Jamie Schou Real Estate

I came across an interesting article today from the Wall Street Journal that details the correlation between bank owned homes on the market and the drop in prices, as well as how the banks’ plans for foreclosures will drive the future market. Here’s an excerpt from the article (or read entire article):

“The speed at which house prices fall over the next few months could depend less on mortgage rates and Americans’ appetite for home buying than on how banks decide to manage the huge number of foreclosed homes they own or may take from delinquent borrowers in the near future.

Unlike home owners, banks often are much quicker to slash prices to unload properties quickly.

The upshot is that, the more homes being sold by lenders, the faster prices tend to fall. That pattern was clear over the past two years: Price declines that began four years ago accelerated rapidly in 2008 as banks dumped foreclosed properties at fire-sale prices. By January 2009, the share of distressed sales had soared to 45% of all sales nationally; it was even higher in hard-hit markets such as Phoenix, according to analysts at Barclays Capital.”

The situation is similar here in the Tahoe/Truckee market, where price declines have been seen over the past few years as well. Right now, bank owned and short sale offerings make up only 9% of current residential listings, while year-to-date they have made up 33% of sales and account for 23% of pending sales. Not as high as the national statistics but still a large percentage, especially when you look at the difference between the listing and sales volume.

Feel free to contact me if you would like to capitalize on the pricing advantage of foreclosure and short sale properties here in the Tahoe/Truckee market, or view all current distressed property listings HERE.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com

EMERYVILLE, CA (LoanSafe.org) – The number of price-reduced homes on the market increased 3.26 percent in August compared to July, according to the latest data from national brokerage ZipRealty (NASDAQ: ZIPR). ZipRealty’s monthly review of MLS-listed properties in 26 major markets found that 47 percent of “for sale” homes had at least one price reduction and the average seller actually slashed their list price twice to attract buyers.The growing number of price-reduced homes outpaced newly listed homes in August, which increased less than one percent, with sellers nationally reducing their asking price by an average of $19,092.

“It appears that homebuyers are taking their time as they don’t feel a sense of urgency to make an offer, unless the price is right, and sellers are having to aggressively cut their prices to stay competitive in this market,” said Leslie Tyler, vice president of marketing for ZipRealty. “We typically find if a buyer hasn’t walked through the door in 30 to 45 days, a seller needs to lower their asking price. If a home hasn’t had an offer in six months, it’s time to rethink the sale.”

These numbers and statistics play out in the Truckee/Tahoe market as well. Since September 1 there have been 139 price reductions in our market, with only 74 new listings during the same period. Over half of these listings (73) have been reduced by $50,000 or more from their original list price. The average reduction has been around 15% of the original listed price, and these homes have been on the market an average of 166 days. Compare this to the 544 single family home sales so far this year in the Tahoe Sierra MLS, and the numbers become clear. Homes have been selling for an average of 85% of their originally listed asking price after 114 days on the market. Homes selling in 30 days or less sold at a 96% average of original list price. This shows sellers need to be competitive from the start if they want to attract serious buyers and sell their property in the least amount of time.

Feel free to contact me to discuss the best strategy to position your property in today’s market for a quick sale and maximum return. You can view all local listings Here, or get up-to date foreclosure and REO listings.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com