News is Bad, Data is Good!!!

The latest data from Trend Graphics shows the pendings and closed inching ever closer to the Inventory for Sacramento County. Everyone is so beaten down by the news stories and the economy in general, that they are no longer looking at the data. THIS IS GOOD NEWS FOLKS! Just like this depression started with the simple trend change of decreasing inventory to increasing inventory, so will the emergence out of this funk be lead by a sustained decrease in inventory after increasing inventory. Look above, inventory is basically 56% of what it was in Nov 2007 and sales are up 83% year over year for the month of January. Sounds good to me.

Foreclosure Capital of the Country

Stockton California has been highly reported as the Foreclosure Capital of America, however it too is bound to rebound from this housing slump. Below is a blurp from a recent article on MSN talking about a serious increase in activity "...Dias said one foreclosed home he showed last month sold for $80,000, or $11,000 above its asking price, after 12 days on the market. The two-bedroom, one-bathroom house may rent for up to $1,000 a month and generate a monthly profit of up to $400.

Investors likewise pounced on a three-bedroom, three-bathroom home in a gated subdivision that Dias just showed. It has at least three offers at its $220,000 asking price, he said. "People are cherry-picking and finding the right ones," Dias said. "They see prices are at a bottom."

The fact that the supposed worst housing market is showing signs of life only further supports my claim that the worst is over and now the opportunities are emerging. We are continuing to see more positive press and less active listings

Even negative nelbert over at bubbletracking.blogspot.com is showing some serious reductions in inventory in the Sacramento area inventories. I hate to think about what the the "death to housing" bloggers are going to do when the market has stabilized. I'm sure it will be deny, deny, deny and of course they all will have missed the opportunities that exist.

Even more reports to support my claims... the SAC BEE came out last week with this article..."All last year they were among the state's top neighborhoods for foreclosures, those ZIP codes where the American dream of homeownership so often died. In 2008 they're taking top honors for sales. When DataQuick Information Systems reported this week that Sacramento County posted its first gain in year-over year home sales in 37 months, these were the neighborhoods that made it happen: working-class areas in south Sacramento, North Highlands and North Sacramento, Elverta and Citrus Heights."

It is remarkable how when the tide turns, it really turns. All you have to do is type home sales into a search engine and you will get a handful of positive press. Not long ago you would be searching for days.

New Housing Info

I know I said my next blog would be about financing options in today's housing market, but with all the new sales data I had to put it out there first. In my last post I talked about a spike in "pendings" and a trend change. I didn't know how right I was until the next months data came out. Take a look below at the Sacramento pending home sales for March. Again, decreasing Inventory and Increasing pendings. Sales will lag behind pending sales especially now with the lending restrictions, but the next couple months of actual sales should jump as well.

Even more data can be found from the wall street Journal supporting my claim that the trend has changed. Look at the graph below with data about new home starts. For the full article click here.

No matter how many times its said, people just don't seem to get it. History has proven that Real estate is cyclical, and we are at or near the bottom of this cycle. Again the opportunities are there for buyers. Starts are down, sales and pendings are way up, that means less inventory and a TREND CHANGE. It won't be over night, but we will continue to see things improve. Inventory should continue to drop and that will stabilize this market. Prices should start to level out and then we will see a pricing TREND CHANGE.

While I don't completely agree with this blogger's optimistic view he/she does have some good data on home sales. Go to http://www.buyingafterthebubble.blogspot.com/ for Nor Cal Real estate info.

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How to Benefit from the Housing Bust

You can't help but feel reluctant to get into housing right now with all the bad press, but what we can't forget is that the housing market is cyclical. For every bust there is a boom, the key is timing. My only goal here is to provide information and point out opportunities that do exist.

I am almost as sick of hearing the word "Foreclosure" as I was of hearing the phrase "Housing Bubble". I'm not down playing the severity of the issue that thousands of families are facing, but I'm not sure we are getting the full story.

I do not argue the fact that Bank owned properties are the majority of what's selling in today's market. This is a link to a recent story on the Sacramento Housing market and bank owned real estate. What I do argue with is the doom and gloom that we can't escape from. All you have to do is look back 3 years ago when the press and the majority of the media forced down our throats that real estate was a "can't miss" proposition. In my opinion, in both cases, the truth lies somewhere in between.

I've been watching this whole mess waiting for 1 thing and that is a trend change. The press is so far behind the reality of what is going on that there is never an in between. All they care about is excitement and fear so that is what they cover. The reality is that these things don't happen overnight. I believe that the real bubble burst as soon as new listings began to out pace the sales for a particular area and inventory began to rise. That was the first trend change back in 2005. There are a couple of great sources for information like this. Although the site OCRENTER is biased, it does provide useful information on Inventories. You can see the Inventories rising through 06 and 07 with an occasional seasonal drop, but then in early 08 you start to see a decline. This is the second trend change and where I believe we start to see the true signs of an opportunity.

There are so many great sources for information like this. Here is a link to some more useful info on pending sales in Sacramento. That is another sign of a trend change. We are starting to see a jump in the pending sales. Of course real estate is regional, so some areas are going to be stronger that others, but you will see for Sacramento County there was a huge jump in PENDINGS for February.

So what does this mean. In my mind it means that the time is now, or in the very near future if you are thinking about real estate. There are so many opportunities out there from foreclosures to new homes. With rates low and sellers hungry the opportunity is there. If you are looking for places to start your search here are a few options. If you are looking at new homes, I would focus on a builders Standing Inventory or Quick Move In Homes. They are hungry to sell so the opportunity to get a home at a low price, with a warranty and with great financing is there. If you are willing to roll the dice on a foreclosure, there are many websites you can search with, but Realtor.com and Zip Reality are always dependable. If you are shopping bank owned stuff, I would reccomend working with a realtor. Many of these properties are coming on the market so low that they are quick to go into pending status. A realtor will get daily updates on new listings which could help you be first to the punch.

In my next post I will focus on the financing side. Thanks for reading!
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