"How's real estate?" I'll tell you....

With a long face primed for sympathy, I get asked "How are you doing in this market?" quite frequently. Well-meaning friends and others who know I'm a realtor, assume I am suicidal about THIS MARKET... broke, in debt, and have no one to sell to, sitting all alone in an empty office day by day twiddling my thumbs.

My answer always shocks them. "I'm doing great! I have helped 20 families manage their life by buying or selling a home this year." TWENTY! (Not my record of 55, but enough to give me great satisfaction that my career is still on-track.)

"Who the heck would buy (or sell) in THIS market??? I hear it's tanked. Prices are down. And who would buy these days knowing they may lose their job???? Who has any money to buy?"
Welp.... here's the answer. Who I have sold to this year will tell you what the market is about right now.... who is buying and who is selling....

I started off 2009 with May* and her husband. She had been transferred to So Cal during a reorganization. If she wanted to keep a job, she better move. She had help from her relocation benefits, and had enough equity left over to afford a downpayment down south. (* some unusual names have been changed to protect those whose Mom is a realtor, yet they bought or sold from me.)

Buyer #2 - I love Nate! First time homebuyer, mid twenty's... ready to start being responsible and spend weekends at Lowe's. Bought a short sale, had it appraise for $40K more than he paid. THEN got the $8,000 tax credit, which was more than his $6,000 down payment. And payments less than his rent would have been. Happy Camper! (And by now, master floor refinisher, I'm sure!)

Next.... Chuck and Mary selling their life-long home. He was offered a new territory in Arizona, and, tempted by the warm weather, moved. A first time homebuyer bought theirs - (they got the $8K credit.)

Billie wanted to move across town to be closer to her grandkids. Bought a fantastic newer home from a real seller who actually had equity! Woo-Hoo. Now she Skypes her grandkids from 2 blocks away!

Jim and Mary felt ready for Sun City's "cruise-ship-on-land" atmosphere, so sold their home of 25 years... to a first time homebuyer... who got the $8K credit. I'm sure they are playing golf, instead of mowing lawn, as we speak.

Brian and Wendy moved here from a big home in Colorado, into a stunning newer home with a pool in Serrano. At a shockingly low price. She's a nurse, and he has a great state job.
Next came Shannon and Ron who had 92 year old Grampa living with them, along with 3 kids... in a home so small, they had to go outside to change their mind. They bought a bigger home, with room for all, right next to a park. (Grampa was SOOOOO cute!)

Clay and Pat bought two rentals... convinced that the upcoming economy makes this the perfect storm of interest rates, prices, and tax laws to make it INSANE to not buy rentals now. We're now on the hunt for two more, and Clay's become an expert rehabber.

Stephen, one of my friend's sons, joined the ranks of adulthood by becoming an accountant and buying his first home, all at the same time. Woo-Hoo. And he racked up the $8,000 credit, plus payments comparable to his rent.... BUT HE OWNS IT! Feet up on the ottoman, beer in hand, "Go Niners" reverberating throughout the house...... Life is good.

Josh... another twenty-something first time buyer, took the bus to my office from his state job, and wanted a home near the bus line. We got a great deal, that appraised about $60K more than our purchase price. He also got the $8K credit. Another happy camper.

Bob and Marcy felt the pull of home yanking them back to Fair Oaks after 8 years on the East Coast. A mega runner, Bob wanted a special home where he could fall out the back door and be on our magnificent American River Parkway trail. A little clandestine digging revealed the perfect spectacular bluff home, right on the trail. They move in soon. And you can bet he'll be a happy runner!

Sharon's a teacher, who after owning many homes in many locations, had recently moved back in with 90 year old Mom. Interest rates and prices were just too attractive to keep her at Mom's, so now she's painting and redecorating her own home, adjoining the parkway where she walks every weekend. SHE got the credit, too!

Bob's Dad died this year, and he needed to sell his life-long home. I did it.... for $70K more than his neighbor offered him "to save on the realtor's commission". Bob and his bank account LOVE me.

Scott and Gina moved here from the Bay Area, where they couldn't afford a yard bigger than a postage stamp for their 3 darling active girls. A sports scout, they could live anywhere. Here, they got a first-time purchase - 2000 feet of exquisite beauty on a cul-de-sac, a 3 car garage, and a play structure. Their daughter caught their dinner the other day in Folsom Lake. Happy? Yeah, I'ld say!!!

My friend's Mom moved to a care facility, so I sold her condo to help pay for her care. Unfortunately, Mom passed away during our escrow, but the funds will help pay for care of her husband.

Josh and Melanie... now HERE are happy campers. We've been looking for 2 years. (Yeah, you could say I'm patient) Their son grew up (well, tripled his age, anyway), and they had a new daughter during the time of our hunting. I felt like part of the family. Right before Christmas we closed escrow on their new home, with a pool and huge play structure. They are already deep into a kitchen remodel. The good news is that prices tanked during the time we were looking, and they ended up buying at a rock bottom price with a killer interest rate.

Then there's sweet Sam and Michelle - other first time home buyers, who only put $4K down on their new home, and will get $8K back from the Federal credit. They have already painted, done flooring and have such pride in their own home. They want to expand their family and wanted a home of their own to do it in.

Then there are more, including Craig, whose escrow fell apart when his Mom passed two weeks before closing, leaving him a home. Who needs two? Cancel escrow.

So, as you can see, people buy or sell for many reasons. Death, expanding family, taking on the responsibilities of adulthood, job transfers, changing family structures. Lots of reasons. As a realtor, I love just taking care of my peeps. I chose to not jump into the listing of bank foreclosures, or to specialize in short sales, and instead have continued to focus on what my peeps need. And as you can see, they keep needing to move, buy, sell, or make a change. It's a great business. A good life.

Fair Oaks, California, Home Prices and Sales Activity (5/09)

It's been a wild ride for homes sales in Fair Oaks, California, but for 2 months in a row we have had huge increases in the number of sales.

Sales doubled in March over the preceeding month, from 18 to 38, then increased another 10% in April, to 41.

And all the while inventory has been dropping to it's lowest numbers in over a year. With 42 pending sales out of the 132 homes on the market in Fair Oaks, that's roughly 1/3 of the homes selling in one month.

Compare that to one year ago, when only 1/5th of the homes sold.


But what effect have the increased sales had on the prices, you ask? April saw an overall increase in the average price per square foot from $143 to $149. That's down from a high of $194 last April.

Remember, this is for all price ranges. In general, the lower priced homes are going to sell for much different per-foot-prices than luxury homes.

But one thing is for sure... it's tough to build as cheaply as our homes are currently selling for.

We are in a market that may be the best buyer's market you'll ever see. Low prices, low interest, and some selection.





If you want stats on a specific price range, just holler on over. I can zero in on price for you, or provide stats for any other Sacramento area neighborhood.

Uncle Sam wants to give you free money. $8,000 smackaroos, to be exact.

As if getting to be your own landlord isn't enough, now Uncle Sam wants to give you $8K for buying a home.

Unbelievable? Yes. True, also YES.

But there are ALWAYS catches, right? Yes, but not many.

Mainly that you gotta be a first time home buyer. So, principle residence only, and you can't have owned a home in the past 3 years. Good on that one?... then read on.

You must close escrow on your home by November 30th, 2009, and is retroactive to January 1, 2009.

It has income limits, and starts to phase out at $75K income for singles, and $150K for couples filing jointly.

Can you get it now? Absolutely. You can file an amended return for 2008. Then start spending, baby.

How much? The credit is 10% of your home's purchase price, or $8,000, whichever is less. There is no repayment, unless you sell your home within 3 years.

If you are clever, you are probably asking if you can use the $8,000 as your downpayment. Before yesterday, I would have smacked your nose for being so silly. But hey.... yesterday HUD announced they would make bridge loans availble to buyers who qualify to enable use of the $8K for a downpayment. That is huge. Call me to check on how that is being implemented. It's too new to tell at this point. (Update - they've pulled back on the promise to allow it's use for your downpayment... just one day later. Stay tuned....)

So.... pretty slick, huh? It's a total gift, inspired by the Fed's desire to jumpstart our housing market and get the money flowing again. Why not let a little of it flow into your pocket?
For more details, check out the NAR site .

flickr photo by 13 faves

Video Tour of Fair Oaks, with Sally Dunbar, Your Fair Oaks Realtor.

I've been living in and loving Fair Oaks since 1979, and I can't think of a place I would rather live or raise my kids. That's why it's my favorite place to sell real estate. Join me on a brief video tour of my Fair Oaks, the way I love it. I filmed this in April of '09 during a glorious week of Springtime weather.

For more information on Fair Oaks Homes for sale, give me a call, (916) 535-0356, or search for homes at www.SallyDunbar.com. (I do list and sell homes throughout the Sacramento area, but now you know my bias!)

Is this the time to buy? What if prices drop more?

Buyers are panicking at the moment. They are running out of homes to buy!

In Sacramento there is only 2.3 months of inventory under $300K (if buyers maintain their present rate of snapping up homes, we'll run out in 2.3 months).

In Fair Oaks it's not much better... 2.4 months to sell 'em all out.

That means if no new homes come on the market, we'll be out of homes by summer. Basically economics says when supply goes down prices go up.... like skyrocket up, in this case. EEKKKK!

HOWEVER... don't look now, but there is a wall of new inventory charging from behind. Maybe an avalanche of homes. You see, California has had a moratorium on foreclosures since December of '08, which means very few new bank foreclosures (REOs) have come for sale. And the moratorium keeps being extended.

In the mean time, many owners are getting further behind on their payments. What seemed like a good idea to give the poor homeowners a break, allow banks time to adjust to the new regulations, and to encourage loan modifications, has also let the steam build up. Foreclosures are backing up, and when they blow, it could be big.

There are currently 7,648 homes scheduled for foreclosure in Sacramento County, according to Foreclosureradar.com. There are another 3877 in default. Currently only 1139 REO's are listed for sale. You do the math!

What effect will this rush of REO inventory have on our market? Well, professor.... I think when supply goes up, prices go down, right? Very good... You get an A.

So where does that leave a buyer today? Do you buy, or wait?

The answer revolves around interest rates. Right now, they are UNBELIEVABLE. Like 5% and below. A 1% increase (to 6%) would result in the same payment as a 10% drop in home prices. Shocking isn't it? So you get a loan today for $200K, you'll pay $1074 per month principle and interest (approx). Prices drop 10% and interest goes to 6%, you'll pay $1079 per month for your $180K loan! The same, only different.... no, the same. (OK, I'll throw in the extra 5 bucks).

So my answer is Yes... go ahead and buy now. IF you can get one! Interest rates are a huge component of the mix and can't be ignored. Throw in the effect of the up-to-$8,000 Federal Tax Credit, and you can't loose (only 7 more months on that one). And even if the onslaught of REOs bring prices down more, you will most likely be ahead in the payment game, since you got such a good loan.

Flickr photos by Krassy Can do It. (Can do what? Buy a house?... Call me, Krassy!)

Sacramento Area... On Sale and On Fire!

My broker just returned from the Realty Alliance conference, which are the top 100 independent real estate brokers in the nation. Sacramento was the "talk of the town", he said!

We are apparently giving the nation hope that we are turning the corner in this market, with our booming sales. We were one of the first to be hit during this "Repo Madness" which is sweeping out nation, with a record drop in prices, but it looks like we are the first to be coming out of it.

Our county-wide inventory is down 58% since a year ago (8968 to 5251 currently). Our price per square foot is down 29% (161/ft to $115/ft currently), and appears to be leveling off. We are down to 3.4 months of inventory, from a high of 11.2 months back in Jan of '08.

Sales for the past 4 months are furious, with 39% of our listed homes entering escrow in February '09, compared to 14% last February. This is truly phenomenal.

What does the future hold?... who knows. But for now, interest rates are at an all time low and the buyers are coming out of the woodworks enticed by the sale prices we have. It's fast, furious... heck, we're on fire!

It's a great time to be a buyer!

Interest rates and your home... THESE are the "good old days".

You've probably heard that interest rates are pretty good now... around 5% for a "30 year fixed". But check out what that means to you as a buyer. It's pretty shocking!

A $200K loan at 5% costs you $1,073 per month P&I (principle and interest)

If you want to keep that payment at $1073, here's the price loan you can afford if interest goes up.

6.25% = $174,000 - (2002 interest rate)
8.5% - $139,000 - (2000 interest rate)
9.25% - $130,000 - (1994 interest rate)

15% - $84,000 - (1984 interest rate)

Still wishing for the good old days? As a buyer, it's better today than it's ever been. You get WAY more for your money than ever. We will look back on these times as the best home buying days in our lives!

Flickr photo by Steve Wampler

What's Happening with Fair Oaks Home Prices?

If you missed buying a Fair Oaks home back in '02, those prices are back! After a high of $250/sf (per square foot) in August of '06, Fair Oaks prices have dropped approximately 38% to a stunning $155/sf. That is lower than the cost to build a home, yet it includes the land! We have not seen such a buying opportunity for a long time.

How does that compare to the hit the entire county has taken? Has Fair Oaks done better or worse? Much better, thank you. During the same time period, Sacramento County price per foot dropped a whopping 54%! EEKKK! They went from a peak of $250/sf in August of '05 to the current level of $117/sf.

But here's the best news for buyers. Interest rates make this the most amazing time we have ever had to buy. If you get a $200K loan today, you will pay around 5% interest, or $1073/month, (principle and interest on a 30 year fixed rate loan). Look what happens if the interest rate were higher on the same $200,000 loan.

5% = $1,073 today's rate

6.25% = $1,231 (2002 rates)

8.5% = $1,537 (2000 rates)

9.25% = $1,645 (1994 rates)

15% = $2,528 (1984 rates - yeouch!)

An interesting side note, is that in '02, when Fair Oaks prices were at today's level, the ensuing 3 years saw prices jump an incredible $100/foot. That means if you owned a 2,000 sf home in '02, by '05 it was worth $200,000 more. That's pretty amazing! Will that happen again? No one really knows. And in my experience, it's not predictable... but it IS possible.

So what does all this mean? It means homes are dirt cheap, and that Fair Oaks has been a much better value than the county in general. And compared to the stock market, it's not so bad. There are those that say today is the best buyer's opportunity we will see in our lifetime.

Flickr photo by fpsurgeon

Locking your loan is like proposing... You don't know if it could get better.

I just read that the Fed's actions today may cause mortgage interest rates to drop up to 1/4 or 1/2 point. Interesting dilemna for those in escrow who have already locked their loan. Do you stand by what you said, or weazle out because rates have changed?

When you lock your loan, you are gambling that interest rates won't go down any lower.... to protect yourself in case they go higher. So to be safe, if the current rate is OK with you, you and the lender commit to it... regardless of future rates being higher or lower. If they go higher, you still have your low rate. If they go lower... it happens.

Can you get the cheaper rate if they drop below your locked amount? Not without someone suffering a loss... because the lender has committed.

It's like proposing. You ask the girl of your dreams to marry you. But criminy... what if someone better comes along? Well, what if someone better never comes along, and you missed your only true chance at love because you couldn't read the future? You make the best decision, then stick with it, through sickness and in health. Whether interest rates go up or down.

I have a young first-time buyer who is locked right now. I told him he needs to have confidence in his decision. if rates go up, he'll think he's an omnipotent genious. But if rates go down, that's just the way it goes... it's the cost of protecting yourself. He understood. This buyer has tremendous character... I really like him. And I'll bet he's fine with his decision, even if rates drop lower. To me, it's called being responsible for your decisions. I bet he'll stick with the gal he marries, too.

PS... it's a little later in the day. My buyer just signed disclosures and I asked him how he feels now that interest rates DID in fact go down. "I'm OK... I made a deal to protect myself in case rates go up... but they went down...I'm still protected because they COULD have gone up. I'm OK." I just KNEW he would say that! He's such a good kid.



Flickr photos by Jacob and Kiki Hantla, Wooleywonderworks

Does Your Lender Make a Difference?

When a new buyer chooses a lender, what is their choice based on? Interest rate?, the trust of a referral?, who has the prettiest sign? Often it's who seems to have the cheapest interest rate. What a mistake!

Consider Captain Sulley. He looked like everyone else who flew. He always landed those planes, so it's hard to say how good he was. But when disaster hit, he was able to pull off the miraculous, and land a giant engineless jet in the cold frigid waters of the Hudson River. He used his years and years of experience, training, drills, and lessons learned from the inevitable mishaps he must have faced before to pull it off.

Your lender is the same. They all seem comparable... until disaster strikes. And when it does, you want experience on your side. A few months ago I sold a home in a great neighborhood of Citrus Heights, located 1/4 mile from a very seedy street (one of our areas worst). Any local appraiser would have understood to not use comps from the seedy street, as it was insulated from my buyer's home by geographical factors. But as the crow flies, it's another story. Our appraisal came in fine... actually above our price. It was the desk review that shot us down. It came in $60K low! Why, because the out-of-area underwriter used a zillow-like process to estimate the value... which included sales within a bull-eye radius. And that meant our seedy street became our comparable.

But my lender has been doing this for over 30 years, and understands the ins and outs of lending like the back of her hand. She whipped into action, and got the loan through. Did she use magic?, coercion?, bribery?... no. She used her experience to know which of the many paths to take to make it work. She could have gone a number of different directions, but she knew exactly the turns to make at each fork in the road, as she led our transaction down the path to a closed escrow.

So don't just pick the lender with the cheapest quote. It could mean the difference between getting your home or not. Always go with experience. Don't know who to call?
CALL ME... I GOT PEOPLE!

flickr Photo by mpflies2 & theevilmightyf

How Do You Buy a Short Sale? First... What is it?

Buying a short sale is very different than buying a bank foreclosure or from a regular seller. So first... what is it?

A short sale is when the owner is "upside down" or owes more than the home is worth. In order to sell, he would need to bring cash to escrow to sell, or would need the banks approval that the bank will accept less than the amount they are owed. In order to accept less (accept a short sale) the bank must convince themselves that the home is actually worth less than they are owed, and that there is no other way they will get the lost money out of the owner (like from money they have in savings, or an IRA, or another home they own).

The process goes like this. First, the real estate agent puts the home on the market. The list price has no relation to what is owed, and is probably listed somewhat low for the market, in order to get an offer. The list price is their "bait". Once they receive an offer, they send it in to the bank, along with an application from the seller. The application contains the reason why the seller feels the bank should let them off the hook. Their tax returns, bank statements, and a letter explaining what their hardship is are all included. The hardship must be a medical problem, divorce, forced relocation, job loss, etc. It can't just be "I'm upside down and don't want to keep paying".

Now here's the kicker... the bank takes as long as they want to decide what they are going to do. It's usually a minumum of 60 days. But it can be 4 months, like my last one!

But let's say the bank comes back in a record 30 days and says they will agree to let the seller off the hook... they agree to a short sale. At this point they come back with the price they need to sell for in order for them to agree to the short sale. It's rarely the same as the list price. I'm in contract on one now that was listed for $161K, the bank came back at $182K. The other one I'm in escrow on was listed for $214,500, and the bank came back at $240K. The bank deteremines the price they will accept (if they accept the seller for a short sale) after they have done an appraisal, regardless of what the list price was.

OK, moving on... so let's say the bank has told the listing agent they will do the short sale, but for THEIR price, which they give the listing agent. (It's actually more complicated, because they actually give the agent a "net" number, which the agent has to compute into a sales price, considering all the liens and other charges.) The agent goes to the first person who submitted the offer to see if the bank's offer is acceptable. (That's because the first acceptable offer is in contract with the seller.) Many times, it has taken so long the first buyer has already found another home and moved on. Or, if the price comes back higher, the first buyer may not qualify at the new price. Or don't want to. So, if the first buyer passes on the bank's offer, the listing agent then calls the other agents who have made offers to see who else is interested. At that point they can choose the offer that will net the bank the amount they need, and the one that seems to offer the most likelihood of being able to close.

THAT's the person who will end up buying the house.

At the point the new person says YES, the inspection time periods begin, and that's when you really have a good look at the home from an inspector's viewpoint... but we'll save that for another discussion!

Bottom line -
* It may take months to get an answer.
* There's no guarantee what the price will be , regardless what the list price is.
* It's somewhat of a crapshoot as to who the buyer will end up being.


What it takes to be a successful short sale buyer is patience, and to not have a pressing timetable. It also helps to not expect concrete answers from your agent, as they are hard to come by. But you can be successful.... just hang in there!

Flickr photos by doug8888, seekyu, flexyourhead, thinkpanama

Should you inspect new construction?... HECK YEAH!

It's tempting to save $400 - $1000 when you buy a brand new home by forgoing an independent inspection.  "Heck, it's brand new... what could be wrong?"... Right?... Wrong!!!

A few years ago I sold a 2 million home in Los Lagos, Granite Bay.  Simply beautiful... and built by a well known, outstanding builder.  He was somewhat offended when I had my buyer pay for an independent inspection, but I explained the inspector would be the eyes for all of us, to prevent problems for all of us in the future.

Was it worth it?.. spending $750 (in this case) to inspect something the building department had already approved?  Well.... the beautiful custom box beam ceiling had a fire sprinkler system installed overhead.  However no one had finished connecting the pipes!  A disastrous water leak all over the custom box beam ceiling was just waiting to happen.

The builder thanked me!  Imagine the hassle, inconvenience and potential litigation had the pipes leaked after the buyer moved in.

So, yes... an inspection of  new construction is a good idea before you purchase.  Just think of it as cheap insurance!

Flickr photo by Scott Hargis

A Duplex vs a Halfplex, what's the diff?

Halfplex... duplex... they both look the same. But there is a difference. It starts with the dirt. When you own a piece of land, it has a parcel number. Typically each home has it's own parcel number, which is it's lot.

A Duplex... has one parcel number.... it is one whole "home", and can only be sold as one unit. So if you bought a duplex, you would get the other half along for the ride! The same owner owns the whole thing... always. There might be only one water meter, or one electrical meter, depending on how it was built.

A halfplex... looks like a duplex, but it has 2 parcel numbers.... it's actually 2 separate lots. So there are two different owners, or one owner might own them both. But the key is, that one side can be sold to someone else. Each side has it's own utilities (water meter, electrical meter etc.).

A duplex costs more (like twice as much) because you are getting twice as much. You control the entire unit and control the maintenance as well. So if one side needs a new roof, you make the decision to roof the entire thing. And when you paint, it ALL gets painted.

With a halfplex, if you need to re-roof, you may or may not get the other side's owner to re-roof at the same time. Or what if you want to paint a certain color? The other half may not agree. I've seen halfplexes where each side has a different roof type, and different, and contrasting, paint color schemes. It can get clown-like.

Why do people buy halfplexes?... because they can get into them cheaper (close to half the cost of the entire duplex). They get the feeling of a home, usually with their own yard, but for less money than they would pay for a separate house.

Still confused - let's just go buy one and you'll find out in a hurry what the difference is!

flickr photo by battling apathy

One of My Favorite Sales.... Lemon Street, Fair Oaks

This gorgeous home on Lemon Street in Fair Oaks has been in and out of my life many times. The first time I sold it, was for the family that built it. I was so moved by the stories of their life there. Like the Easter egg hunts in the garden... the slip and slide parties down the hill side... the bonfires in the pasture... and prom night dinners in the gazebo.

It was built to house their gigantic family, with amazing thought to detail. Like the deep closet by the garage door, so sports paraphernalia didn't turn into household decoration. And the 7 cubbies lined up just beyond the pantry, so backpacks would have a home somewhere other than, well, everywhere. This was built as a HOME, not for speculation.

I remember sitting in the living room during one open house, a quiet lull in buyer traffic. I absorbed just being there. What struck me the most were the little love notes tacked to the quiltplanning board... sentimental tokens of love for a wonderful Mom. And her quilts decorating the hallways... made with painstaking detail, as these same loving kids looked on. There was a couch set up in the bay window of her quilting room, the favored spot for Dad to enjoy his morning coffee & paper... while she quilted.

It struck me how much love and family life that home had seen, and I have to say it overwhelmed me for that moment. With teary eyes I wrote them a note about it, impressed with the commitment they had made to family. I was careful to point out that I was not an obsessed stalker, but just someone who appreciated and GOT the wonderful family they had created!

I sold the home eventually, happy they would be moving on with their plans, but sad to loose my involvement. It wasn't my buyer, so Lemon Street was gone from my life.

But funny how things turn out. After a number of years, I got a wonderful phone call from the current owners, to help them sell the home. One of my favorite homes was back in my life again!

It was really like a homecoming for me, like meeting up with an old friend. And quilting is still a part of it, as the home on Lemon Street becomes one of the threads that weaves the fabric of my career. It has added to the texture.... to the patchwork of experiences that makes up my career.
...and I still love the home......

Flickr photo by karen