Sonoma Napa Homes Undressed

I think just about everyone is on media overload. Between the roller coaster stock market, the bailout plans, the Presidential elections and the myriad of international crises, we are over the top. It has created a “deer in the headlights mentality”.  Fear is not only controlling the financial markets, it has impacted the housing market, particularly during the last week or two. Many buyers are now on the sideline immobilized by the upheaval, increasing interest rates and larger down payments being required by lenders, especially on jumbo loans (loans over $729,750) “Dreaded” Monday this week turned out to be “cheery” Monday, with a 400 plus point gain on the Dow.  It appears that some of the moves, both domestically and internationally, have begun to loosen the credit markets indicated by the Libor rates declining (the rates at which banks loan each other money).  Bernanke’s endorsement for another stimulus package could have been another factor in changing the pattern of the last several weeks.  However, most experts are predicting continued volatility. There are concerns that we have more de-leveraging to contend with and that lingering weakness in the economy will remain for some time.  A minority feel that most of the wild swings are behind us and that the volatility will subside in the short-term.   Whatever the outcome, many buyers have taken a breather as indicated by the slowing open home traffic and sales. The media persists in painting a bleak picture which reinforces the inertia.  The lower end price ranges are seeing the bulk of the activity.  The majority of multiple offer sales are occurring in this same range. The exceptions are homes that combine three essential factors—updating, staging and aggressive pricing. A $1.249 mil. 3 bedroom 2 bath home in Mill Valley received 2 offers and went over list price. It had the triple threat.   The market has not come to a halt. It is trudging along.  Until buyers fears are allayed and the jumbo loan market returns to equilibrium (more reasonable loan parameters and rates) sales will reflect the pattern we experienced at the end of last year and the beginning of this year—well off the record pace of previous years. In the meantime sellers will be able to move their properties by staging and competitive pricing their homes. This is not the time to test the market. If sellers are seeing little showing traffic they need to quickly adjust their pricing, otherwise they will be chasing the market downward.  Conversely, in most cases, buyers are in the driver’s seat.  Well-qualified buyers have their pick of listings and can certainly find great value.  There is plenty of money available on good terms for conforming loans (those below $729,750). It is a buyer’s perfect storm. The pricing bubble expanded between 2003-2005 and burst in 2006. A new bubble is forming. I call it the “buyer demand bubble” and it is building.  No one knows how long it will take until the conditions are right for it to let off steam. When it does, prices will stabilize and begin to rise once again.  Certainly not with the velocity of the last upward cycle, but if prices appreciate at 2-3% a year we will be headed back to a healthy, balanced market. It will happen and you can quote me on that.

Wealthy Are Afraid They’ll Rub Out of Money

It’s not just the middle class that has money worries.  Even the affluent are worrying about running out of cash.

According to a new survey from American Express Publishing and the Harrison Group, nearly half of respondents with incomes of $250,000 or more agreed with the statement that “I worry that at some point I could run out of money.” That’s up from about a third in April.Fully 69% agreed with the statement that “The recent real estate and banking crisis has affected my sense of financial security.”Of course, $250,000 is only “Obama wealthy.” And running out of money “at some point” is a long time horizon. Yet the survey suggests that even high-income earners are cutting back their spending for fear of what the financial future might bring. Fully two-thirds say that they are “looking closely at every spending category to see where I can save.”

Don’t call it a bailout. Or a depression

Commentary: The nattering nabobs of negativism have it wrong. Here’s why

By Irwin Kellner, MarketWatch

Last update: 10:41 p.m. EDT Sept. 28, 2008

Comments: 657

PORT WASHINGTON, N.Y. (MarketWatch) — We are nowhere near a depression, so let’s stop talking ourselves into one.

Spiro Agnew’s words of the Nixon era ring true today. The politicians, pundits and, yes, the press, are nattering nabobs of negativism.

For example, in recent weeks, the broadcast and the print media have filed stories replete with scare words. You don’t even have to look at the tabloids to see what I mean.

The front page of the New York Times recently described what it called “chaos” in the financial markets.

Not to be outdone, most of the first section of The Wall Street Journal one day last week was devoted to articles describing the “spreading crisis” in our economy.

And both newspapers have run stories using the word “depression” more times than I care to count.

Now, don’t get me wrong, I am not saying things aren’t serious out there, but another Great Depression? I don’t think so.

If you look at the data, you will see more differences than similarities between the 1930s and today:

In the crash of 1929 the Dow Jones industrials (plunged 40% in two months; this time around it has taken a year to fall 22%.

• The jobless rate jumped to 25% by 1933; it is little more than 6% today.
• The gross domestic product shrank by 25% during the early 1930s; it is up over 3% during the past year.
• Consumer prices fell by about 30% from 1929 to 1933; and the last time I looked they were still rising.
• Home prices dropped more than 30% during the Depression vs. about 16% today.
• Some 40% of all mortgages were delinquent by 1934 compared with 4% today.
• In the 1930s, more than 9,000 banks failed compared with fewer than 20 over the past couple of years.

Remember also it was policy errors, not the stock market crash, that caused the Great Depression:

• Instead of increasing the money supply, the Federal Reserve of that era reduced it by one-third.
• Instead of lowering taxes, Herbert Hoover raised them.
• And to channel whatever demand was left into U.S.-made goods, the government enacted the Smoot-Hawley Tariff Act to keep out foreign products; this only provoked our trading partners to do the same.

Add to this today’s automatic stabilizers such as unemployment insurance and Social Security, the FDIC to insure bank deposits and circuit breakers to keep stocks from falling too quickly, and you can see why this is not a depression in any way shape or form.

While I am at it, I would like to take issue with the almost ubiquitous use of the word “bailout” to describe the government’s rescue package.

Folks, this is not a bailout of anyone, not Wall Street, not Main Street, and certainly not the so-called “fat cats.” It’s an infusion of liquidity, designed to unclog the financial markets. In doing so, it will benefit everyone, business and consumers alike.

Also, the $700 billion bandied about will not be immediately handed over to the Treasury secretary; he will simply have a line of credit, similar to what the typical business might have.

Finally, this package may not even cost $700 billion. For that matter, it may wind up costing nothing. It all depends on the price the government pays for these distressed assets and what it winds up selling them for.

As for whom to blame for this mess, there is plenty to go around. In the words of that great philosopher, Pogo: “We have met the enemy and he is us.”

Irwin Kellner is chief economist for MarketWatch, and is Distinguished Scholar of Economics at Dowling College in Oakdale, N.Y.

Is The Real Estate Market Turning?

California Association of Realtors Newsline has an srticle that says that consumer confidence is  on the rise.

Consumer sentiment rose to 56.9 in August, up from 51.9 in July, according to The Conference Board Consumer Confidence Index™ released Tuesday, indicating a slow shift toward an economic recovery, albeit one that analysts predict will likely take until well into next year to fully materialize.

How does this relate to the Sonoma and Napa wine counrty regions?  Properties are selling here, some fairly quickly when priced well. 1375 properties either went into contract or closed escrow in August and while only 723 new listings came onto the market. That’s got to be good news to sellers with existing properties on the market.  Of the 516 properies that sold, average dys on the market were only 94, which is pretty standard from the time a listing agreement is signed until it closes escrow, and the average price is $516,000.  Now, these figures have in their equation the REO’S which take a lot longer to sell and sell for quite a reduced price, so I think the market is still looking very good for seller’s BECAUSE it’s still good for buyer’s. If buyer’s can’t buy, seller’s can’t sell.

“Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating. The Expectations Index, which posted a significant gain this month, suggests better times may be ahead. However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us.”

Good News For California Home Buyers

Here’s some good news for California home buyers and sellers from the California Department of Real Estate- California may be the first real estate market to hit bottom and start back to recovery.  Recent economic developments indicate that California may be the first state to find the bottom, based on the increase in sales volume in the previous three months. In June, home sales rose for the third consecutive month, following a 30-month decline. Although approximately 40 percent of the transactions were foreclosure sales, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that once a neighborhood’s median home price declines to 50 percent from the peak value that the homes in that neighborhood will no longer depreciate.

What does this mean to the real estate consumer, it may just mean a quicker rebound here than elsewhere, happy news to most of the people I’m working with, both on buying sides and seller sides. The concern for most buyers is, will the property they buy today, be worth what they paid for it next month, and I think the answer is looking much more positivly like YES! 

Although California leads the nation in foreclosures, the state’s foreclosure process is more efficient than other states. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow. Which means for sellers there will be less compition from this other inventory. The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.

I’m asked almost everyday,”Is it a good time to buy?” and that answer in my opinion has been yes for a very long time. But now I think it’s starting to look like it may also be  becoming a good time to sell. 

I.E. and I. V. Appeal

The weather this past weekend here in Sonoma, overcast with a little sun, typified the market. I was at an open house on the Jazz Festival week end that should have been packed with people, but had just a drizzel.  Open house traffic, according to Avram Goldman in his Goldman report, slowed from previous weeks, but could have been affected by the reporting period’s warm weather and graduations. The buyers that were out there are eager to find the right home.  The homes that are receiving the most attention are those that have IEA and IVA.IEA is “immediate emotional appeal” and IVA is “immediate value appeal”. A home that has both will end up in the 15% of the transactions that are garnering multiple offers. If a home has neither the chance of selling is zero.   What I mean by IEA is that when you enter a newly listed home you are overcome with the feeling that I could live here—just move in and set up for the house warming party. On Broker’s tour last week I saw two homes in the $1.1-1.6 mil price range. Both homes were attractive from the street, but once you entered they were profoundly different. The first one you entered and right away were hit with canine odors. The house had many traditional features, but all you could focus on is the smell. The rooms were ok, but felt ordinary as the beddings were rather sparse and unattractive. The upper deck had weathered paint and plants that looked as weathered as the deck.  Inviting backyard, but the landscaping unimpressive. Nice spacious home, but didn’t sparkle. The second home you entered and you were greeted with that wonderful smell of fresh paint. It has that clean as whistle feeling. It was professionally staged. The landscaping in the backyard was impeccable. The listing agent asked me if I had seen the listing previously. I had not. She shared that the seller invested over $30,000 in creating what I call IEA. Oh by the way, the house had just received an offer. Before the investment no offer.  Sellers must make the investment. It will bring them a significant return and most importantly a sale. In today’s market you need IEA or IVA, but preferably both. You need IVA which is as important, as buyers know the values.  They have done their homework.

350 Patten Street, Or Your Wine Country Retreat!

It is my privledge to introduce onto the market this amazing Wine Country property. 350 Patten Street in Sonoma’s historic downtown is the type of  property people dream of when they imagine what their wine country retreat will be.
This enchanting light filled has all the essential elements for creating relaxing and enjoyable life here in Sonoma- an artistically remodeled kitchen and great room adjacent to the gorgeous, serene rear yard with plenty of spaces for entertaining and relaxing.
At just a little over two blocks from the Plaza, this home has easy access to the incredible eateries and wineries of Sonoma as well as events like the Sonoma Valley Film Festival, Sonoma Jazz and Food, The Vintage Festival, 4th Of July parade, The Cottage Tour and a multitude of non stop events and activities. This is the type of property any Realtor would be proud to represent, show to clients and to sell.

Homes in Sonoma’s Eastside

Curb Appeal is the art of attraction. It’s that that certain something that makes potential buyers want to know more about what’s inside based on what’s outside. It’s an alluring welcome with a little bit of mystery.

Many  home buyers decide whether or not they want to go into a  house on its curb appeal—the view they see when they drive by.  Curb appeal is the landscaping, hardscape, lighting, the homes exterior paint.  In the most desirable neighborhoods, the majority of homes have immense curb appeal. Curb appeal is the first impressions of a home. And if you are selling a home, it is one of the most important elements to consider.

The homes shown here are in Sonoma’s historic downtown area, considered one of the most desirable neighborhoods in the wine country, largely because of the area’s curb appeal. Interesting architecture and creative landscapes and gardens make this one of the most enjoyable neighborhoods to walk through.

The easiest ways to enhance your homes curb appeal is look at this list and decide where you can afford to improve.

Landscaping, fences, porches, mailbox, outdoor lighting, exterior paint, paths and walk ways, outdoor furniture.

Starting Something New

I am starting something new, this blog, with hopefulness in my heart. My hope is that this can become a place for locals, visitors and people looking to relocate will turn for all types Wine Country information  from local festivals and art shows to places to stay and eat, to real estate news and listings.  I hope that there will be an out pouring of shred ideas and interests and I welcome input and conversation.  We live in an amazing place, really one of the most beautiful, desirable places on the planet, I hope you will share some of your experiences of this wonderful area with me and our blog community. If you have story ideas that you’d like to share, or if you have questions regarding any events or happenings in the Wine Country, please email me at ally.may@pacunion.com.   I hope I hear from you with stories of great restaurants, amazing views, or anything else about this great place we call home.

Hello world!

Welcome to A Blog About Our Community.

This is a local community real estate blog by Ally May. It is part of the neighborhoods Undressed Network of Real Estate Agent Written blogs. It is our hope you will find it an interesting public service. This G rated blog has a quirky name, part of our efforts to inform consumers.

The idea behind using the word “undressed” is transparency. To undress something is to expose it, or make it transparent. The naked truth would be another way of saying it.

I am sure as you visit this site you will enjoy learning more about Sonoma Napa real estate, and Ally.