December set the table for a very solid start to the 2012 real estate market in the 4-core counties of which comprises the Greater Sacramento Area. 2,790 new contracts in Sacramento, Placer, El Dorado and Yolo counties represents a 3% increase over November’s number and a whopping 56% increase compared to December of 2010. 45% of these new contracts consisted of short-sale transactions. This signifies a continued trend among note holders to mitigate institutional losses and also allow distressed sellers to rebuild their financial lives more swiftly.

Another bright spot appears in the price range of $400,000 and above. Although 182 sales represented a 10% dip from November, it still maintains a 26% increase over December 2010. Consider again, the strength of November and December open contracts combined to be optimistic about the first quarter of the New Year. “Supply side economics will focus your attention on a glaring issue,” stated Pat Shea, President, Lyon Real Estate. “Months of inventory, which is calculated by the rate of sale compared to standing inventory, compares as follows: Sacramento 2.0, Yolo 2.3, Placer 2.5 and El Dorado 3.4. This represents a continued downward trend with notable month-over-month and significant year-over-year decreases.”

“Agents and Buyers alike continue to hope for more of the REO or Bank Owned listings to hit the market. Otherwise, they will be heavily dependent upon a steady stream of short-sale listings and successful negotiations with existing lien holders. Review of these metrics might suggest that housing prices will begin a slight rise,” continued Shea. “Other factors, such as consumer confidence, unemployment and interest rates will also have an impact. Many experts believe that we are bouncing around market bottom and could see a small but steady improvement in number of units sold and price point in 2012.”

Mike Wheeler has recently been appointed VP of Production for VITEK Mortgage Group. He will lead the current mortgage originator sales force, in addition to developing new accounts and markets, with the goal of doubling production within the next year. Wheeler has 20 years of experience in the mortgage industry, most recently as Regional Manager for National City Mortgage and American Home Mortgage.

VITEK’s President, Harry Duncan, is excited about Wheeler joining the company’s leadership team stating,

“Mike is a very accomplished leader, mentor and coach with 20 years of experience in the mortgage industry. He has built highly productive teams with leadership skills that attract, retain and synergize talent to increase sales and market share. Mike previously worked at National City Mortgage in Northern California and grew his district to number 1 in the company. He has been very focused and motivational in previous roles bringing Operations/Production teams together to maximize potential. Mike is a visionary in this industry operating under a ‘one team’ philosophy that builds a winning culture.”

If you would like to get in touch with Mr. Wheeler, you may contact him through the following channels.

Office: (916) 486-6925

Email: mwheeler@teamvitek.com

There was another slight increase in the number of overall closed sales in the four county area of Sacramento, Placer, El Dorado and Yolo counties. Sales were up 8% from last year indicating improved activity. The real news however was the dramatic shift in the number of closed Short Sales versus closed REO’s. Short Sale closings rose sharply; showing a 38% increase over last year, while REO closings were down 13% over the same time period. “This trend is indicative of a shift in how many banks are approaching distressed property inventory”, said Larry Knapp, CEO, Lyon Real Estate. “Since distressed properties represent the majority of sales right now, banks have hired more highly-trained staff to expedite the process. There also seems to be a general consensus in the bank community that negotiating a short sale can minimize the bank’s costs and properties are better maintained than with a foreclosure.”

Overall, the percentage of distressed sales (Short Sales and REO’s) represented nearly 70% of all closings. More than two out of three closings were in the distressed category; the highest percentage this year.

The average price and the average price per square foot were also down sharply with Short Sales and REO’s down in number by 14% and 13% respectively. The inventory for Short Sales was down 33% from last year while the REO inventory was down 23%. “This reflects a continued vigorous market of buyers snapping up the extraordinary values with low prices and historically low interest rates,” stated Knapp.

On the other hand, closings on sales over $400,000 were down 25% from the prior year. In a traditional sales market this would be indicative of a seasonal trend.

Understanding and following these guidelines will help you be a more prepared, and ultimately, a more successful buyer when applying for a home loan. Though these four sections are for educational purposes only, and may change at any time, understanding what expectations must be met in order for you to qualify for a loan will help you when purchasing a home.

All Down Payment And Closing Cost Funds Will Be Carefully Examined By The Lender:

• You must provide detailed and accurate information to show which accounts the funds are in and where the funds are coming from
• You must document the source of any funds that have been in your accounts for less than 2 months
• Any changes that occur to your financial condition will need to be explained to the lender
• Changes to your assets, employment, income or credit scores during the escrow could jeopardize your ability to qualify
• Provide complete documents – all pages!
• Provide documents with names, addresses and account numbers

Things Not To Do During An Escrow:

• Do not transfer funds from one bank account to another
• Do not make unusual large deposits into your bank account – you need to provide documentation for the source of any deposits
• Do not buy a car just prior to buying a house or during the escrow
• Do not spend large sums of money buying furniture or appliances
• Do not change jobs
• Do not apply for new credit cards
• Do not close existing credit cards

The Lender Will Require A Letter Of Explanation and/or Support Documentation For:

• Recent inquiries on your credit report
• Derogatory items on your credit report
• Recent deposits into your bank accounts
• Recent transfers of money from one account to another
• Evidence earnest money deposit has cleared your account

If You Will Be Receiving Gift Funds The Lender Will Require:

• A gift letter signed by you and the gift donor
• Evidence of the donors ability to gift the funds – a bank statement
• Evidence of the receipt of the gift funds – a copy of the check or the wire
• Evidence of the funds being received into your account

If you have questions on any of the above points, or would like to learn more about applying for a home loan, please contact me for more information.

Jeannie Gardner Mortgage Loan Originator (916) 482-1566 jgardner@teamvitek.com Licensed – NMLS # 281697

We saw a respectable overall increase in activity during the month of October in the four-county areas of Placer, Sacramento, El Dorado and Nevada, compared to last year with closed sales up 14%. Once again the bulk of the activity was in the distressed sale category with Short Sales up 31% and REO’s up 7% compared to the prior year. Sales over $400,000 represented fewer than 10% of overall sales and were down 5%. The average price for the four-county area was down 10% from last year, dropping from $241,000 to $217,000. Distressed sales (REO and Short Sales) represented 62% of closings for the month.

“It is understandable why we are seeing a very active market in both REO and Short Sales when you consider that the average price per square foot of a traditional sale is around $170 while the average price per square foot for Short Sales ($111) and REO’s ($97) are so much lower,” said Larry Knapp, CEO, Lyon Real Estate. “Even though these distressed properties often come with work required, the extraordinary values combined with record low mortgage rates continue to be the driving force in the market.”