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October 28, 2006

Surplus Homes Help Keep Area Rental Rates Low

©Sacramento Bee, 2006

Sacramento-area renters continue to pay some of California's slowest-rising rents, even as the monthly payments have risen sharply the past year in most of the state's other major cities, according to an apartment industry researcher.

The reason: more supply than demand in a Sacramento region that built thousands of new apartments in recent years. The area's 94.2 percent occupancy rate -- barely up from 93.9 percent a year ago -- is the lowest for all of California's 23 largest metro areas, according to Novato-based RealFacts, which tracks trends in the apartment industry.

Industry experts also report a growing surge in single-family homes being rented as owners tire of trying to sell them in a sluggish housing market. That trend has actually led to lower rents in some cases and is likely to play a significant role in keeping apartment occupancy rates lower.

"I've actually seen rents go down," said Sheri Lutrrell of Sacramento-based Pacifica Management, which leases houses. "Even my real strong markets like Gold River, I'm lowering them $200 or $300."

Janet Regan, a broker with Citrus Heights-based Horizon Properties and president of the Sacramento chapter of the National Association of Residential Property Managers, said some home sellers are giving up.

"We use to have all these different reasons why people put up their houses for rent. Now it's, 'I can't sell my house,' " she said. "These are people who have moved to other cities and other states. They're stressing."

According to RealFacts, the region's average monthly rent at apartment communities was $948 in July, August and September, a $24 increase from the same time last year. Monthly rent averaged $710 in Yuba and Sutter counties. The highest rents for the 378 large area apartment communities surveyed by RealFacts was $1,250 in Davis and $1,169 in Folsom.

Statewide, rents average $1,339 a month.

The combination of supply and demand factors is pushing the region toward a fourth year of slow-rising rents, even though analysts have maintained through much of 2006 that the trend is nearing its end.

Now, Barbara Lemaster of Sacramento-based M&M Property Management, one of the region's largest apartment managers, believes the trend to slow-rising rents may end after the winter months.

"I have clients who live in the Bay Area and say rents have gone up. I haven't seen it happen yet," she said.

Rents have risen just 2.6 percent the past year in El Dorado, Placer, Sacramento and Yolo counties, and 1.3 percent in Yuba and Sutter counties, RealFacts reported.

That compares with a 10.4 percent rise in San Jose, 7.5 percent in the overall Bay Area and 7.4 percent in Los Angeles and Long Beach. Rents also have risen 6 percent or more in Bakersfield and Riverside-San Bernardino as more residents compete for fewer apartments.

Data for Amador and Nevada counties were not available.

"Sacramento definitely has lagged, particularly when you compare it to the Bay Area," said RealFacts spokesman Chris Bates.

An estimated 35 percent of households in the capital region rent.

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October 25, 2006

Default Notices on the Rise

©Sacramento Bee, 2006

The number of homeowners on track to lose their homes after missing at least two mortgage payments continues a yearlong rise across California and much of the capital region, new pre-foreclosure statistics indicate.

Notices of default in July, August and September -- the first indication that homeowners are having trouble paying their mortgages -- more than doubled over the same time last year in most of the region's eight counties, according to La Jolla-based DataQuick Information Systems.

"There's always a certain amount of financial distress out there. But it's no longer being masked by home appreciation," said DataQuick analyst Andrew LePage.

While the numbers are up from historic lows of last year, they remain well below 1990s highs in all but Placer County. Placer County's 443 notices topped the county's previous record of 322 in the first quarter of 1996.

But DataQuick officials noted the county has more than doubled its numbers of homes since the early 1990s.

Sacramento County's 1,388 notices during this year's third quarter were more than 1,000 fewer than its previous 1997 quarterly record of 2,441.

Yolo County's 101 notices were 62 below its second-quarter 1998 peak of 163, while El Dorado County's 120 were below a quarterly 1992 high of 167.

Comparisons were not available for other area counties.

Statewide, DataQuick reported 26,705 notices sent by lenders to homeowners after missed payments in July, August and September, more than double the lows of the same time last year.

Traditionally, only 5 percent to 6 percent of default notices end up in foreclosure. But the percentage is growing with the state's housing downturn. DataQuick said 19 percent of California homeowners who found themselves in default earlier this year lost their homes to foreclosure during July, August and September.

"Most people still get out of it by selling the house, paying off the lender or somehow managing to get their payments current," LePage said. "Most people avoid foreclosure sales."

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October 20, 2006

'07 Drop in Sales, Prices Predicted

©California Association of Realtors, 2006

LOS ANGELES (Oct. 18) – The rate of home price appreciation will post a modest decline next year following several years of steep increases, while the sales pace will decrease as the market stabilizes throughout 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2007 California Housing Market Forecast" released today. The forecast will be presented this afternoon during the California REALTOR® EXPO 2006 (www.realtorexpo.org), running from Oct. 17 – 19 at the Long Beach Convention Center in Long Beach, Calif. The trade show attracts more than 12,000 attendees and is the largest state real estate trade show in the nation.

The median home price in California will decline 2 percent to $550,000 in 2007 compared with a projected median of $561,000 this year, while sales for 2007 are projected to decrease 7 percent to 447,500 units, compared with 481,200 units (projected) in 2006.

“The housing market clearly downshifted in 2006 from the record-setting sales and robust price gains of the last few years,” said C.A.R. President Vince Malta. “The residential real estate market in 2006 was characterized by a gap between buyer and seller expectations. Sellers sensed that the peak of the market was approaching, yet still hoped to obtain the highest possible prices. Buyers’ sense of urgency waned as the number of homes on the market grew and they took longer to identify and subsequently purchase a home.

“Although the 2007 sales decline is not expected to be as steep as what we experienced this year, the psychology of the market -- matching the differing expectations of sellers and buyers -- will continue to be a factor as REALTORS® help consumers navigate their way through a changing market.

“While we’re projecting a modest decline in the median price of a home, over the long term, residential real estate in California has been and will continue to be a solid investment. Since 1968, the long-term average price appreciation is 9.1 percent,” he said.

“While we recognized that the frenetic sales pace of the past four years could not continue indefinitely, the housing market in 2006 did not fare as well as we initially expected,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The anticipated slowdown that began in October 2005 was heightened by dual natural disasters in the Gulf Coast, a significant drop in consumer confidence, rising energy and raw materials costs, and a series of Federal Reserve interest rate hikes that began in June 2004. Fixed-rate mortgages also hit and passed the psychological threshold of 6 percent, while adjustable rate mortgages passed 5 percent, ultimately causing a decline in affordability. Affordability concerns also will continue to constrain sales for many households in California throughout 2007, especially for first-time home buyers.

“Looking to 2007, we expect that some regions of the state, including the Central Valley, San Diego and Riverside/San Bernardino regions, will experience sales declines greater than the state as a whole,” she said. “That also holds true for several second-home markets, including the desert areas of Southern California and the Wine Country.”

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October 19, 2006

Home Slump Deepens

©Sacramento Bee, 2006

Home prices are still falling -- and this time it doesn't matter where you live.

Three months after Sacramento, Placer and San Diego counties topped California for falling prices, the malaise has spread across the capital region and parts of the Bay Area and Southern California, new September sales figures show.

All eight Sacramento-area counties reported lower median sales prices in September compared with the same month in 2005, the first time declines have become so widespread since home sales prices began falling a year ago...

read the entire article here

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October 13, 2006

Characteristics of a Successful Seller

On this live appearance on Sacramento and Company Jeff reveals what a "4-Star Seller" is and why it's important to possess these characteristics when you sell your home.

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