Humboldt County, California Real Estate Statistics, July 2011

How is our local real estate market in Humboldt County, California performing, in the midst of all of the gloomy national and world economic news? Kinda yucky.


Our housing inventory, the number of homes for sale on the market, has been creeping up all year. We're not high beyond normal, but we are high enough that we might start seeing some downward pressure on prices.

The more homes we have that are selling, the better support we will have for prices. While we are up off of some of the scary bottom figures we've seen earlier in the year, we are not selling so many homes that it looks like prices are going to start moving up again any time soon.

And sure enough, our average sales price continues our ooze downward. Our average sales price has been lower than the year before for 5 of the last 7 months, and 25 of the last 31 months. But don't panic. This too will pass. We won't know it's the bottom of the market until we've already passed it.

The median price has graphed similarly to the average price.

There is no little man that comes out and rings a bell on the day that the market hits bottom. It could be next month, or today, or last week. We have a great selection of homes, the best interest rates in years, and you gotta live somewhere. And rents are very strong relative to price. We will look back some day, and say, "I sure do wish I had bought real estate in Humboldt County in ___," and there will be a date in that blank. We just don't know if it's today's date, or tomorrow's!

Good Video, Bad Video, for Luxury Homes

The marketplace is changing, and no place faster than real estate. One of the hot new developments in the marketing arena is the use of video. All of the guru’s are saying that we as Realtors must use video to show off our listings. Is this a good, necessary thing? If it’s done correctly, yes!


Many agents are using smart phone technology to do a video “walk through” of their listings. Beware. These are often of a poor technical quality and not well thought through. I’ve actually experienced the beginnings of motion sickness after watching some of them, and others don’t really give a good overview of the selling features or the feel of the home.

Other agents are using photo viewers to give the appearance of video, utilizing the basic still photos they’ve already taken of the home. This serves the purpose of “using video,” but little else. On several occasions I’ve noticed people standing, frozen, in the “video.” This is no better, and perhaps worse, than some good, quality photos.

Video shouldn’t take the place of good photos or virtual tours, but should show off an aspect of the home that can’t be captured through these other media. Video is great at showing movement and character and interaction. That’s why I employ a professional videographer experienced in the medium. He can capture the features and ambiance of the home in a way that best shows it off to prospective buyers.


Sometimes he will interview the owner or builder of the home, using their vast knowledge of the property in a tour through the home. (See the video link at www.6243Rohnerville.com for an example.) This enables us to communicate a historical or personal angle easy to miss through traditional media. It also allows the seller or builder to highlight features that only he knows about.

Other times my videographer will video the actions of the home itself. A fire burning in the fireplace; a creek rippling across the land; wildlife admiring the view; raindrops falling on a pond; trees swaying in the breeze; waves crashing on a beach. All very provocative images that help imbed your home in the hearts and minds of potential buyers. You can see a great example by pressing the video link at www.290Barley.com .

Other times he will create a webisode, a program featuring characters and a plot line, with the house as the star. This shows people interacting with and enjoying the home in a way that potential buyers can relate to. A luxury home is just as much about a luxury lifestyle as the home itself.

Using video, especially bad video, won't help to sell a home. Good video, done right, will hook that buyer's heart and mind, giving my listing that little edge over the competition.

How Do I Rent-To-Own?

Lots of times potential buyers ask me about a rent-to-own home purchase.  In California, rent-to-own purchases are most commonly done as a "lease-option," where the buyer makes an offer to lease the property over a defined period, with the option to buy it in the future at a pre-agreed price and set of terms.

 

The first stage is to offer terms of a lease. Often a buyer might offer to lease a $300,000 property for a year at $1500/month, with $200 of that being applied toward the purchase price, should the buyer exercise his option to buy the property at the end of the year. Other lease terms regarding insurance and damages and such would be included in the terms.

 

 

 

Then, along with the lease offer, an option to purchase is offered. The option might be exercised in a time frame of 30 days before the lease expires, although any time frame is negotiable. The offer sets an agreed price of, say $300,000. And the offer includes "option money," a fee that should motivate the seller to agree to the whole process, say $5,000. Additionally, the other terms of a sale such as paying for title and escrow fees, inspection periods, and such are agreed upon in the option agreement.

So, in this example, the Seller get's a $5,000 fee up front in cash that he gets to keep, whether or not the option is exercised by the buyer. The Buyer gets to live in the home for $1500/mo, $200 of which will come off the purchase price when he buys. And when the year is up, he gets to buy at a prearranged price...if he still wants it. If the market tanks, he can walk away, and the seller can put it back on the market.

 

Of course, all of these terms are negotiable, but this illustrates the basic framework of a lease-option purchase.  Very few lease-options ever come to close, but for some buyers they can provide a creative way to get into a property that otherwise wouldn't be available.

Humboldt County, California December Real Estate Statistics

I’m a little late getting these stats our, but the real estate market in Humboldt County, California is hanging in there during the month of December!

At the beginning of 2011, there were 550 homes on the market, which is right in our “normal” 500- 550! Fewer homes on the market, of course, supports prices and keeps them from falling. That’s good.

And we had an uncharacteristically high 75 homes sold in December in Humboldt County! That’s the highest count since September, and during what is historically one of our lowest months!. Of course, more homes sold puts upward pressure on prices.

The average sales price of a home came down from November, but remember, that was a very uncharacteristic month. There were 6 homes sold in November for over $500,000, one for $2.2 million! So while December’s average home sales price was down from the previous month, it was a solid $270,993, pretty close to the average for the year of $278,000!

The median home sale price in Humboldt County for December was a little scary, though, down to $235,100, a recent record low! We’re still 3 for 4 so far in the statistical categories!

Are we turning the corner? Have we bottomed out and started looking up? So far in January ’11, things continue to look solid. Over the last 30 days we have sold 78 homes for an average sales price of $261,499, and a median sales price of $243,450. Our lead indicator is volume; as it moves up, prices will follow. So, are we turning a corner? Just asking that question honestly is a good sign!

Humboldt County, California November Real Estate Statistics

I’m a little late getting these stats our, but the real estate market in Humboldt County, California is hanging in there during the month of November!




There are currently 568 homes on the market, which is just a hair higher than our “normal” 500- 550, and close to our recent low of 550. Fewer homes on the market, of course, supports prices and keeps them from falling. That’s good.

The bad news is that we only sold 57 homes in November in Humboldt County, a recent record low for the month. Fewer homes sold puts downward pressure on prices. Perhaps these 2 figures balance each other out?

We’ll have to wait and see, because there were 6 homes over $500,000 that sold in Humboldt County in November, one for $2.2 million! That really skewed our average sale price up to a 30 month high of $325,809!

And the median home sale price in Humboldt County jumped up to $250,000, which is right in line with the average median home sale price all year!

Overall, this report, like so many others this year, points to a bottoming out of the market. When is the market going to improve? Nobody knows, but there’s only one direction to go from the bottom; up!



What Are Closing Costs?

First time home buyers often ask about closing costs, and it can be very confusing, especially when they have limited funds to bring into escrow for closing, or when they are shopping multiple loan products with different costs structures. It’s important for all home buyers to remember that there are 3 different types of closing costs.

Title and escrow fees, and county (or city) transfer taxes comprise the first general category of closing costs, often know simply as escrow fees. These are fees that must be paid to sell a home; and all three items are specifically addressed in the California Real Estate Purchase Agreement. While the responsibility of paying these fees is completely negotiable, in Humboldt County, California these fees are most often split 50/50, with both the buyer and the seller each paying half.

The second general class of closing costs is prorations or prepaids, most often taxes or insurance payments. If a home is sold on Nov. 30, but the seller has paid his taxes through the end of the year, then the buyer must pay the seller back for the December taxes he has already paid; these are paid back on a prorated basis. Similarly, lenders often require that a new home owners insurance policy be paid up a year in advance. This is prepaid at the closing of escrow. In Humboldt County, these are typically thought of as buyers expenses, as they go to service the home during the period after the buyer has taken ownership.


Similarly, the third class of closing costs is the buyers’ loan fees. Each lender will charge a variety of up-front loan costs that range from small administrative fees up to much larger commissions or origination fees to pay the loan officer. These are fees a buyer pays for the privilege of getting a loan; a cash buyer would not pay any of these because he’s not getting a loan. Therefore, in Humboldt County, they are most often seen as a buyers’ expense.

Prorations and loan fees are not specifically addressed in the California Real Estate Purchase agreement, but they, as well as title and escrow fees, can be negotiated in the contract. The buyer can pay them all, or the seller can give a credit to pay them at the close of escrow, or they can be split in any way agreeable to both parties. It is important for a buyer to know what the different closing costs are and how much they will cost so that they can have confidence that they can meet all of the terms of the agreement.

If you’re not sure whether you have enough money saved up to buy your dream home, give me a call at (707) 499-7111, or email me at Jeff@RealtorJeff.net, and we can discuss options.

October 2010 Humboldt County Real Estate Market Statistics

What do our October 2010 Humboldt County, California real estate statistics look like?  We seem to have started a downward trend in prices again in Humboldt County, California. The number of active homes on the market, while not a huge number, is creeping up in relationship to previous years. We now have 677 homes active on the market; that’s much closer to 2008 levels than 2009 levels. And more homes on the market will mean downward pressure on prices.

Especially when the number of homes sold is down as well. At 72 homes sold, we’re just a hair below 2008 levels, but well below the 88 homes sold in 2009. While not by much, this is the lowest number of homes sold in the month of October in recent memory. This, too, will put downward pressure on prices.

The average home sales price for the month of October was $256,572; not the lowest of the year, but the lowest for any October in a long time. It also continues the downward trend started from the most recent peak in July.

And the median home sales price in Humboldt County was $236,375, which does represent a new low for the year and for recent history.

It seems that the large number of short sales and bank owned properties, or REO’s, in the market is causing our downward trends. 26% of the homes sold in October were either short sales or bank-owned properties; that’s up from 18% for all of 2009. And not only do short sales and bank-owned properties sell for less, they compete with regular sellers, thereby putting downward pressure on all real estate prices. While the rest of the country has been dealing with this level, and even higher levels, of bank controlled sales, this is a first for Humboldt County. Is there a bright spot in the clouds? Yes: it is a great time to BUY real estate!



What questions do you have about short sales or bank-owned properties? Give me a call at (707) 499-7111, or email me at Jeff@RealtorJeff.net.