FRESNO: Fat Tuesday, Skinny Inventory

Now is the time for homebuilders to open their stalled legacy projects. Beazer Homes recently closed out The Groves at Sunnyside Point, their neighborhood adjacent to KB Home’s Olive Lane new home community located in Sunnyside Fresno. New homebuilders will not have to compete as hard for new home buyers shopping the area.

HOME PRICES
According to the California Association of Realtors, Fresno County home prices increased 15.3%, but sales were down 22.2% from the previous year. Madera County saw prices increase 36.1%, but sales were down 24.4% from the previous year. However, sales are looking up with a 19.2% increase in sales from the previous month in Madera County.

December 2012 County Sales and Price Activity

Median Sold Price of Existing Single-Family Homes

# of Sales

County

12-Dec

12-Nov

11-Dec

MTM% Chg

YTY% Chg

MTM% Chg

YTY% Chg

Fresno

$157,620

$148,240

$136,740

6.3%

15.3%

-2.5%

-22.2%

Madera

$144,290

$113,330

$106,000

27.3%

36.1%

19.2%

-24.4%

Source: California Association of Realtors

UNSOLD INVENTORY & TIME ON MARKET
According to Land Advisors Organization research, unsold inventory in Fresno County decreased 7.3% from the previous year and Madera County decreased 47.4% from the previous year. The median time on market decreased 24.1% in Fresno County and increased 25.4% in Madera County from the previous year.

December 2012 County Unsold Inventory and Time on Market

Unsold Inventory Index

Median Time on Market

County

12-Dec

12-Nov

11-Dec

12-Dec

12-Nov

11-Dec

Fresno

3.8 Months

4.2 Months

4.1 Months

26.4 Days

26.3 Days

34.8 Days

Madera

2 Months

3.2 Months

3.8 Months

64.6 Days

27.9 Days

51.5 Days

Source: California Association of Realtors

FINISHED LOT INVENTORY
Home Buyer demand is escalating fast.  Quality resale inventory is sparse.  If you own 10 or more acres of land in the path of development, you should be at the City processing a subdivision map faster than Mardi Gras beads flying from a balcony overlooking Bourbon Street.  If you are not familiar with the entitlement process please contact me so I can help get you started.

NEW DEVELOPMENT
Fresno developers plan medical campus at Millerton Lake. FULL STORY

Source: Mark Utman, Marketing Consultant, (559) 549-6326

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Central Coast Sales are Climbing!

The Central Coast’s South Santa Barbara County submarket, which includes Carpinteria, Santa Barbara and Goleta, has seen a surge in sales volume to date with 199 closed transactions this past October.  Sales volume is WAY up and our trend line has now officially bounced above our 2005 sales volume numbers.  With all of this activity our current median price of $620,000 has also bumped up 2% from this time last year leaving us with one question … Where is the future inventory going to come from?  With thinning resale opportunities and virtually no foreclosed homes on the market prices are sure to jump again over the next six months. 

So what does this mean for Central Coast home builders looking for land opportunities along the Central Coast?  Finding the right land position has traditionally been very difficult in this supply constrained market so if you are a home builder looking to build along the Central Coast, please contact Matt Power at Land Advisors Organization’s Santa Barbara office at 805.845.2660.

Source: Matt Power, Senior Marketing Consultant, (805) 845.2660

The Bay Area housing market is back on fire… but is it sustainable???

What can we attribute the turnaround in the market too? In simple terms, it’s back to the old supply/demand curve. In the depths of the housing market depression (think back to 2009), many cities were running resale inventories of several hundred homes and typically at least 50% of those homes were in some sort of distressed condition (bank owned, short sale, etc.).

Now, when we look at the market it’s done a complete 180. Inventory levels are down to their lowest levels since the peak of the housing market back in 2005-2006 and the percentage of distressed sales is down significantly from a few years ago. The question everyone should be asking is whether this is sustainable or is the “shadow inventory” of distressed homes about to flood the market and put a damper on things.

In our opinion, given how low the inventory levels are and the strength of most markets, even a doubling in the number of distressed homes on the market will probably not have much of an adverse effect on the market and in some circumstances might actually be helpful. FULL STORY

Source: Steve Reilly, Marketing Consultant, (925) 368-3128

Take a quick look at the inventory and sales levels of many of the East Bay Cities and decide for yourself if we’re in the beginning stages of a long term bull market in housing.

Active Listings Distressed Listings Percent Distressed Avg Monthly Sales Rate Months of Supply Based on 2012   Closed Sales
Antioch 101 55 54% 123 0.82
Brentwood 71 24 34% 82 0.87
Castro Valley 71 12 17% 41 1.72
Concord 73 34 47% 99 0.74
Disco Bay 43 8 19% 24 1.76
Dublin 22 9 41% 27 0.81
Fremont 133 10 8% 122 1.09
Hayward 82 30 37% 97 0.85
Livermore 85 16 19% 82 1.04
Oakley 39 17 44% 46 0.85
Pittsburg 34 19 56% 56 0.61
Pleasanton 67 6 9% 57 1.17
San Leandro 50 12 24% 72 0.69
San Ramon 49 12 24% 61 0.81
Union City 30 13 43% 36 0.83
Walnut Creek 57 2 4% 47 1.23

The Good, Bad & the Ugly in Sacramento

Sacramento Arena Deal is DOA…  After a whirlwind of meetings between the NBA, the Maloof family and the City of Sacramento, the prospect of building a new arena for the Sacramento Kings is officially dead.  In countless meetings held in locations all over the country, the Maloofs agreed on the terms initially laid out by all sides to build a new arena, structure financing plans and establish a timeline for build out.  However, a number of empty promises from the Maloofs finally came to light as the owners did the Texas Two Step with the NBA and the City, revealing that the deal is not feasible, (even bringing in the family’s own economist to illustrate).

Now Sacramento and the NBA both have egg on their face, and the public and the fans have more questions and doubts that the Kings will ever be viable in Sacramento.

Along with the proposed new arena was the potential for a new wave of jobs – construction and permanent – as well as a start to the redevelopment of the Sacramento Rail Yards.  A new arena would have meant new retail shops and restaurants as well as an onslaught of new homes.

All of the redevelopment ideas will have to be put on hold while the City and Maloofs try to sort out their mess.  In the meantime, the people of Sacramento are angry – some prominent business leaders are even calling for the ouster of the Maloofs and want new ownership to lead the Kings to prosperity… we will see what happens.

Now onto some good news…  Sacramento foreclosures of existing homes are beginning to slow.  In fact, the number of default notices filed in the first quarter of 2012 is the lowest since early 2007.  This should be welcome news for both home buyers and homebuilders alike.

Sacramento Foreclosures

In the last several years, new homebuilders in the greater Sacramento area have been building and selling new homes with pricing that is in line with REO inventory, and in some cases even selling below it.  As the REO product has been dumped onto the market, home pricing and new homebuilder margins have been steadily decreasing.  The Northern California Team has even seen some builders impair lots that were bought just 18 months ago.

With the change of wind direction in just in the last couple of months, builders have started to sniff around again looking for deals and build pipelines for 2013 and beyond.  Furthermore, absorption rates have started to tick up as demand for new homes builds upward.

It looks like Sacramento is finally coming out of the ashes and is ready to start the slow grind toward home price appreciation.

Source: Ryan Long, Senior Marketing Consultant, (916) 784-3329 ext. 16

Greener Fairways In Coachella Valley’s Future!

What does a $20M pledge for a new medical school, the opening of a privately-funded law school, and a new four-year undergraduate degree program all have in common?

Answer: The Coachella Valley – All of these bright new developments are occurring NOW within the Coachella Valley!

The Coachella Valley can also boast:

  • Two new private homebuilders have entered the sub-market;
  • Several public homebuilders have closed on multiple finished lot opportunities; and
  • A 25-year real estate veteran backed by “New York money” has  closed on and currently entitling a 7,800 unit community

Home Sales Activity

New home sales: Toll Brothers experienced five sales at its new Alta project, located in South Palm Springs, within the first month of its opening!  By selling homes with a price point range from the mid-$700,000’s to the mid-$800,000’s, Toll Brothers is demonstrating how the high-end home market is returning to the Coachella Valley.

Home Resales:  According to MarketWatch, resale home prices have risen 13% since September 2011. For the first time in years, resale inventory is below 4,000 homes and number of months supply is under four months. Last year in April, over 5,700 homes were on the market (approximately 5.7 months of inventory). While prices are still low, both sales pricing and absorption are heading in the right direction!

Noteworthy Permit Activity

The City of Rancho Mirage has issued more new home permits so far this year than all new home permits issued in the City in 2010 and 2011 combined!

In case you missed it:

Stone James led a panel discussion on land in April at the Desert Valleys Building Association’s economic update, “Cut to the Chase for 2012: Our Economic Future.”  The topics and insight generated from the panel discussion are well-summarized and quoted in an article by Mike Perrault at The Desert Sun (via MyDesert.com). Read the article to see what Stone and his fellow real estate experts had to say: Panel: Housing the Best Bet for New Growth.

Source: Stone James, Marketing Consultant, (760) 219-7227

Central Coast: Full Sails Again for Santa Barbara Realtors

Spring flowers are blooming, the Pacific Ocean breeze is blowing, and South Santa Barbara home sales activity is picking up!  Central Coast resale agents are finding themselves busy again.  Traffic, escrows, listings and pricing in certain areas are all up, kicking the Central Coast’s spring selling season into gear.

The Beautiful Santa Barbara Real Estate Blog reported… Santa Barbara Real Estate through the end of March ‘12 for Montecito, Hope Ranch, Santa Barbara, Goleta, Carpinteria and Summerland:  Comparing the first 3 months of 2011 with the same period in 2012, sales are up about 35% with escrows up over 50% and the median sales price is up bit while the average sales prices is down a bit. Year-over-year the Sales Price to Original Price ratio is within 2% of where it was last year and the Days on the Market for sold properties is within 12 days of where it was in 2011.

An example of the Central Coast’s uplifting sales activity is City Ventures’ East Beach Collection in Santa Barbara.  The 48-unit attached townhome project is seeing impressive sales, with only 5 more to go before completion.  The project has sold 15 homes in 2012 (5 per month!).  The City Ventures marketing team attributes the strong homebuyer interest to the project’s unique location, quality product and the limited supply of new product currently available in the marketplace.  The East Beach Collection is four blocks from Santa Barbara’s famous State Street and four blocks to the ocean.  With no amenities and surrounded mostly by office buildings, the project is in the new hip, up-and-coming area (also referred to as the “funk zone”).

Source: Matt Power, Senior Marketing Consultant, (805) 845-2660

Bay Area Tertiary Markets Recovering? Maybe…

In the depths of the downturn (say, March 2008), the City of Antioch had over 800 active listings of single family homes on the market.  According to the MLS, only 105 homes sold that month, which translated into an 8-month supply of inventory.  Needless to say those were also the months where we saw double digit price declines year-over-year.

Fast forward to today: In the first two and a half months of 2012, 247 homes sold in Antioch, or approximately 98 sales per month.  The current active inventory according the Contra Costa MLS is 103, meaning a 1.1-month supply of inventory!  While this may not mean that prices are going to rocket up anytime soon in East Contra Costa County, it is definitely a great sign that the market has found a “natural” bottom and might have even overcorrected on the way down.

This same story is being repeated in Brentwood, Oakley, Pittsburg and other tertiary Bay Area markets, which were first to fall off the “cliff” a few years ago.

This work-off of resale inventory is starting to show its affect on new home absorptions.  In 2011 builders in East Contra Costa County were struggling to get to 1 to 2 sales per month on average. In the first few months of 2012, absorptions have been running between 3 and 4 sales per month. If this trend continues we expect more builders to begin venturing back out to the tertiary markets to look for new residential land deals.

Source: Steve Reilly, Senior Marketing Consultant, (925) 368-3128