Realtors cautiously optimistic about housing market recovery

More contracts to buy American homes received a John Hancock in July than at any time in the past two years, up 12.4 percent from this time last year, according to the National Association of Realtors, indicating the housing market may have hit bottom and recovery could be on the horizon.

Looking at contract signings data generally indicates where the housing market is going with a lag time of a month or two between signing and a done deal.

Some evidence of this positive nationwide trend can be seen in Calaveras County, according to area real estate agents who take the good news with a grain of salt.

“I would say optimistically countywide things are looking better,” said Leanne Smith, a real estate agent at Century 21 Tri-Dam Realty in Angels Camp. “Overall, we’re seeing a healthy increase in home sales. As for prices, I don’t feel comfortable saying we’re done. We’re not out of the woods yet.”

Teri Slankard, owner of T. Slankard Real Estate in Dorrington, shares Smith’s cautious approach.

“I tell my sellers that we hit bottom in 2012,” she said. “I can’t pinpoint that actual day or month. We are now in a leveling period. Values are not going to go shooting up for six to eight years.”

“In every textbook every Realtor reads and studies, there are six-year cycles and 18-year rounds,” she continued. “There are six years of prices going up, then they hit a wall and prices drop for six years, then it levels out for six years, she said.”

Slankard emphasized she doesn’t have a “crystal ball,” and a volatile market could upset the apple cart.

“We’re definitely in transition right now,” Smith said. “Right now, it’s really interesting. Things are selling, but I would still say there are areas of our county that are still decreasing in value.”

Smith said on average the greater Valley Springs area was the hardest hit by the housing crisis and has yet to see home values rise, with some values continuing to decrease in value.

According to the Calaveras County Multiple Listing Service, since the first of the year, Copperopolis had 92 properties sell, ranging from about $25,000 all the way up to $1.1 million; Rancho Calaveras had 63 properties sell, ranging from about $39,000 to $247,000; Murphys had 50 properties sell, ranging from about $42,000 to $1.4 million, Angels Camp had 36 properties sell, ranging from about $60,000 to $575,000.

Good news has been hard to come by since the housing bubble burst about five years ago, and the market has a long way to go before making a meaningful recovery.

Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million. That’s still well below the 5.5 million annual sales considered healthy.

One factor retarding home sales is low home inventories. In July, there were 2.4 million homes for sale, down 24 percent in the past year.

“We’re suffering low inventories in all areas of the county, and short sales are on the rise,” Slankard said. “It means a lot of people aren’t listing. This happens statewide this time of year. Sellers don’t want to put their house on the market unless they absolutely have to and most want to get more than fair market value.”

Another somewhat hidden factor affecting home values are reverse mortgages.

“There are a lot of reverse-mortgage homes on the market that are not considered bank owned, but are affecting the pricing,” Smith said.

In some cases, a homeowner got a reverse mortgage on their home when the value was very high. Since then, the value has dropped dramatically and Fannie Mae is now on the hook for that difference.

The presidential election can also greatly influence the housing market.

“Elections will affect buyers,” Slankard said. “Sometimes they hold off until they know who their leader is.”

Last year, many bank-owned homes were going for well below market value and in turn bringing the value of entire neighborhoods down. That’s no longer as common, Smith said.

“It really comes down to which bank it is, and whether it’s a government owned home,” she noted. “Bank-owned homes are holding a lot closer to list price. I’m not seeing a lot of dive bombing.”

That being said, in the third quarter of every year, banks tend to become motivated to get properties off their books before year’s end.

“Buyers can bargain maybe a little bit more if a property has been sitting a little bit longer this time of year,” Smith said.

“People are always looking for deals. We’re Americans. We love the deals,” Smith said. “For better properties, we’re getting multiple offers. Six months to a year ago, multiples weren’t as common.”

A year ago, multiple offers weren’t very common, unless the home had an incredible location and was unique, Smith said, but that’s beginning to change.

Many banks are no longer comfortable allowing properties to sit on the market for long periods, Smith said, and public and bulk auctions are becoming increasingly common. Many properties are only on the market for three months maximum before they get sold at public auction or grouped into a bulk auction that could contain 100 or more properties.

“If it gets to an auction where the public is involved, it could go for 20 percent below list price,” Smith said. “If it goes to a bulk auction, investors from all over the country buy up the homes.”

When analyzing Calaveras County, Smith said she’s pleased to see a steady flow of first-time home buyers making that first big purchase. A United States Department of Agriculture loan that requires as little as $500 down paired with interest rates below 4 percent creates a great environment for getting into a home.

In many cases, Calaveras County residents can look to the Bay Area housing market to see what will eventually happen here.

“Right now the Bay Area is experiencing low inventory,” Slankard said. “They are seeing multiple offers and prices have gone up. That has not happened here yet. It takes a while for what’s in the Bay Area to reach our county. When we came to a screeching halt, it didn’t trickle into Calaveras County for 12-to-18 months. So our recovery may be the same.”

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