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What’s the 4-1-1 on current housing market conditions?

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POSTED July 26, 2013 9:51 p.m.

DEAR REAL ESTATE BOYS: I read your articles in the paper weekly, but I’m not really sure why, because you Boys seem to make fun of your profession. Your answers are normally done with a joke and you both just think you are funny. All that said, I am writing you because you usually write quarterly about the market and where the market might be heading. Could you please give your readers an update on the market?

— Dora Knabb



Well Dora, first off thank you for writing us although I’m not sure why you wrote or why you continue to read us. But your question is timely and the question you asked was going to be our article this week anyway. So, with that said, we’ll also try to make our answers more in line to your liking. Just the facts ...

This is the City. Turlock. We carry a real estate license and the story you are about to read is true. The names have not been changed and the facts, well, the facts are as we see them. We were working at the front desk at our office when the call came in asking about the market. My name is Blackman my partner in crime is Rum beck. We’ re the Real Estate Boys.

It’s been reported in previous articles the market began changing about Christmas time 2012. The market had been stuck in the mud and could not seem to move. Then March arrived like a lamb and ended like a lion. In the beginning of the year the market was still at about $100 per square foot. Sales were okay, but nothing to write home about. It seemed when the sun came out from its winter nap the market woke up also.

The TV, newspapers and magazines were all telling us that the recession was finally over and it was now time to spend. All of a sudden, in March, homes started selling and selling fast. With fast sales, prices seemed to rise. Traditional sellers thought about calling their favorite Realtor to see if their house had equity yet. In many cases they did have equity. By the end of March, prices of some homes had risen to $155 per square foot; some a little more, some a little less.

The one thing that was holding the market off from bursting was inventory. We simply did not have enough homes to list and sell. This problem was not just in Turlock but in the county, state and nation.

Just facts now, ma’am, there’s no joking around with facts. From Jan. 1, 2013 to June 30, 2013 we’ve had 384 closed escrows. That fact, ma’am, covers home sales, multiple unit sales and commercial sales. The 384 number equates to 64 sales per month on average. The lowest price of a sold home was $40,000 and the highest, happily, was $735,000. For multiple units, the lowest price was $90,000 and the highest was $1,800,000 for an apartment complex. Lastly commercial, the lowest sale was $125,000 and the highest was $350,000. It is interesting that the numbers from 2011 and 2012 are almost identical to the numbers of the first six months of 2013.

Where our problems are in real estate, here and in the whole state of California, is inventory. There simply were not enough listings to feed the demand, therefore the prices were going up. As we write this we have 87 listings for sale. Of that 87, only seven are short sales. Presently we have only 11 income properties listed and 23 active commercial properties listed. The total number of listings then is 121 active listings. Now divide that by the average number of sales monthly and you get the number 1.89, which tells us how long our current inventory will last, 1.89 months in this case. The real interesting item to the Boys is that of the 87 listings this year only seven are short sales, whereas, last year we had 69 listings and of that number 66 were short sales.

So, in 2013 the short sale and foreclosure market were leaving their ugly faces from our memories. Not soon enough for me I’ll tell you. If you really study the market, way back in 2011 on June 30, we had 211 active for sale homes, but the majority of those were foreclosures and short sales.

So Rumbeck, what exactly are you saying here? Well Blackman, the numbers have not changed much from 2011 to 2013, but where maybe last year the buyers were driving the bus when purchasing, this year the sellers are driving it. Further, as the above paragraph states, traditional listings and sales are back in vogue. I’m sure sellers are happy to read that comment. And one more thing is changing Blackman. Yeah, what’s that, interest? Yeah, interest rates Lloyd. You know, interest rates went up a little last month. We’ll have to watch that in the coming months.

Let’s wrap this up for Dora Knabb, Blackman. Factually speaking people, the market is much stronger than it’s been in years. It’s stronger because the traditional buyer and seller have returned. While the investors have not exited the market, they are still out there buying and they may be why the prices have gone up so fast. When competing on a purchase they can, and often do, outbid the conventional or FHA buyer.

As we said in the beginning, the prices have continued to go up weekly since March. As of Monday, on the MLS update, newly listed homes were at $185 per square foot, a new high. The next listing was at $143 per square foot, and then the lowest listed price was $109.

On July 22, the Real Estate Boys informed their following of the current market conditions. In a recent real estate story, prices were reported for Stanislaus County up 30 percent. I believe we’ve been telling our readers this for over two months.

Dora, we hope this article met with your approval. Facts can be boring, but facts laced with a bit of wit and humor can make reading and learning a lot easier. We hope you got a little of both.

Respectfully,

The Boys

— A little about us, Lloyd is a retired farmer of 27 years and a realtor for about 10 years.  Lloyd is an active member of the Central Valley Association of Realtors and sits on the CVAR Board of Directors.  Lloyd is a long time member of CVAR’s Master Club for his sales production.

Larry has been involved in Turlock real estate for 30 years and has been a broker for almost 27 years.  He is also active in CVAR activities and is a past president of CVAR.  If you have questions please call Lloyd at 531-4853 or Larry at 484-4216.  E-mail questions for future columns to: lrblackman@earthlink.net or lndrumbeck@aol.com.

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