Dear Sue,
I know that there are opportunities in every market, both good and bad — they are just different.
I have been researching market trends in the Sacramento and Placer counties. It looks as though the Auburn market has held up a little better than most.
Before plunging headfirst into a real estate investment, I was wondering if you had any market insights to share.
— Researching Randy
Dear Randy,
I receive monthly market updates from appraiser, Jared Mickel. He regularly performs one of the most thorough analysis of the Auburn market that I have seen.
Mickel’s most recent update indicates that over the last three years from February 2006 to March ’09, the average home in the Auburn market lost approximately $155 in value per day.
In February 2006, the average sale price per square foot was pushing the ceiling of $300 per square foot. Today the average sales price per square foot is below $200.
Mickel points out that there has been two serious gaps or blips in the market during the period he studied.
The first was in September 2008 after the announcement regarding the first wave of bank failures. The market gapped down after a six-day stand still. The average price per square foot dropped in six days from an average of $225 per square foot down to
around $212 per square foot.
The second blip was a gap up. It took place in November of 08 and seems to have coincided with details of the finalization of the federal government’s Troubled Asset Relief Program, or TARP.
The gap up was from an average of $165 per square foot to an average of $180 per square foot. I find it interesting that both gaps were triggered by “news.”
The foreclosures and short sales began to impact the Auburn market in November 2008. In the last six months the foreclosures represented approximately 19 percent of the closed sales. The short sales made up approximately 4 percent.
Distressed properties as a whole represented approximately 23 percent of the total Auburn market. The majority of those sales were between $100,000 and $250,000.
Of course these sales brought down the area’s average sales price!
Recently, Leslie Appleton-Young, the chief economist for the California Association of Realtors, announced, “In Sacramento County we are through 80 percent of the sub-prime resets.”
Young said that the greater Sacramento area was one of the first counties to go down and will be one of the first counties to recover.
President Obama’s foreclosure prevention program was released Wednesday, March 4. The plan is expected to rescue millions of homeowners. I believe that over the next few months this news will positively impact Auburn’s market trend.
I hope that this has helped. Studying markets before jumping in headfirst is a matter of good Home $$$s and Sense.
Sue Thompson is owner and sales manager of HomeTown Realtors. She can be reached at seesue@seehometown.com, or on the Web at www.homedollarsandsense.com.
