Starter Homes in Folsom CA Hard to Find
January 23rd, 2010 categories: Folsom CA, Folsom Lake, Folsom Lake Homes, Home buying, Real Estate
Market update Jan 2010
Buyers already need the patience of Job to close a short sale which currently represents anywhere from 45-65% of all home purchases in our area. The statistics show that they take an average of 120 days to get to the negotiation stage in our area with an average closing another 30 days. Additionally, over 38% of recent home purchases were funded by FHA, which typically adds 15-30 days to close the transaction. What this adds up to is more frustration for anyone involved in the real estate market today.
For clarity, a short sale is subject to the lender approving the sale. MLS rules require that when the seller has accepted a short sale offer the listing has to be changed to a contingent status. Most real estate agents will not show contingent listings because once the seller has sent it to the bank for consideration it is essentially off the market to other buyers. The dirty little secret is that banks don’t really want to see more than one offer because they are overwhelmed with work, so agents oblige them by taking highest and best and keeping others in back up.
Adding more frustration for buyers are the new FHA requirements. News of increased down payments and higher mortgage insurance premiums doesn’t bode well for those using this type of financing.The beauty of an FHA loan is its “relaxed” standards for qualifying. The rates are typically a bit higher than a conventional loan but the credit score required is lower, making it easier for buyers to secure a loan. Since it is backed by the Federal government should the buyer default, it’s no wonder these loans soar in hard times. Recent news of FHA’s reserves nearing bottom has increased the conditions lenders are putting on buyers making it harder to secure these loans. Now is the time to strategize and take advantage of this program before congress increases the minimum down payment and interest rates.
One glimmer of hope I have experienced is the increase in Broker Price Opinion (BPO) requests from the banks and asset management companies. These opinions are used by the banks to gauge the value of a property in a given area. Once the bank determines the value of its asset, the property is then released for sale. The increase in BPO requests tells me that there are new REO’s (Real Estate Owned) coming online within the next couple of months. This is good news for those buyers ready to purchase and even better news for brokers working hard to survive this market.
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Folsom’s Inventory Status
October 23rd, 2009 categories: Folsom CA, Foreclosures, Home Auctions, Short Sales
Current Statistics for Oct 2009
As Halloween approaches it appears that some of the homes on the block will have the porch light out for reasons other than avoiding tricker treaters.
Inventory is down in Folsom CA and short sales and foreclosures currently represent just under one half of all residential home sales. The spookiest information I found was the amount of bank owned homes (REO’s) in Folsom which currently stands at 896! According to Realist there are currently 232 pre-foreclosures in Folsom which means that the homeowners are behind in their mortgage payments and a Notice of Default (NOD) has been filed. Their are also 192 homes that are set to go to auction. I usually see most of these homes go back to the bank because buyers are leery of purchasing a home without full disclosures available on the condition of title.
The latest numbers for Sept. 2009 show that there were 64 homes sold in Folsom CA, of which 14 were bank owned. Short sales accounted for 12 homes sold which is encouraging because most likely those homes were still occupied and maintained up to the sale. The rest of the properties were fair market sales which include investors selling previous bank foreclosures.
There is some positive news on the horizon which includes a possible extension of the $8000 tax credit for buyers. The discussion includes allowing all buyers to participate so that could help those move up buyers re-examine their options. One other piece of good news are the current interest rates which are still hovering at the 4 3/4% to 5 1/2 % range. These are not the frightening rates that were available when I purchased my first home…they were around 11%…now that’s scary!
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Buying Investment Property in Folsom
September 21st, 2009 categories: Folsom CA, Investors, Real Estate, Tax Incentives
Seven Pointers for Success
Folsom is a great place to live and an even better place to own an investment property evidenced by the numbers of first time investors who came through my open house this past Sunday. Many are just starting their investigation and some don’t really know what to expect so I’ve complied the answers to the seven most common questions about real estate investing.
1. How important is location? Investing in the best location you can afford will dictate the kind of tenants you will attract, and in turn, how much rent you can charge. More desirable neighborhoods appreciate more over time and are less susceptible to the ups and downs of the real estate market.
2. What about repairs? Expect to spend some money on repairs and resist the urge to upgrade. Your thinking should be based on an investment NOT what you would want if you were living there. The rule of thumb is light, bright and clean and remember you will need to factor in new paint and carpet every few years.
3. How do I avoid capital gains? There is a tax rule (1031) that allows for investors to exchange like properties and avoid capital gains so long as you don’t take any profit from the sale. This will allow you to build a nice real estate portfolio if that is your retirement strategy. For most small investors real estate is a buy-and-hold investment and a time frame of at least seven to ten years will allow you to ride out any swings in the market and provide a nice cushion for your retirement. Leave the flipping to the seasoned vets and think long term.
4. What are the costs involved? Calculating the property taxes, insurance, utilities, maintenance, and repairs are considered the cost of doing business…more than just the mortgage payment. Vacancy rates vary but if you buy smart you should be able to figure in a conservative 5% which is standard in the industry.
5. Are fixers a good deal? Buying the worst house in the best neighborhood can work to your advantage. Renters look for better schools and neighborhoods and are less picky about floor plans. Deferred maintenance is the usual cause of property repair so if you have the cash on hand and are not afraid of a little work, you can increase your value by some sweat equity. Don’t skimp on the major repairs though, always hire a licensed contractor.
6. Can I do the credit checks myself? Pay the extra money to run a full background check when screening future tenants. I can’t stress this enough! Running a credit check will give you the basic information that is available electronically but doesn’t address issues that can only be found by a phone call or letter. Some states don’t make information available electronically so you won’t know if they’ve got child support or other obligations that could impact their ability to pay rent.
7.Where do I learn about landlord rights? The Dept. of Consumer Affairs and HUD websites have everything spelled out. Learn about the eviction process and other potential issues so you can do things right, saving time and money. Remember the goal is to find tenants that pay the rent on time, leave the property in good condition, and don’t cause problems with the neighbors. If you would like help finding investment property in Folsom please email me for more information.
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Condo Sales Activity in Folsom CA
September 5th, 2009 categories: Folsom CA, Real Estate, Sacramento Co. Real Estate
Short Sales Dominate Market
Condominiums are a great way to get into the housing market and take advantage of the $8000 tax credit and it appears that a lot of people are thinking along the same line. As of today, Sept. 5, 2009 there are 47 condominiums for sale in Folsom with 39 in some sort of available status. The other 8 are currently pending sale which means that barring some catastrophe the property should close escrow within a reasonable period of time. In the previous market “reasonable” meant approximately 30-60 days. This market shows the longest days on market (DOM) for condos in Folsom at 846 days…certainly gives new meaning to a long escrow doesn’t it?
Another interesting statistic is that of the 47 condos currently listed there are 9 REO’s (bank owned) and 20 in a Short Sale status. The average DOM is coming in at 177 so you can see how short sales are impacting the market and extending the average time on the market. Last month in Aug. 2009 there were 6 closed sales for condos in Folsom and 50% of those took longer than 120 days to close. Kudos to those patient people because they paid on average $149.14 per sq.f t. for a condo just 3 years old in Folsom. They averaged a 1470 sq.ft. home and paid an average of $220,000…not bad for starters!
There is a rule of thumb in real estate and that is: Never sell your first home. The reasoning is that your income will increase so affording another property later on is highly likely. By keeping the first home you diversify your retirement income, can utilize the property for additional funds should the need arise, and have someone else paying that mortgage. With that in mind, a condo is the perfect vehicle to invest in. It provides shelter, tax write-offs, future liquidity and the best part is that you don’t have to maintain the property once you move out. If you find that you like Folsom and want to know more about condos please give me a call and I’ll be happy to assist you.
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Cycling event in Folsom CA Sept. 11-13
August 25th, 2009 categories: Folsom CA, Outdoor Activities, Special Events
Northern California’s Best Family Bicycling Event
This will be the 2nd year that Cyclebration will happen in Folsom CA and is widely anticipated! Last year’s event was a great success and featured timed trials, circuit racing, mountain biking, opportunities for families to ride across Natomas Crossing and a variety of vendors willing to teach you some new tricks. To participate in the events just go to the website and register beforehand or call 916-355-7366 for more info…you do get a break for family registration.
You can count on plenty of fun things to do and if you don’t have a bike go see Travis at Bicycles Plus where you can rent a bike and helmet for about $40 a day. There’s even a Treasure Hunt ride sponsored by REI where you follow the treasure map course to find the prize. Friday night at Cummings Park is the FAM JAM which features daredevil BMX at it’s best. This is a weekend event so check out the site and mark your calendar!
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Kids Safety Day in Folsom CA Sept.23
August 19th, 2009 categories: Folsom CA, Special Events
FREE event for families at California Family Fitness
Time again to teach the basics to our children and California Family Fitness is hosting a Safety Fair for that very reason. This is an opportunity to have your children finger-printed by the Folsom Police Dept. and meet the men in blue who ride on horseback and work with the canine unit. The Folsom Fire Dept. will also show up with one of their units and teach your children about how to protect themselves and others. Flu shots will be available from Med 7 which is welcome news especially with the advent of the bird and swine flu.
Even though Folsom is a great town it still has big city problems evidenced by the crime reports available on the police news city website. You can also check for registered offenders in Folsom at the same site. Another great site I found to help make parents more aware features Joe Rosner, Director of Best Defense of Illinois 
and author of “Street Smarts & Self Defense for Children.” His basic maneuvers list is simple to follow and helps keep you focused on the goal of staying safe.
Cybercrime is rampant and another standard in parenting procedures. Social media has opened up new avenues where predators can stalk children without their ever being aware of it happening. Watch this video put on by the Social Media Club of Sacramento to help you identify areas of vulnerability. This is a great reminder to check your children’s MySpace and FaceBook accounts because you never know who is posing as a friend. One last resource to check is the Netsmart Workshop which offers a variety of websites and free safely publications. This event should help parents remind their children to be leery of people who seem a bit too friendly and prevent tragedies.
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Folsom and El Dorado Hills Housing Statistics
July 8th, 2009 categories: El Dorado Hills, FHA, Folsom CA, Home buying, Real Estate
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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Rodeo and Fireworks July 4th in Folsom Ca.
June 30th, 2009 categories: Folsom CA, Outdoor Activities, Special Events
Cattle Drive at 6pm July 1st in Folsom CA
Time to cowboy up! The annual Folsom Pro Rodeo starts Thursday night July 2nd at 6pm with the cattle drive on Wednesday July 1st on Sutter Street followed by live music in the historic district. There is also the 1 mile footrace called the Bullipedes which starts at 5pm just before the cattledrive.
This year with July 4th falling on a Saturday you’ll need to get your tickets early. Look for the Family Discount Package online and don’t forget to register your little ones for the Muttin’ Busting contest.
One of the great things about going to the rodeo over the 4th of July is the fireworks display put on each night at the conclusion of the rodeo. Since this time of year is so dry and dangerous and the types of fireworks considered “safe & sane” are getting in the words of my children “boring” having the option of seeing a great show is just another bonus to a night of family fun.
Just remember to get to Lion’s Park early since the area once available has been taken by the new library and seating is limited. You can pay the extra to park close by as some of the local businesses will be charging to use their parking lots or you can pay to shuttle from Wal Mart. Remember to bring your cooler’s full of drinks and lawn chairs and spray bottles…it’s gonna be hot!
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California Tax Credit Almost Gone
June 19th, 2009 categories: Folsom CA, Folsom Lake Homes, Home Building, Home buying
New Home Sales in Folsom CA driven by Tax Credit
According to the National Mortgage News article of June 18, 2009 the tax credit granting new home buyers $10,000 will soon be gone. Apparently there is a cap of $100 million and the governor’s office said “there is a bill to extend it or increase the money allocated.” The expiration date is March 2010 but it might not last until the end of 2009 at this rate.
According to the sales rep at Elliott Homes this has accounted for the majority of sales in their Chelsea subdivision for March and April. Folsom doesn’t have much left in the way of new home builder’s since Elliott purchased the last of the remaining land in Empire Ranch. Originally Empire Ranch consisted of about a dozen different builders offering a variety of homes styles. What is left are a couple of condo developers and some custom lots in the Hillcrest subdivision.
For related articles: http://folsomlakehomes.com/2009/02/24/tax-credit-for-new-homebuyers/
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Beth Mergens Folsom Deal of the Week
June 16th, 2009 categories: Folsom CA, Folsom Lake, Folsom Lake Homes, Home buying
Real Estate Deals in Folsom CA 95630
As promised I would scour the landscape to find the best deal happening in Folsom CA this week and I’ve found a wonderful home listed in the coveted Briggs Ranch subdivision. This 3bedroom 2 bath was built in 1988 and is just under 1300 sqft. It has a 2 car garage and is approximately 1/6 of an acre.
Briggs Ranch is well known for it’s grammar school, proximity to Folsom Lake and mature landscaping. Additionally the fact that there are no Mello Roos fees or HOA’s keeps people who live there from selling and moving on. In fact, there are a number of neighbors who have bought and sold within this subdivision and the investor properties are few. This subdivision hosts many activities from July 4th parades to placing Christmas luminaries throughout the entire subdivision.
This home was posted on the MLS on June 12th and has a few offers in negotiations which is not unusual considering the $259,900 price tag. Although higher in price the location is what adds value given the excellent condition and favorable location but is still a deal at $204 per sq.ft. Because it is a short sale there is still a possiblity of landing this deal given the fickleness of today’s buyer.
Folsom currently has just under a 4 month supply of inventory with a median price at $355,000. The average price per sq.ft. is $178.00 but you have to remember that this is an average of all the homes sold in May 2009. If interested in conducting your own search just log on to my MLS search and let me help you get started finding your deal.
For related articles:
http://folsomlakehomes.com/2008/11/09/thanksgiving-day-race-in-folsom-ca/
http://folsomlakehomes.com/2008/10/29/folsom-soccer-membership-exceeds-3000/
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