Archive for August, 2009
Did you catch Jim Wasserman’s article in the Sacramento Bee last week titled “Competition Frustrates First-Time Buyers”?
To give you an idea of how competitive the market is in Sacramento for first-time buyers, here are a few quotes from several first time buyers and real estate agents:
“It’s been a bidding-war hell. I increased my offer by $12,000 on one, and I still lost out. I was $13,000 over asking price on another and still didn’t get it.”
- Laurel Bane
“You make an offer and there’s already 30 (ahead of you). And four are cash. I’ve had clients cry. It’s a great time to buy a house because of interest rates and the pricing. The problem is getting an offer accepted.”
- Larry Henderson, agent
“Usually, within 24 hours, I have multiple offers coming in. I almost dread it. My phone rings off the hook with people asking if (the house) is still available.”
- Bruce Hammer, agent
That’s what’s going on in this market. So if you’re a first time buyer or someone who wants to get into an entry-level home, what are you supposed to do?
Demand far outweighs supply, and the area’s housing supply is now less than 3 months (meaning, at the current sales pace, it would take less than 3 months to sell off every house in inventory!).
Although we’re primarily a real estate investment firm, we do also have a realty division, so in response to this housing crunch, here are a couple of things we’re doing for our first-time buyer clients:
» We and our investor clients are buying more properties in the most desirable areas for entry-level homes. Most of the properties we acquire are distress properties that need repair, so we buy them, rehab them, and then make them available to our in-house clients. In certain cases, our first-time buyer clients may be able to pre-purchase a home BEFORE the rehab is complete (like how they do it in new home sales); thereby, avoiding the bidding wars, multiple offers, and prices being run way up!
» We’re now focused on ramping up the number of home listings we have. The benefit to our first-time buyer clients? They get first shot at the listings we obtain!
Here’s another form of relief that may be happening soon: We’ve been getting updates from several top REO agents, bank executives, and asset managers that several banks are getting ready to release a good chunk of their repo inventory within the next few weeks.
Just yesterday, one of our sources told us Chase Bank is about to release a whole years worth of their foreclosures! How real is this? Who knows. We’ve been hearing this kind of thing since Spring.
It does make sense though.
A lot of this inventory squeeze seems artificially manufactured by both Federal and State government. The moratoriums, the workout programs, and the pressure on banks to modify loans or do short sales can only last so long.
A good percentage of loan mods end up in default again within 6 months. Short sales are happening more often, which is a positive trend, but they’re still not happening fast enough.
The bottom line? This foreclosure problem is way too big for government to handle. We’re still seeing record highs in NOD’s (Notices of Default), which is the start of the foreclosure process!
Anyway, that’s my opinion. So …
If you’re a FIRST-TIME BUYER, that should be welcome news! Give our office a call if you’re looking for a company to work with that has unique market knowledge, and gives you priority access to exclusive properties and listings.
Happy House-Hunting,
Bill Guting
THE GUTING GROUP (TGG)
“Providing Cash-Flow & Wealth-Building Opportunities in Real Estate”
Phone: (916) 393-5400
P.S. Your comments and feedback are welcome
