KingsburghomeBlog

Housing recovery may seem like a mirage in the desert of record foreclosures and steep unemployment, but history indicates that a more balanced market is in our future.
Real estate has always been and always will be cyclical. Recent numbers—namely gains in existing- and new-home sales, increasing activity among investors, upticks in housing starts and ongoing efforts to streamline short sales—offer a much-needed reminder that this downturn, too, shall pass.
The improvements we’re seeing might not be dramatic or even permanent just yet, but any step in the right direction is an important one toward restoring confidence among consumers and industry experts. It also seems that consumer confidence is improving.
The local market here in Kingsburg testifies to the above statement. The numbers in February were better than January. Our inventory is down to 34 homes whereas in January we were at 43 and December there were 49 homes for sale. As the inventory decreases, demand increases. The Price per Square Foot (PSF) on Sold properties went way up to $121 as apposed to $99 last month. Of the 9 homes sold in February, 7 of them were from $123 PSF up to $153 PSF for the higher end homes. We have not seen these square footage prices in several years. We currently have 21 Pending in escrow, which means these transactions should be closing in March and April, so the pipeline looks favorable too.
Beware the Ides of March! To ward off any Shakespearian forecasts around the middle of March, please join us on March 15th as we host the Kingsburg Chamber of Commerce Mixer at 1340 Sierra Ave. The mixer begins at 5:00 PM and typically goes until about 6:30 PM. Non-perishable food items would be greatly appreciated and will be donated to KCAPS.
Also look for those new QR (Quick Response) codes that are poping up on our signs. Scan them with your smart phone and receive instant access to that specific listing information. Click on the following to view our company QR code: The Housing Connection

Lawrence Yun, Chief Economist for the National Association of Realtors states that “Home sales clearly recovered in the latter part of 2010 and are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies and trended down. A recovery to normalcy requires steady trimming of the inventories”. This is exactly what has been happening in our own little corner of the world here in Kingsburg. The number of homes on the market available for sale here in have continued to trend down a little bit each month for the past 7 months. And it’s good to see the same thing happen on a national level.
The Kingsburg price per square foot dropped somewhat in January, down to $99 per square foot as compared to $118 in December. There were four foreclosure homes that sold way below the average, which brought the whole average down. Even though foreclosures are still making an impact on our market, several homes in the past 60 days have sold up in the mid $140 per square foot. This in of itself is encouraging.
The new home construction situation here has softened a bit in the past several months. The City of Kingsburg has only issued 2 permits to build single family homes in the past 6 months. Northhampton Estates currently has three homes under construction .These range in price from $284,950 up to $329,950 and the model home is also available for sale.
From Leonard (the loan guy):
Interest rates are slowly trending higher. Nothing dramatic as of yet, but higher rates seem a given in this environment. Hard to complain about 4.875% when the historical averages are over 7%.
New government regulations are bearing down on the lending sources and we seem to be in a time of tremendous change to costs and time frames for borrowers and, therefore, the real estate transaction. Rules that some deemed “lax” have been strengthened to what some deem “prohibitive” and a struggle for financing from traditional sources is in our future. No one seeks chaos but that may be where the lending world is headed about April 1, 2011
We all look forward to assisting you for your real estate sales, property management and loan needs.

Toward the end of 2010, many people wondered what would happen to capital gain tax rates on January 1, 2011. Some even scrambled to close the sale of property before the end of the year. As it turned out, Congress extended the capital gain rates in mid December; at least for two years. The following is a brief summary of portions of the Tax Relief, Unemployment Insurance Reauthorization and Jobs Creation Act of 2010 (not surprisingly referred to as “the extension of the Bush Era Tax Cuts”) which are likely to impact real estate investors.
• Capital Gain and Dividend Rates – Current rates were extended for two-years for all taxpayers with a maximum rate of 15% for both.
• Personal Tax Rates – Current rates were extended for two-years for all taxpayers with the top rate remaining at 35%.
• Social Security Tax – The employee tax rate of 6.2% on the first $106,800 of wages drops to 4.2% in 2011.
• Alternative Minimum Tax – Current exemptions were extended for all taxpayers for two-years.
• Estate Tax – An exclusion amount of $5 million and a tax rate of 35% for amounts in excess of the exclusion was established for two-years; the exclusion will become indexed beginning in 2012.
• Gift Tax – Like the Estate Tax, a Gift Tax exclusion amount of $5 million and a tax rate of 35% for amounts in excess of the exclusion was established for two-years, with the exclusion being indexed beginning in 2012.
• Other Extensions – The $1000 child credit; an additional standard deduction for real-estate taxes; extension of 15-year cost recovery for certain leasehold improvements, restaurant buildings and qualified retail improvements (through 2011); and the extension of various energy credits (through 2011).
Although the legislation provides some certainty for two years, we may find ourselves questioning our future rates again in 2012. Since that is also an election year, it may be interesting!
Source: IPX1031® January Newsletter

The New Year ushered in with the local real estate market still maintaining the current “status quo”. The Active and Sold statistics are almost identical to the number we quoted for the month of November. Inventory is consistent at about 50 Active listings, the Days on the Market are only off by 1 day, the Sold properties are close to the same and the Price per square foot is very, very close. This only adds to the conclusion the market here is definitely stabilizing. At least we are not declining as we were over the past 4 years. Please see the CMA (comparative market analysis) table to the right.
The hottest type of property to sell right now is what we refer to as: an investor dream house. This would be a home built within the last 20 years, 3+ bedrooms and with a purchase price of around $150,000. With the normal 20% down, on a fixed 5% 30 year mortgage, the property maintains a positive rental cash flow. These homes are mostly foreclosures and when they come on the market, we are seeing multiple offers. Of course, this is not helping the traditional Seller or property values, but right now, it is the reality.
Here is an interest rate update from my favorite Mortgage Broker, Leonard Pagel: “The world of interest rates remains trending towards higher levels. The projections for higher rates have been supported but, in my opinion, it has been moving upward slower than many would have thought. That being said, higher rates have brought some people off the real estate sidelines and interest in purchasing property has noticeably increased over that last few months. It is an interesting conflict that buyers are worrying whether values may not have bottomed while fearing higher rates impacting payments. It is making their decision more complicated.”
The National Commission on Fiscal Responsibility and Reform have still not made a decision on changing the Federal tax deduction for mortgage interest. I will post a new blog as soon as we hear that a decision has been made.
We look forward to assisting you for all your real estate sales, property management and loan needs.

In February, the White House created the National Commission on Fiscal Responsibility and Reform to examine how the country spends money and collects taxes. The commission was also tasked with creating a proposal that would cut the federal budget deficit.
One area that the commission found to increase tax revenue is to reduce the mortgage interest deduction (MID) currently offered to homeowner’s as an incentive to own a home.
The commission’s proposal would change the MID to a 12% non-refundable tax credit, with no credit offered for mortgages higher that $500K nor for interest on a second residence of home equity loan.
The National Association of Realtors are strongly oppose to the proposed changes to the MID and will continue to work vigilantly to ensure that our elected officials are aware of their opposition and implications of the proposal.
As the housing market continues to recover from the worst financial crisis in recent history, any change that reduces the ability of the market to heal is misguided and must be rejected.
Although the proposal has been made public, the commission must still vote on the proposal before a formal recommendation to Congress and the White House.
We will keep you updated as to this important proposal.
Our market here locally still remains somewhat unchanged. We still have about the same number of availably properties for sale (53) and the average sales price is at $234,637. The number of November Sold properties doubled from October, from 5 to 10 and average PSF (price per square foot) is still the same as last months. Please see the CMA (comparative market analysis) report to the right of this blog.
As Christmas draws near, our staff extends to you and your family the very best of wishes. It seems that most people today are trying to get back to the basic premise of the holiday. The Grinch (see the Seuss-ism to the right) said it all when he realized that it’s not about the packages, boxes and tags, but about the heart and caring for loved ones. May you family and friends be the benefit of all your love.
Merry Christmas!

Last week my dentist asked me if I was ready for “The Holidays”. My goodness it was only the first week of November. My first reaction was to kick her, but I thought better of it after I calmed down a bit. “The Holidays” are coming fast enough as it is. And NO, I’m not ready for “The Holidays”. (See the Dr. Seuss quote under Seuss-isms below and to the right hand side of this Blog …. couldn’t have said it better!)
Okay ….. I feel better. Now, on to real estate.
The market in California is actually doing better as a whole then we are here in Kingsburg. Last month the average sales price in California went up and our average sales price dropped about 5%. What is truly worth noting is the fact that we went from 16 closed escrows in September to only 5 in October. Wow, what happened? We are not sure. We do know that after the 3 major banks announced their moratorium on foreclosures due to legal problems, our phones quit ringing. Although California is one of the few states that employ a simple foreclosure process that does not involve the judicial system we have still felt the result of this freeze on foreclosures. It has made some Buyers wary of entering into a foreclosure transaction at this time. Although if anyone was involved in a questionable transaction, the title policy that is typically purchased protects the Buyer against claims that prior owners still legally own the property.
Currently we have 51 homes for sale here at an average of $125 PSF (price per square foot). The upper end homes on the north east side are listed up in the $145 to $160 PSF price range and are actually selling and closing escrow. Our problem continues to be the foreclosures and short sales which are down in the $110 range. We just sold a home on Harold/Madsen for $146 PSF within 7 days from the day it was listed.
To help put this in perspective, in September, 2009 there were 7 Sold listings and 31 Active, so there is not much difference from a year ago, just a slightly higher number of Active listings.
The current affordability of homes and the extremely low interest rates still make this a very good time to purchase a home. There is renewed interest from lenders in those “fixer-up-type loans (203K) for that first time home buyer. Help get those kids into their first home with these great low prices and low interest rates. Call us for all your real estate needs.
Back to the issues of Holidays: We sincerely extend all our best wishes to you and your family for a wonderful Thanksgiving Holiday, hopefully filled with family, fun and festivities.

It is autumn. In my mind with the onset of autumn comes a cornucopia of thoughts. When I think of the cornucopia basket, I think of lots of different stuff placed together to make a pleasant presentation. I liken this big basket of stuff to THE REAL ESTATE MARKET as it truly is a cornucopia of things & people that make the industry work and work well. From Active, Pending & Sold listings, Days on the Market, Price per Square foot, escrow & title companies, Buyers, Sellers and Lenders, it takes all these things & people working together to make up the housing industry; i.e., that basket of fruit on the table.
So here is my cornucopia basket: All of the statistical points from August to September improved just a little. Here in Kingsburg, we had 16 Sales that closed escrow, which is 10 more from August. Yea!! It took pretty much the same amount of time to sell at 101 days on the market (DOM) and the Price per Square Foot (PSF) inched up a bit from $118 to $119. Our standing inventory went down slightly form 46 Active listings to 45. Please see the September CMA to your right of this column. So in essence our market is still stabilizing, however (here comes the bad news), almost every escrow that has come across my desk in the past several months has been a challenge if a loan was involved. Even the A1 borrowers are being subject to the most stringent of underwriting policies. Appraisals are still a big, big issue and some times knocks the deal right off the table where that cornucopia sits. The lending pendulum has swung from being way too lax in underwriting policies to way too harsh and borrowers/buyers today are paying the price. And as we head into the “Seasons” we anticipate much of the same here in Kingsburg.
Our business and personal philosophy is that we are honored to be able to own 2 small businesses and provide a service to the Kingsburg community, even in these challenging economical times. We look forward to assisting you for all your real estate sales, property management and loan needs.
On a political note, we urge everyone to register to vote prior to the October 18th deadline and to then exercise your right as an American citizen and vote on November 2nd. Along that vein, we are offering FREE rides to anyone who needs transportation to and from the polls anytime during the day on the 2nd. Please call myself at 657-1812 or Leonard at 647-1811 and it will be our pleasusre to pick you up, drive you to your precinct, wait for you to vote and drive you back.

Reporting from Sacramento —
The Golden State’s real estate market lost a bit more of its luster as the total value of California’s properties fell for the second year in a row. Ouch!

Closer to home, we are experiencing somewhat the same situation. Even though interest rates are still at historical lows, the amount of closed transactions in Kingsburg has dropped about 20% since this same time last year. Looking back at this summer, we had 7 closed escrows in Aug, 8 in July & 10 in June. The number of Active listings went from 39 back up to 47, which is exactly the opposite from last month. We are still holding over 30 pending escrows, waiting to close …. again a good thing. So in summary, the state of the local real estate market is reflected in the County, State and National economic situations.

On a personal note, our trip to Washington DC in late August to attend the Honor Rally at the Lincoln Memorial was an awesome experience. It was like being at a picnic with 750,000 of your personal friends or family. Nowhere did we see or hear any negativity, protests, hate or drama. It was a very moving event and one which we will forever remember. It was so good to see our military honored and treated with such esteem, especially the Vietnam Veterans from the 1970s.
One of our favorite things to have experienced was the divine fly over by a flock of geese, which flew in formation, from the Washington Monument, down over the reflecting pool in front of the Lincoln Memorial. Truly amazing! See picture below.
Thank you to all of you who took the time to sign our t-shirts for the Rally. We know you were there in spirit!

View from the Washington Monument toward the Lincoln Memorial

Divine Flyover

As a part of President Obama’s recent financial reform bill, a new bureau will be created called the Consumer Financial Protection Bureau. This new bureau, with a $500 million annual budget, will write new rules and monitor problems and abuses in areas such as residential real estate settlements, credit scores, “truth in lending,” and equal credit opportunity. Of the talking “points” in the reform bill, the only significant item that I can see is the creation of a consumer hot line ….. seems like an awful lot of money for just a hotline.
On the home front, in comparing last month’s numbers with this month’s, we are still hovering around the same mark. We had 10 sales in June and 8 in July. The number of Active listings went down from 47 to 39, which means inventory is getting smaller. That’s a good sign. Another good sign is that as of July 31st, there were 31 homes pending and getting ready to close escrow. For the past year or so, this number has been about 10 to 15 pending sales in escrow. So all in all, the housing market here is still getting a little better each month.
Remember to come by and sign one or both of our Honor Rally t-shirts before August 24th. We are leaving for Washington DC to attend the Glenn Beck Honor Rally at the Lincoln Memorial on the 25th. Our t-shirts are just about covered with signatures from gracious people who support the honor rally on August 28th.
And again, as always, we welcome your comments!

The local real estate numbers are in for the month of June and they are almost identical to those from May, except for the average sales price. That number seems to be ticking upward each month, thanks in part to the new construction in the north east area of Kingsburg. The number of available homes for sale and the time it is taking to sell them is consistent with the past couple months. So we have the smaller foreclosure homes selling for around $100 to $115 per square foot and the new homes coming in at $148 up to $163 per square foot. Good news for the upper end of the market, which has been stagnant for the past several years.
We are pleased to have another Guest Blogger this month: Ron Hirschler, Kingsburg Farmers Insurance and Financial Services Agent. You may reach Ron online at rhirschler@farmersagent.com. Ron offers the following good advice on home security:
“Practical Tips to Secure Your Home”
One thing every homeowner should do at least once a year is to walk around and through their property with a close friend or neighbor who is not too familiar with the house. Start outside and ask yourself “How would I break in?” The purpose of not doing it alone is your pal may spot something you’ll overlook. Remember, the two things a burglar fears most is being seen and having to take too much time to complete the crime.
Tips on being away for extended periods:
1. Arm security system. Set automatic timer for lights & radio and turn phones down.
2. Arrange for neighbor to watch house, cut and water grass to give it the lived in look.
3. Make sure there is no change in normal pattern of opening shutting drapes and/or lights.
4. Arrange to stop mail, newspaper delivery & continue to have yard work performed.
5. Arrange to have local police give “special attention” for area beat car.
Thanks Ron for these great security tips!
Remember the Summer Band Concerts for the next 4 Thursday evenings held at the Memorial Park across from Kingsburg High School. New Era Financial (our sister mortgage company) is sponsoring tonight’s big event and is providing a packet of free lemonade in celebration of its 20 year anniversary.
As always, we welcome your comments and promise to respond to them right away.