Blue Pear Blog

Working on a market analysis for a high-end property this week, I discovered some interesting facts….

In the past 6 months there were NO closed sales for residential properties in the Hopland, Ukiah, Calpella and Redwood Valley areas priced from $700,000 to $2,000,000. There are also NO residential properties in these areas/price range now in escrow! There are 16 properties currently on the market. I remembered a property that sold in the $1,200,000 range…it wasn’t showing up in my search. I moved the time period back to include the previous 6 months. 9 sold properties appeared! Wow! …nine homes sold in that price range from April 2008 to October 2008…and NONE sold from October 2008 to April of ‘09! Of course, you can explain some of that difference by the seasonal market difference but not all of it! How much of it is due to the continuing economic climate change? We will know more in the next few months.

Just recently we have seen quite a few multiple offers on lower end properties in Ukiah. Especially under $250,000. Most of these are foreclosed fixers in good to moderate locations being sold “as-is”.  Several times I’ve seen 3, 5 even 9 offers on properties happening. Banks have become very aggressive in their pricing of foreclosed properties (REOs) is one of the causes. I’ve talked to several listing agents who have shared the experience of recommending a listing price based on a market analysis only to have the bank list the property lower…the opposite of what they used to do. This has sometimes created an offer frenzy. Investors have entered the market for these properties in a big way. First time buyers with low down payment FHA offers are being beat out by investors with all cash offers! Sale prices are sometimes ending up 5 to 10 percent over the asking price. Will this continue? How will it effect the arrival of the “bottoming out” of the market? What do you think?

Someone asked me that the other day. I checked it out. There were 88 residential properties that sold in the Hopland, Ukiah, Calpella and Redwood Valley areas in the past 6 months. 30 of those were bank owned! That’s 34% of all the homes sold! 

Fannie Mae, Freddie Mac and Countrywide all stopped their foreclosure process for 3 months. They were working on doing loan modifications. I understand they all started the foreclosures again. That means we should see a new surge of bank owned (REOs) coming on the market in the next few months.

Did a bit of research on what is selling in the Ukiah area now compared to last year.

88 residential properties sold in the past 6 months (Sept 23, 2008 to March 23, 2009). That’s ALL residential properties, regardless of lot size, home size, price range etc. from Hopland through Redwood Valley. I then looked at how many of those were under $300,000. 53! That’s 60 % of all the homes sold in the past 6 months. Remember when you couldn’t find a home in our area under $300,000!

I then looked at the same information for a year ago (Sept 23, 2007 to March 23, 2008). The total number of residential properties sold in that 6 month period was actually less…78 homes. How many of those were priced under $300,000? Only 22! That’s only 28% of the sales!

First time buyer? Great news for you!

I have just had the wonderful opportunity to work with two different couples buying homes in this market. The experience brought to mind an aspect of this difficult market that I have been pondering. These buyers bought because they wanted to own a home not a piece of real estate. What I mean is, they bought for lots of great reasons that were not all about the price and the investment. Don’t get me wrong,..they were very aware of the market and prices and negotiated agressively. What they didn’t do is choose to rent and wait for the bottom of the market so they could make sure they bought at the perfect time and got the very best price. Our parents, grandparents and great grandparents understood this. They bought homes to live in… to enjoy… to raise a family… to create a place they could come home to and feel it was their own.  They weren’t all wrapped up in how much it was going to increase in value or,…afraid of the possible decline in value.  These two couples found homes they really love and focussed on the enjoyment of living there. These last 10 years of skyrocketing real estate values caused many of us to see a home as a way to make money and the other wonderful reasons for homeownership were lost in the fury. I am happy to see some of us are realizing there are other reasons to own a home.

Hearing the news today about the statistics about home sales increasing was refreshing!….we all are so hungry for good news. There are so many factors effecting the real estate market; it’s so hard to know if any signal is strong enough to be a real sign of change. Talking every day to potential buyers, I hear so many different perspectives on why we aren’t at the bottom of this downturn. Most people I talk to agree the rate of decline is slowing and the bottom of the curve is probably going to arrive sometime this year.  Personally,  I think we will look back this fall or winter and say “we were at the bottom sometime in the Summer”. Who knows? The federal programs, including today’s anouncement about the Feds buying the bad loans from banks, will hopefully pay off for all of us. When will buyers feel safe enough to take the big step and make that purchase? Hopefully soon!

Everybody asks me when I think the market will “bottom out”? The decline in home prices continues to make many buyers want to wait for lower prices before the jump in.

 In an effort to provide answers to this mystery, I have spent many hours researching.  I believe I have the answer!

On January 27th, 2009, the market will stop declining at 5 pm,  Pacific Time. Of course, this will only happen in Northern California with the exception of the town of Hemmit. The market will level off and begin a long quite period with no increase or decrease in values.  Since this will be the case, there is no reason to rush into my office and write offers on that date. You can relax and take your time to purchase over the next several years.

I’m sure you are wondering why January 27th? Well, after some interesting discoveries, I believe it is going to be directly related to the after Christmas sales. Once people have returned the stupid stuff they got for Christmas and purchased bargains in January, they will decide it’s time to focus on real estate. Experts at Macy’s and Bloomingdales shared inside information with me and my staff and January 27th is the date all this will happen.

 Now you know and you can focus on more important things like what Paris Hilton will be doing next and why beagles are becoming such a popular dog these days.

Newcomers to Ukiah are always amazed when they discover the Sun House and Grace Hudson Museum on S. Main St. The home of world renowed painter, Grace Hudson; this is also a classic example of Craftsman (Arts & Crafts) style architecture. The home was built about 1915 and is completely original and includes much of the original furniture. It is open for tours. Adjoining the home is a the Sun House Museum housing a fantastic collection of paintings by Grace Hudson. The local Pomo Indian Tribe was the subject of most of Hudson’s paintings and they provide a unique window into Mendocino County history in the late 19th and early 20th centuries.

Located in the Ukiah Valley’s eastern foothills, Deerwood Park is a unique and wonderful neighborhood. Many mature oak and madrone trees creat a feeling of privacy and seclusion for homes situated on one to two acre lots.

This subdivision was developed in the 1960’s so many of the early homes are typical California Ranch style. There are also homes built in the 70’s, 80’s and 90’s of various styles. The square footage ranges from 1500 to 3000 with most in the 1800 to 2400 range.

Deer and wild turkeys roam throught the neighborhood regularly creating a visual feast for us while chomping on the homeowners landscaping.

One of my favorite memories of meeting with buyers to write an offer happened several years ago. I received an call on one of my ads in the paper. The buyer said her name was Mrs. Green. After discussing the property, she made an appointment to see it with her husband.  They really liked the house and we went back to the home they were renting to write an offer. She forgot she had told me her name was “Green”. When  I started to write the offer, she had to admit she told me a phony name to because she didn’t want me to “bug” her about buying a house. We had a good laugh. When we closed escrow I had a large keychain made for them with “GREEN” in big letters with the keys to their new home. We have become good friends and I still call her Mrs. Green after 20 years.

Another fun memory of that day writing the offer was their 2 year old son running around the house naked while we were writing at the dining table. At one point he just climbed up on the table and came over and sat down on top of my briefcase and folded his arms like he was part of the group. Telling him about it years later as a teenager was fun.

Denise Shanahan has a funny story to tell about something that happened to her on her way to an open house.

 Tony Stafford has another great story about and open house event

Steve Bianchi has a good one about an open house too. Check it out.