bank owned properties didn’t go on to close.  Maybe the buyers could not qualify for the loan.  Whatever the case, this is a significant number of buyers not continuing with the sale.

On the other end of the spectrum is the 522 properties that went into contract.  172 were short sales and 88 were bank owned.  That is a lot of properties (359) that are regular sales where people have equity in their homes.  That is almost 70% of the properties going into contract are not short sales or bank owned properties.  This is a wonderful statistic to me.  Buyers are making offers on homes that do are not in distress.  The bad news is that for sellers, there is no longer a premium in price for these sales.  The good news is that these properties are selling.

Speaking of sales, 228 properties sold during this time.  88 of these sales are regular (not short sales or bank owned).  75 are short sales and 69 are bank owned.

For those properties that are sold in the first 30 days of being on the market, the sales price is very close to the asking price.  Non-stressed properties sell at about 96% of the asking price.  Short sales are sold at 98.6%  of the asking prices.  Bank owned properties that sold in the first 30 days sold at 104.7% of the listing price.  All this says to me is that property owners that are not under stress ask more than the sellers with properties that are under stress.  Banks price to sell and short sales go for a bit under the market value.

The bottom line is that there is a small margin on price for a short sale.  The cost is the time of uncertainty that goes with a short sale.  I attended a seminar on short sales this last Monday.  The one real takeaway was “Don’t confuse a bank with logic.”  Everyone asked why the banks do not respond or make decisions more quickly.   The answer had to do with the large number of files each negotiator handles.  I get a bit frazzled when I handle more than four files.  They were talking about ninety files for each negotiator.  That is staggering.

We are dealing with a very complex real estate market.  There are many buyers and sellers but all are looking for a great deal.  This is a great market.  If you are a buyer you will get a great deal.  If you are a seller, there are buyers out there.    Patience on both sides are what is needed to make a transaction happen.

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