Folsom

We are half way through 2011 already!  It is always good to see the trends in our local real estate market.  Unfortunately, prices have gone down since last year, but everyone pretty much knows that.  We all hope this is the bottom and things will begin to stabilize from here.  Below is the current statistics in the Folsom area.

• Average Sold price – $349,000
• Average Price/sq ft – $153
• # of homes sold – 85
• # of pending homes -  126
• # of homes on market -  172  

The chart below show the trends for the past 15 months.  As you can see our inventory is down, and sales are up.  Typically this would mean prices should increase by virtue of supply and demand.  But in this market one never knows.  

Cheryl

Short sales and foreclosures are not always the final solution in resolving the debt to a mortgage lender.  Under certain circumstances, the mortgage lender can continue to pursue the former home owner with a deficiency judgment.  This is the difference between what was owed and the payoff received.

Starting this year, a new law will help protect the home owner from a deficiency judgment with a short sale.  SB 931 passed and went into effect January 2011.  Here is what the law reads inpart.

“No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.”

Ok, legal language.  But this appears to mean a 1st TD will not be able to collect a deficiency judgment after a short sale.  It does not appear that this law will pertain to 2nd TDs.

If you are in foreclosure proceedings or a short sale, it is HIGHLY RECOMMENDED you talk with a real estate attorney for review of your loans and what/if any obligations, judgments, or tax ramifications may apply to you and your situation.

Short sales have been around for many years, but our recent market has brought this type of transaction to the forefront.  Many people have some understanding of a short sale, but let’s review the basics.

A short sale is a transaction where the seller does not net enough money from the sale to pay off their lender.  Thus, they are shorting their lender…..short sale.  The big catch, the lender has to agree to the short pay off.

It is the seller and listing agent’s job in the short sale to convince the lender it is in their best interests to accept the short pay off.  This means showing the lender they will suffer less monetary loss with selling short than foreclosing.  This is done by getting a fair market offer for the purchase of the home, providing seller financial information demonstrating they can no longer afford the home, and they have no other alternative but short sale or allow the bank to foreclose.  Foreclosure is an expensive legal proceeding that requires attorney’s and trustees, and then the bank will have to sell the property anyway.    One can generally assume a short sale will be more attractive to the bank than foreclosure.

Conceptually, short selling is quite simple.  In reality, the process can be hugely complex.  Why?  First, there are an incredible number of homes in this process and the banks have been trying to catch up with the tsunami of short sale requests – a huge back log.    Then, there are all the additional entities that have an interest in the property – 2^nd trust deeds, HOA’s, utility companies, property taxes, mortgage insurance, etc.  These groups need to be paid or agree to a short pay off as well.  The more groups that are owed money, the more complex it can get.

Short selling requires strategy, knowledge of foreclosure laws and timelines, experience, and very close attention to detail.  These are not for the average real estate agent and that is why the national average of short sale closing is about 40%.

I close 95% of my short sales.  The agent really matters in a short sale.

The fall of 2010 has seen some increased activity in the Folsom market.  We have more homes pending in October and November than summer and our closings have been holding steady for the past few months.  We have ample homes on the market but some of these are short sales still listed as active but with buyers waiting for bank approval of their offer.  The average price per square foot has decreased slightly over the summer and fall, but we are seeing an increase of distressed properties in our market. 

Here are the actual numbers for November 2010:

• Average sold price $362,000
• Average price/sq ft – $165
• Homes sold -56
• Pending homes – 78
• # homes on market –  278

It will be interesting to see what the December stats look like to end up our year. 

Cheryl

Welcome to my blog site discussing the Folsom area and our local real estate market.  I hope you will find my site both interesting and informative and would really like to hear from you.

I thought I would begin by saying that Folsom, CA is a great town.  Folsom was founded during the mid 1800 gold rush era and pretty much was a rough and tumble place.  It took awhile to tame the town and we have managed to save a bit of our past history in “Old Town” Sutter Street.  Sutter Street is currently under renovation to preserve and enhance our celebration of the city’s history.  Completion is set prior to the holiday season 2010.

At present, Folsom is a beautiful thriving city set on the American River.  We boast superior schools with high school API index in the 860 range and ranked 10 (on a scale of 1 – 10).  www.fcusd.org  We have attracted major employers including Intel, Kikkoman, Cal ISO (the energy grid).  We have a gorgeous new outdoor shopping mall near completion, and of course our beloved Old Town area with historic shops, restaurants, and museums.  We have Folsom Lake College, miles of trails for hiking and biking, a ballet company, and the list goes on. We way more than a bedroom community!

Our neighborhoods offer homes for varied lifestyles and budgets.  The real estate market has decreased throughout the Sacramento region, but Folsom has suffered less than many other areas.  We have homes on the market starting in the $100,000 range and top out over $1,500,000.  You could say, there is a home here for everyone! 

I am a Folsom raving fan.  Folsom really is a great town.  See the Folsom website for all things “Folsom”. www.folsom.ca.us 

Cheryl