Pleasanton Real Estate Market Update for May 2009

The month of May showed continued improvement in the number of Pleasanton homes that went under contract. 64 homes went under contract in May (as of May 28^th when this article was written) a significant increase over the average of 33 homes going under contract in each of the first three months of 2009.

May ended with 219 homes available for sale (note: at the end of May 2008 there were 262 homes available for sale).  This would put the unsold inventory index at 3.4 months supply of inventory.  The unsold inventory index is a unit of measure that is used to evaluate the strength of the market.  It takes the current number of sales for the last 30 days and divides it into the number of homes available for sale.  In this case, that would be 219 divided by 64= 3.4.  That is down substantially from as recently as February of this year when the unsold inventory index stood at nearly 10 months of inventory.  Many experts believe that anything under 6 months is considered a sellers’ market.

A closer look at the break down of inventory into price brackets reveals that the months supply of inventory is even lower in certain price brackets and higher in others:

This graph reveals that 80% of the sales activity is happening in the under $1 million dollar price range where the unsold inventory index is under 2.1 months.  In contrast, homes over $1 million dollars are showing a much greater months supply of inventory with the highest being 20 months for homes in excess of $2 million.  This is due in part to the difficulty of obtaining financing for loan amounts in excess of $729,000. 

 In the townhouse and condo category, Pleasanton sales are quite strong while the available inventory continues to decrease.

At this time last year there were 66 townhomes and condos available for sale in Pleasanton- nearly 3 times as many.  As recently as January of this year there were 41 available for sale with only 4 “pendings.

The National Association of Realtors reports today that homes sales nation wide rose 6.7 percent in April, that’s up over 3% compared April of 2008. Click here to read the whole article.

Housing affordability and record low mortgage rates have contributed to a surge in sales. Additionally, the first time home buyer tax credit of $8000 was a tipping point for many buyers who may have still been on the fence. And since first-time buyers must finalize their home purchase by November 30 to get the tax credit, greater activity in the months ahead is very realistic.

A recent change in the use of the $8000 credit may also help to generate continued home sales. Last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or to make a larger down payment.  This is a significant change that could really have an impact on the consumer’s buying power.

Pleasanton real estate sales also saw a surge during the month of May. 74 homes went into contract, up significantly from 25 sales in February and 44 sales in March of this year.

Pleasanton Market Update for April 2009

The month of April showed a strong improvement in the number of homes that went under contract. 64 single family homes went under contract in April- a significant increase over the average of 33 homes going under contract in each of the 1st three months of 2009.

How many homes were for sale in Pleasanton during the month of April?

April 2009 showed a 6% increase in the number of homes on the market as compared with April 2008.

There were 354 homes (248 single family homes) for sale last month as compared to 333 homes in April of last year.

Of these how many were new listings for the month?

115 homes were new to the market in April of this year as compared to 118 new listings in April 2008, representing a 3% decrease in number of new listings from this same time last year.

How many homes went under contract in the month of April?

The sales pace in April picked up considerably compared to previous months this year. 64 homes went pending last month compared to 66 pendings in April 2008. This represents a 6% decrease in sales for the same month last year.

At the current pace of sales, what is the month’s supply of inventory?

At the current pace of sales, Pleasanton has approximately 3.9 months of inventory on the market (otherwise referred to as the unsold inventory index). In April 2008, there was 3.5 months of inventory on the market.

The 3.9 months is a statistic calculated by the number of homes available for sale at the end of April divided by the total number of sales in the month of April. 248 divided by 64 sales =3.9 months.

Pleasanton’s unsold inventory index is down substantially from as recently as February of this year when the unsold inventory index stood at nearly 10 months. Many experts believe that anything under 6 months is considered a sellers’ market.

In what price range are homes selling?

80% of the sales activity is happening in the under $1 million dollar price range where the unsold inventory index is under 2.5 months. In contrast, homes over $1 million dollars are showing a much greater supply of inventory with the highest being 20 months for homes in excess of $2 million. This is due in part to the difficulty of obtaining financing for loan amounts in excess of $729,000.

Mohr Park Market In a Minute

How many homes are on the market in Pleasanton?

As of 4/29/2009, there were 242single family homes available for sale in Pleasanton.  Since the beginning of this year, the inventory has increased at a pattern consistent with the 1^st quarter of the last two years.  By mid April, the inventory had increased to 255.  However, the last two weeks of April have seen strong sales activity with 60 “pending” transactions in April.

How many homes are on the market in Mohr Park?

As of 4/29/2009, only three homes are available for sale in Mohr Park.  This includes the Glens, the Gardens and the Estates of Mohr Park.  Unfortunately the two homes on Rheem Drive are “short sale” transactions so both prices are far below market value.

*Short Sales are distress sales where the current owners mortgage debt exceeds the current market value. Negotiations are in progress with the lender to accept less than the amount owed to complete the sale and avoid foreclosure.

How many homes have gone “pending” in Pleasanton in 2009?.
 

May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan09	Feb09	Mar09
55	50	44	52	58	31	22	25	33	30	43

As of 4/29/2009, 60homes have gone to “pending” status during the month of April. This will represent the highest number of monthly “pendings” since April of 2008.

How many homes have gone “pending” in Mohr Park?

1987 Rheem	List Price $519,000	Sales Price	Calliope(Glens)	1314 SF	2 BR	2.5 Bath	COE Date6/2/2009
2092 Eilene Dr	$599,750		Woodstar(Glens)	1586 SF	3 BR	3  Bath	COE Date5/31/2009
2223 Oakland	$525,000	Short sale	Woodstar(Glens)	1586 SF	3 BR	3 BATH	COE DATEUnknown

 

No Mohr Park homes have closed escrow thus far in 2009.

Two steps: Second liens now covered by modification program; servicers must offer eligible borrowers principal reduction under Hope for Homeowners.

The Obama administration is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program.

The president’s $75 billion program has gotten off to a slow start. Loan servicers only recently started taking applications and many delinquent borrowers have complained about being left in the cold because their home values have dropped or they’ve lost their jobs.

The administration is seeking to address some of the concerns by tweaking the original modification plan, which calls for adjusting eligible borrowers’ loans so monthly payments are no more than 31% of pre-tax income.

Servicers covering 75% of the nation’s mortgages are now participating in the program, which also allows some homeowners with little or no equity to refinance their mortgages.

During the housing frenzy, many borrowers obtained second mortgages to allow them to put little or nothing down when buying a home. Up to half of at-risk borrowers have second liens, according to the administration.

These loans have complicated the modification process. For one thing, they add to troubled homeowners’ debt levels. Also, mortgage investors have balked at reducing payments on first mortgages when the second loan was left intact.

Under the administration’s new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor.

Servicers will be paid $500 for each modification and an additional $250 annually for three years if the borrower stays current. Borrowers can receive up to $250 per year for five years to pay down their first mortgage.

Investors can also receive a payment in exchange for extinguishing the second lien. They would receive 3 cents on the dollar for loans more than 180 days delinquent and between 4 cents and 12 cents for less delinquent loans, depending on the borrowers’ debt levels.

Servicers who join the new program must modify second loans when a borrower’s first mortgage is adjusted. It will likely take a month to implement, but it should not slow down the modifications of primary mortgages, the administration said.

“By bringing both the first lien and second lien program together, we can reduce monthly payments for borrowers and make it much more likely that they can stay in their homes,” a senior administration official said.

Hope for Homeowners option:

The administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.

Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.

Servicers had balked at participating in the Hope program because it required they reduce the mortgage principal balance to 90% of a home’s current value.

Hope for Homeowners, which began in October, is being revamped in Congress. Servicers would have to reduce the principal to 93% of the home’s value. The change would also reduce the program’s high fees, which turned off many troubled borrowers.

As an incentive to participate, servicers will be paid $2,500 for each refinancing, while lenders who originate the new loans will receive up to $1,000 a year for three years, as long as the loan remains current. (Source:CNN)

Click here to read the entire article.