Folsom July 2009

Current Statistics  07/08/09

Single Family Homes Available  625      

Short Sales Available 213          

REO’s (bank owned) 20

El Dorado Hills

It seems that even though most people say they want to get a deal from the bank, once they actually see the inventory they elect to spend more up front rather than after they purchase. Traditionally, bank owned homes are in need of repair or renovations and that is where FHA loans provide the perfect remedy to an ailing house. The 203k Streamline home loan offers up to $35,000 towards renovations without having to hire a contractor. In fact, Home Depot, Lowes and other major retailers have been approved for this program, which “streamlines” the process and gets the repairs done quickly so buyers can move in without delay. Repairs include everything from new appliances to roofs and gives the new buyers the opportunity to select which finish they prefer. Once the home closes escrow the repairs start immediately but have to be finished within 30 days which is not usually an issue.

Another thing to notice between Folsom and El Dorado Hills is that although Folsom has a much larger population than El Dorado Hills it has less inventory. Currently Folsom has 270 single family residences on the market and El Dorado Hills has 355 yet Folsom hovers around 67,000 people and El Dorado Hills comes in around 42,000 population. Current stats also show the extreme lack of activity in the higher end (above $700,000) market which contributes to the glut of inventory in El Dorado Hills.

Overall, it appears that the lower end market is fueling the fire and frankly, I’m delighted to see young people who have lived here their entire lives be able to purchase a home. It should prove to be much better for the entire community as the next generation puts down roots vs. what my generation had to do which was relocate in order to afford to live.  I’m sure the baby boomer grandparents are enjoying their grandchildren living closeby…I know I am. If you would like help finding a home in either community please email me and I’ll be happy to help you get started.

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Great news! Sales are up, prices are down and interest rates are holding! If you can afford to buy a home now is definitely the time to do it! According to DATAQUICK Sacramento has seen a reduction in price point of 30% since 2008 and so long as interest rates keep steady we’re expecting to see a good summer for real estate sales. The actual numbers reveal that Placer & El Dorado counties are each down 16% with Sacramento closing 2130 homes in April 2009, Placer coming in at 457 and El Dorado at 155 homes sold. To put this in perspective you need to understand that Sacramento county had 4786 homes on the market in April so we’re absorbing a lot of inventory and starting to see multiple offers on the nicer properties.

My local banker tells me that the interest rates are slowly climbing and we’re up from 4.6% to 5.25% in some instances. For every .25 point increase in the interest rate you can expect to to pay anywhere from $30-$130 more per month depending on your loan amount. For a $300,000 home expect to see an increase around $50 per month. There needs to be a sense of urgency because as we get closer to the end of the buying season rates will most likely increase just as the inventory starts to decrease. Remember that on average it takes 2-3 months to find and purchase a home from start to finish.

Another piece of good news is the $8000 tax credit can be used  for closing costs. For a VA loan that means you don’t have to pay a penny to buy a house!  There are also FHA loans available with as little as 3.5% down. On a $300,000 home that’s only $10,500 down and your closing costs are pretty much covered. There are lots of other opportunities for vets and their families as well as those who need a helping hand through FHA. For instance there is a FHA  loan to improve the property that rolls the costs of the improvements into the loan. If you would like to talk to a lender who can explain these loans I can offer a couple of seasoned professionals who specialize in VA  and FHA who would be happy to go over the details with you.

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