Clear Capital is a valuation and intelligence gathering firm based in Truckee.
Founded by Kevin Marshall in 2001, Clear Capital crunches real estate market data with intensity and precision.
Using rolling comparisons of sales information on a monthly, quarterly and annual basis, Marshall’s firm has solid evidence that our local market has resiliency and tremendous upside potential.
Looking at their data, comparing three-month averages, we find the Sacramento/Roseville market ranked 14th in the nation measuring October to December 2008 against that same time period in 2009.
During those comparable intervals, home prices rose 2.7 percent year over year. Our market remained in the top 15 each month through spring, meaning that the February to April 2010 quarter continued to place us in the top markets when compared to the performance of February to April 2009.
Interestingly, the Sacramento/Roseville region’s sales activity includes a high number of real estate owned properties.
During 2010, the number of foreclosures resold by banks has accounted for 36 to 40 percent of all closed transactions.
In the view of Clear Capital’s analysts, this is a significant statistic. Conventional wisdom would dictate that bank foreclosures create “fire sale” prices that drive values downward.
That is not the case here, and the reason is simple. When a market has enough buyers with the desire and the ability to purchase a home, fire-sale listings are bid up in price.
The good deals attract a feeding frenzy, buyers flock to take advantage of bargains and these properties sell above their list price.
When a large percentage of closed sales are bank-owned properties, and average sales prices are stable or rising, we should be optimistic about the recovery of our market.
Far less scientific, but worthy of mention, are my personal observations and experiences.
Despite the loss of federal tax credits, buyer interest is rising. I have clients moving off the sidelines and on to the playing field after months of ambivalence.
Some are first-time buyers, others are moving up, or downsizing, or buying investment property.
It seems obvious that improved home prices and low interest rates have created potent motivation to buy.
One anecdote is particularly telling. I have a client who is a senior executive in the financial services industry. This individual moved here from out of state and postponed the decision to buy a home while examining the housing trend in our area.
After three years of observation and analysis, my client is now in contract to buy a home. This person has all the right credentials — well informed, fully qualified for months — and is finding the window of opportunity for purchasing a home.
I’m taking note.
David Ryland is the dean of loan originators at Big Valley Mortgage in Roseville. He has 30 years of experience. He can be reached at dryland@apmortgage.com.
