Folsom’s Market Insulation: Is the Fire Still Lit? There’s a Chill in The Air!
November 30th, 2008 Categories: Pre Foreclosures, Real Estate News, Real Estate Trends, Sacramento Real Estate, Shortsales
As the market continues to change… Is Folsom’s insulated real estate market beginning to feel the chill?
Folsom has been one of the Sacramento areas strongest and most resilient markets-
While other areas have been inundated with foreclosures and shortsales (pre-foreclosures), Folsom has enjoyed one of the Sacramento Metro real estate’s strongest and least affected markets, with the lowest percentage of distressed properties (Bank owned, and short-sales) making up our available homes for sale. Subsequently, with less ‘have to’ sellers on the market, and more of our market consisting of well maintained, move in-ready properties, we have led the area for strength.
The fact is; our inventory in Folsom has never hit ‘critical mass’ like other areas have… That is, in some areas there are so many listings that in order to move them, new listings of distressed homes are priced by banks and folks in preforeclosure well below the current market value. This makes homes sell quickly and with multiple offers, but causes prices to trend lower and lower very quickly, (see Elk Grove, Natomas). Our market here in Folsom has seen less than a 13% drop from it’s high water mark. Compare that to a well over 50 % drop in some local areas: Sacramento County’s $195,000 median price is 34.9 percent below October 2007 and 49.6 percent below its August 2005 high of $387,000.and a total drop of 49% in median prices for Sacramento County as a whole.
Now, don’t get me wrong; I am definitely an optimist; you could consider me a ‘Bull’ as a Folsom Real Estate Market Analyst, we have so much to brag about here, so much to be grateful for; A great jobs market, the area’s best schools (arguably) thriving local businesses… but I can only say what I see: the percentage of vacant homes on our market (a leading indicator) has grown almost two-fold in the last three months… my research indicates a mass majority of these homes are either bank-owned or Short sales. Very few are “equity sales” (a term stolen from another time; ie. early 90’s shortsale market… it’s a nickname for a traditional sale, are they becoming that rare?) The number of REO (Real Estate Owned, or bank owned) properties here in Folsom has also more than doubled in just the past sixty days. Another indicator of a market headed for slower times?
Bundle up; it could be long winter….
Forth Hoyt
Keller Williams Folsom
