Homes in Ruby Hill

Sunday, August 1, 2010

The State of the Ruby Hill Market

Ruby Hill continued to show a healthy level of activity this past month. The summer inventory is low compared to previous years and sales remain strong with a total of 47 homes having sold or gone pending since the beginning of this year.

July                 Total               Bank owned share          Short Sale Share

Active              22                     0                                        1

Pending              9                     0                                       5

Sold YTD        38                     3                                       5
2010

Only one of the 22 homes currently active on the market is a potential short sale and none are bank owned. Short sale and bank owned properties can negatively impact prices as they are sold at a discount. The number of homes receiving notices of default in Ruby Hill is not significant -the first step of the foreclosure process.

For those of you who are not familiar with this process, foreclosures begin with the Trustor (borrower) not making the monthly payments to the Beneficiary (Lender). The first missed payment is technical default, but in practical terms, most Beneficiaries do not begin the process until the third payment is missed. If the Beneficiary cannot resolve the defaulted payment amount with the Trustor through forbearance or other loss mitigation measures (see HAMP below), the Beneficiary will instruct the Trustee to begin foreclosure proceedings. Many lenders prefer to accept the short sale(where the lender receives less than is owed upon the sale of the property) route rather than foreclose, as this path can be cheaper and less cumbersome. As evidenced by the numbers above, short sales make up approximately 20% of the homes which have sold or are currently pending.

Pleasanton overview

Homes are selling faster in Pleasanton as compared to this time last year, with only a 3 month supply at the current absorption rate. There has been an upward pressure on prices with median home prices up over 20% from this time last year at $822,500.
Compared to last year homes in almost every price point have been selling in higher numbers, which should lead to an optimistic outlook. So why is there such an air of uncertainty about what the future holds?

Air of uncertainty

With headlines such as “40,283 of our neighbors are in mortgage limbo” (Tri-Valley Herald) there is a question in the buyers’ minds about how many more homes might hit the foreclosure market and hence depress future prices, even though all recent trends have shown an upward trend. Many homeowners cannot afford to pay their mortgages or are choosing not to pay because they are upside down with their home values. Government is continuing to work closely with the banks to ensure that homeowners can continue to stay in their homes through the mortgage aid program known as HAMP – Home Affordable Modification Program. The success of this program and the creation of more jobs will determine of many of the homes on the default list will ever turn up as foreclosed homes.

The economy continues to show many positive signs with the stock market ending with the best monthly gain this July since 2009. Many local companies such as Chevron and Intel have had record profits this past quarter. Google has added 2,000 employees in the first 6 months of this year and Cisco Systems and Intel have indicated plans for increased hiring. There are plenty of reasons to be optimistic, but caution prevails nonetheless.

Please contact Anju Bhatia for further information or comments: Anju@RubyHillLiving.com or visit www.RubyHillLiving.com

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