About 90% of economists predict the recession will end this year. While the fallout from it, including continuing job losses, won’t necessarily end simultaneously this is still good news. Housing prices may be at or near a bottom, and the Case-Schiller Index results released this week, through March of 2009, shows price declines of 18.7% for its 20 city index.

 
Tempering this data is Data Quick’s release of the numbers for April in California. According to Data Quick (www.dqnews.com), April 2009 in California was a better month in terms of sales volume. Sales increased by 4.8% in April, up over March 2009. Median home prices in California were still showing price declines, but by 0.9%, a slowing of the downward trend. Not great news… but good news.

 
Closer to home, Marin’s numbers are showing more price declines in April, but it’s important to remember that at least half of the sales were for foreclosed properties. The dramatic price declines will last as long as sale inventory is bloated with distress sales. The good news is that these properties are being sold… and eventually this will help.

 
Banks are still not lending as they should. In spite of the stimulus money given to them, in spite of the need for affordable financing, they continue to protect their bottom lines instead of helping home owners. Most borrowers who qualify for the government programs to modify or refinance are still being denied when they apply. Chase/WAMU has set up a location in Oakland where borrowers can meet with a modification “advisor” to try to get their loan modified. While the “advisor” was not very helpful (I went there myself), at least one can have a person to contact throughout the process. I’m recommending that anyone who needs a modification contact their lender directly. I can assist as well… so give me a call if you wish.

 
Mortgage interest rates are still very low, but off the lows of the past months. There is talk of extending the tax credit for FTHBs to others, perhaps for all people who buy in 2009. This could help normal home sales, by folks who hope to move up by selling One thing I like to remind myself in the midst of all this turmoil… what goes down must eventually go back up… so don’t give up your dreams of a better tomorrow!

Below is a table of average square foot prices of Single Family Homes sold in Marin County – calculated for both county as a whole and town-by-town. These prices are based on sales prices divided by the square footage of home. 2005 – 2008 reflect year-end prices and 2009 reflects prices through May 15. All info was compliled through Marin County Multiple Listing Service.y Multiple Listing Service.

San Rafael     536.91      523.35       535.42      493.22       415.64

Novato            423.18    420.51       405.92      361.48        290.44

Yearly Volume of Single Family Home Sales since 2005

(Covering Sales from January 1^st through April 30 of each year)

                Saus    MV       Belv     Tib   CMadera    Lark     SR       

 2005          22        115       14         39        31         26         149        

 2006          15        108         9         31        20          13        134        

2007           22        105        12        37        26         20         141         

2008           11          48         6        27         16         10          99        

2009            8          46          5        12         16         10         77          

              Nov       Kent      Ross       SA    Fairfax   Greenbrae

2005       179          26            6           60         19              15          

2006       146          17           11         50          16                7 

2007       122          23            8          44          25              26

2008       101          13            8          43          16               7

2009        87             4            7          24          14               5

Last week’s stock market rally sputtered to a stop Friday and all three major indexes opened on the down side this morning as anaylsts argue about the validity of the bank stress test results released last Thursday. But this was expected, so I don’t think there will be a major collapse of stock prices this week because of the stress tests. So far this week has been fairly flat in trading.

 
Meanwhile lenders STILL aren’t lending as they should. Nor are they modifying existing mortgages as they should. If you are angry about this and want to take action, I encourage you to write and call your elected government representatives. Your voice needs to be heard!

 
The local real estate market is heating up. Although sales figures are obviously still down comparatively from peak years, activity surrounding sales is up, a good sign. Pricing of listed properties still takes a hit in this buyer’s market, but we’re seeing numbers begin to reflect a slowing of the downward trend. Low mortgage rates are a help since this allows people to better afford Bay Area sized mortgages. I think we really are starting to see a recovery on the horizon, albeit one that has some bumps in the road ahead.

 
Next on the agenda is credit card reform. Long overdue scrutiny of credit card terms is on the Obama table, despite a huge lobbying effort by revolving debt lenders. It’s interesting to note that Capital One is now eagerly raising funds to pay back the TARP funds it received, because CEOs don’t want to conform to government rules and oversight.

 
How does this affect you? The new HVCC law, (Home Valuation Code of Conduct) which puts appraisals under the control of unscrupulous lenders means that Realtors are under more pressure than ever when it comes to property listing pricing. It also means that offers and contracts should allow additional time to close… probably at least 30 days. Major lenders are very slow to process loans right now. Be sure to have backup plans in place if one lender falls through on your purchase deals! Seller carry backs are not being allowed by many lenders right now, so use caution with these if you can. Remember, everything changes eventually. So hang in there!

It sure is interesting to watch Marin’s monthly real estate sales in  different price ranges. I break our market into 4 price ranges and calculate statistics for Single Family homes and Condos/Townhomes separately. The price ranges I use are $0 - $499,999, $500k – $999,999, $1M - 1,999,999, and over $2,000,000. The reason for that should be obvious. However, what doesn’t seem so obvious is the fact that the real estate market is different for Single Family homes than it is for Condos/Townhouses. Most of the statistics you read tend to lump the Single Family statistics with those for Condos/Townhouses which misrepresents both.

Looking  at Marin’s April sales of Single Family Homes we see a disparity in sales activity between the different price ranges (keep in mind that 1-3 months of inventory indicates a sellers’ market; 4-6 months of inventory indicates a balanced market; 7 months or more of inventory indicates a buyers’ market):

$0 – $499,999  price range currently has 41 Active listings. There were 16 sales in April (41/18 = 2.3 months of inventory). 2.3 months of inventory, based on April sales, indicates a sellers’ market. Unfortunately, most of the sales in this price range are either bank-owned properties (REO’s) or short sales (not enough money in the sale to pay off the loan).

$500,000 – $999,999 price range currently has 351 Active listings. There were 50 sales in April (351/53 = 6.62 months of inventory). This price range has improved and is teetering between buyers’ and sellers’ market. More improvement in this price range could bring stability to this price range in the next couple of months. 

$1,000,000 – $1,999,999 price range  303 Active listings. There were 12 sales in April (304/27 = 11.3 months of inventory). 11.3 months of inventory indicates a STRONG buyers’ market.

$2,000,000 and up price range currently has 223 Active listings. There were 9 sales in Apriln(223/9 = 24.8 months of inventory). 24.8 months of inventory indicates a STRONG buyers’ market.

I’ll continue to analyze the market and the small improvements we continue to see in certain sectors of our market.

There are many signs, albeit small ones, that clearly indicate a slowly recovering economy.

http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html?_r=1&hp

http://money.cnn.com/2009/05/05/news/economy/bernanke_jec/index.htm?postversion=2009050510

Low mortgage rates and the implementation of the Obama “Making Home Affordable” program for mortgage modifications are making a dent in real estate gloom. Pending home sales for March were up 3.2% from February and 1.1% over March of 2008 according to the NAR. Meanwhile, first time home buyers are showing interest in buying homes to take advantage of the new $8000 tax credit for doing so by 12/31/09. We’re also beginning to see JUMBO loans with decent rates coming back onto some lender’s rates sheets. Today Fannie and Freddie’s increased “high cost area” loan amount limits are going back up to $729,750, from $625,500. It’s nice to have some good news to share!

 
Have we reached bottom yet? The stock market is acting like it thinks so… with a solid 5 week rally through most of March and another rally today that sent the DOW up 2.6% and the S&P up 3.4% to a four month high point. Stress test results are due Thursday but these may have less impact than once thought since Washington was indicated that none of the financial institutions involved will be liquidated as a result of the test findings.

 
Big changes started May 1st affecting the way mortgages are done. A federal bill called HVCC is prohibiting mortgage brokers from ordering their own appraisals beginning May 1st. This is a terrible change that puts control of property valuations solely in the hands of lender controlled appraisers. We’ve already seen evidence that this will cause more abuse of the home valuation system… and will increase costs for borrowers. Write and call your representatives about this one since it will definitely effect you!

 
So we’re not out of the woods yet, but there are glimmers of light ahead. We still need lenders to lend. And this seems to remain the biggest hurdle for the real estate market and the broader economy. Hopefully lending will increase in May, but stay tuned for updates on this.

Finally, for those of you who are wondering, I am still here. I just needed to take a break from writing this update for a few months due to my workload. Never fear. All is well! I hope you have a great week! Remember, each day is a new opportunity…