The real estate market continues to evolve as we work through short sales and foreclosures in the Pleasanton market place as well as market places all over the country. One of the difficulties surrounding short sale transactions is the amount of time it typically takes for the lender to approve the short sale-a mandate in moving the transaction forward.

Lawmakers realize that improving turn around time on these kinds of transactions will only benefit the market place as a whole.

Here is the latest news for the Senate on short sale legislation:

Recently enacted Senate Bill 306 does not require lenders to review short sale requests from sellers and their agents within 21 days.  The new California law, which addresses certain escrow procedures, has been mischaracterized by some practitioners as landmark legislation calling for a 21-day turnaround for short sale approvals.

The new law inserts a short payoff amount request into the existing payoff demand law which generally requires a lender to respond to a request for a payoff demand statement within 21 days from when it is requested, typically by escrow.  The new law essentially requires, after a short sale has already been approved, for the lender to respond to a request for a short-pay demand statement within 21 days.  The lender’s response to escrow can be a short-pay demand statement or even, depending on the circumstances, a written statement electing not to proceed with the proposed transaction.

Another provision of SB 306 may also cause confusion.  In practice, a lender may approve a short sale subject to its review of a closing statement prepared by escrow, but the lender does not review that closing statement promptly.  Under the new law, if a lender fails to approve the closing statement within four days, the closing statement shall be deemed approved, but only if it is “not clearly contrary to the terms of the short-pay agreement or the short-pay demand statement provided to the escrowholder.”  The new law does not bind a lender to a short payoff amount in an offer that the lender has not approved.

Senate Bill 306 contains other technical changes in real estate related laws, such as, but not limited to, the following:

• Expanding the existing requirement for a lender to contact certain borrowers to explore options for avoiding foreclosure at least 30 days before filing a notice of default, to include not only owner-occupied residences, but also owner-occupied residential property with two-to-four dwelling units.
• Extending the existing requirement for a lender to record a notice of sale from 14 to 20 days before a trustee’s sale.  This provision does not change existing law requiring a lender to wait at least 20 days after mailing a notice of sale before conducting a trustee’s sale.

This new law comes into effect on January 1, 2010. 

Click here to read the text of Senate Bill 306.

 (Information provided by the California Association of Realtors.)

Click here to read about how short sales work.

Questions about short sales? Contact us. We are currently working with several clients who are selling their homes and are in a “short pay” sitaution. We can help you too!

628 Del Sol Avenue is a lovely remodeled home within walking distance to our historic downtown.

• 4 bedrooms
• 2.5 baths
• Updated kitchen and baths.
• Brazillian cherry hardwood flooring

Open House on Saturday, 10/3 and Sunday, 10/4 from 1pm to 4pm.

Pleasanton Real Estate Market Update for August 2009

Sales Activity Is Very Strong

August 2009 Pleasanton Single Family Home Sales are up 48% from August 2008.

 The charts below show the sales activity for Pleasanton single family homes since January 1^st, 2009.

Starting in April 2009, the average monthly sales activity is 71 homes per month.

As you can see, homes sales doubled in the 2^nd quarter of 2009 and posted the strongest quarterly sales activity since the 2^nd quarter of 2007. 

Inventory Is On Steady Downward Trend

The inventory of single family homes for sale has dropped 37% since August of 2008.

The chart below shows the inventory level at the end of each month for Pleasanton single family homes since January 2009.

With the pace of sales for August 2009 at 77 homes, the unsold inventory index stands at 2.2 months of inventory.  This is the amount of time it would take to sell through the current inventory of 169 homes.  This number is considered to be very low.                                                               

Commentary

With the high sales activity and low inventory levels, it would be tempting to call this a sellers’ market.  However there is no evidence of any improvement on pricing levels. The median sales price for August 2009 of $706,500 for Pleasanton is down 3.22% from $730,000 for August of 2008.  Of the 126 homes currently reported as “pending” or under contract 52 of the 126 are either short sale properties or REO properties.  Short sale properties are homes being sold by the current owner where the home’s value is less than the amount owed.  The owner attempts to negotiate with the bank to accept less than the amount owed in order to avoid foreclosure.  REO properties are homes being sold by the bank that has taken a property through a foreclosure process.  The 52 properties represent 41%of all the current “pendings”. In other words 4 out of every 10 sales currently under contract represent a distress sale.  

No one knows what lies ahead, but looking at the current supply of homes for sale there is some bright news.  Of the 167 homes currently for sale as of 9/14/2009, only 11(or 6.5%) and 3(or 1.8%) are distress sales for a total of 14 or 8.3% of the total of 167. An abundance of distressed properties in a market can bring values down. For now, Pleasanton has a very limited number of distress sales and that has kept property values from free falling as much as we have seen in communities like Brentwood and Hayward.

Mid Year Market Update/January 2009-June 2009

The Pleasanton Real Estate Market has seen a surge of activity in sales of single family homes.  The 2^nd quarter of 2009 ended with 205 sales, the highest number of quarterly sales activity since the 2^nd quarter of 2007. Sales for the quarter were up 114% over the 1^st quarter of this year. 

At the same time the inventory of homes for sale is trending downward.  Normally inventory tends to increase on a seasonal basis between the 1^st and 2^nd quarter.  This year the inventory has dropped from 237 homes for sale at the end of the 1^st quarter to 213 homes at the end of the 2^nd quarter.   As of this writing (7/29/2009) the inventory level has dropped to 186 while sales for the month of July has reached 75 with two days remaining in the month.

For the 2^nd quarter short sales and REO properties represented a significant percentage of the total sales with short sales coming in at 36 or 18% of the total of 205 and REO properties coming in at 15 or 17% of the total of 205.  Combined distress sales accounted for 25% of the total sales activity.  For the month of July that percentage is down to 19%.  Of the current inventory of available homes for sale (186) there are 14 showing as short sales and 2 as REO sales for a combined total of 9%.  The number of distress sales appears to be shrinking for the moment.

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.