Here is this week’s Folsom Homes Report, for sales activity in the Folsom real estate market as reported by Trulia.

The average listing price for a Folsom home was $410,640 for the week ending Jan 20, which represents a decline of 5.8%, or $25,229 compared to the prior week and a decline of 5.1%, or $22,002, compared to the week ending Dec 30. The median sales price for homes in Folsom California for Sep 09 to Nov 09 was $341,000. This represents a decline of 24.6%, or $111,500, compared to the prior quarter and an increase of 0.3% compared to the prior year. Sales prices have depreciated 20.7% over the last 5 years for Folsom homes. The average price per square foot for a Folsom home as of Nov 09 is $173, this represents a decline of $5 a square foot from Aug 09 and a decline of $17 a square foot from Nov 08.

We received notice today that FHA is changing some of its lending rules- we do not know when these will take effect but we believe it will be within the next 90 days. 

Here's the Reader's Digest version of the new changes handed down:

Credit Score- with a credit score below 580 the required down payment will be 10% this is not a major change as they will not approve a score below 620

Raise the upfront financed MIP (mortgage insurance premium) from 1.75% to 2.25%  (must be approved by congress).  This is the second time in two years that it has raised the premium.

Max Seller credit lowered from 6% to 3%- this is the largest change.  They are trying to lower the over inflated appraisals where sellers increase the sales price to offset paying for buyer closing costs.

These changes are aimed at helping reduce risk in this ever continuing saga of loan defaults we find ourselves awash in.  The overall effect on Folsom home sellers is probably minimal.  Of the three changes mentioned above the seller concession reduction is the most likely the one that will from time to time rear it's ugly head and kill a sale.  Beyond that don't look for these new guidelines to significantly impact the lending side of things for our market.  

And so it goes...    

Sadly another American icon has fallen on his sword.

By now you've learned more than you ever wanted to know about Tiger Woods and his questionable decision making.

Like other icons before him, and undoubtedly, others that will come after him, Tiger's tale is not unprecedented, nor is it limited to icons and idols. Sure, the bigger the name the bigger the splash when bad decision making leads to trouble.  But there's a valuable lesson here if you're willing to look deeper than the sensational aspect of the story. 

Over a course of years, I think ONE thing was at the root of what would later become the problem that led to Tiger's fall from grace.  The ONE thing that everyday people like you and I are as susceptible to falling victim to it as our sports idols often do.

In Tiger's case, his kryptonite may well end up being that he didn't have someone in his inner circle that was strong enough to be that guy that stands up and says "Hey Tiger, that's not what you should be doing."  It takes guts to be that guy.

Many times that guy gets sent packing.

Many times that guy's advice gets ignored or minimized.

But, many more times than not, having a that guy keeps us centered, which, helps us avoid making bad decisions that we end up regretting later.

There's an old saying that goes "Coulda Woulda and Shoulda" are the three wisest guys on the planet.

Looking back I'm sure Tiger would have rather had those three guys in his inner circle of  advisors.

I run into this a few times of year with seller clients.

They profess they want me to be that guy when they hire me. 

But, sadly, like Tiger, they won't accept advice and counsel.  They're going to do what they're going to do regardless.  If their home isn't selling they'll rationalize that it's everything but the real reason, bad decision making.  It's hard to be that guy when your boss signs your checks.  It takes backbone.  It takes character beyond the norm to risk getting canned for your honesty.  But in the end having  that guy nearby will be the best way to insure you don't become close friends with Mr. Coulda, Woulda and Shoulda.   

And so it goes...   

There are many factors that influence the value of your Folsom home when you offer it for sale. In recent years, none more important than the effect that distressed sale properties have on the non-distressed seller who is selling out of desire rather than necessity.

The number one question on the lips of today’s non-distressed seller is “How much impact do competing REO’s and Short Sales have on my price?” To help answer this question, I’ve put together three charts comparing the Average Price per Square Foot of REO, Short Sale, and Non REO property. These charts clearly show just how much value differential exists between these types of Folsom homes.

Here’s what the data tells us: Ending in December 2009 the average price per square foot for REO property in Folsom was $153 a square foot. This is $24 or 14% lower than Non REO/Non Short Sale property ($177). To see the true impact REO’s have on your home value multiply the December 2009 Folsom Median Home Price of $345,000 by 14%, you get a value differential between REO and Non-REO property of s $48,300. That’s a significant number. Even more so for every dollar in value your home falls above the $345,000 Folsom Median Home Price.

With Short Sales we see much the same.

Ending in December 2009 the average price per square foot for a *Folsom Short Sale *property was $165 a square foot. This is $12 or 7% lower than Non REO/Non Short Sale property ($177). Apply the same math as above (December 2009 *Folsom Median Home Price *of $345,000) using a factor of 7% and you clearly see that the value differential between a Short Sale and non-Short Sale property, in this example $24,150. Again a substantial figure.

So what does this all mean? Simply this. Distressed property does affect the value of your Folsom home. With so many distressed properties currently listed for sale, (nearly 40% of all Folsom homes), you have to acknowledge the real impact this has on not only your asking price, but ultimately your realized price.

Although no one can predict exactly when this market condition will go away, the best advice I have to offer you is to know your market before you list your home for sale, then do your best to get your the best price, remembering that the best price is today’s price, not one from another time and market condition, and distressed properties DO play a major role in your home’s market value, whether we like it or not.

And so it goes…

Here is this week's Folsom Homes Report, for sales activity in the Folsom real estate market as reported by Trulia.

In comparison to two weeks ago, the median sales price remained unchanged and average price per square foot for Folsom homes decreased slightly by less then 1%.  There are 103 Folsom homes that are pending sales representing 27.18% of the available inventory.  The time to sell Folsom homes is currently 94 days.

By far the question I'm asked most is "how long is this market going to last?"  My answer; "Until the banking industry gets its act together."

President Obama continues to place much of the blame for the recession on past mistakes made by Wall Street.  But upon a closer look, one of the reasons for the recession's continuation could very well be the "fixes" currently being made to the banking industry problems, problems that started the whole economic meltdown in the first place.

Lending institutions that used to makes loans to every and anybody are now so rigid in their underwriting requirements that many homeowners and potential homebuyers are being turned away or turned down when applying for a refinance or purchase loan.

According to Government sources, only half as many refinancing applications were reported at the end of 2009 as were reported in the beginning of 2009.  So even though the government has succeeded in driving mortgage rates down to incredibly low levels, that hasn't been a savior because so few people have been able to take advantage of the low rates. 

The lack of available credit not only hurts individual homeowners and home buyers, but it also has broad economic repercussions on a possible large scale national economic recovery because of the part housing plays in a healthy economy.

For those who currently own a home and do not plan to sell anytime soon, refinancing could save them hundreds of dollars a month, which in turn could be put back into our economy towards the purchase of goods and services.  This extra spending would no doubt improve the economy by helping build back many of the jobs that have been lost over the past 5 years. 

And then there are those who are likely to lose their home to foreclosure unless they can modify their loan through a refinance of restructuring of their loan. 

Our failure to address the problems of these people is why so many foreclosures continue to pervade our housing market.  

To point, banks are so ill equipped to deal with short sales that many eventually become tomorrow's foreclosed home.

I've maintained for years that if our government spent more time focusing on improving inefficiencies in the handling of short sales instead of other areas they've delved into we'd be a lot closer to the end of the housing recession than we currently are. 

Journalists and politicians wore themselves out chastising mortgage lenders for the ridiculous lending standards they applied over the past decade (and rightly so). But now - here comes the inevitable backlash- credit tightening that mortgage lenders (mostly FHA, Fannie, Freddie) are putting in place at a rapid pace.

And so it goes.

Here is this week's Folsom Homes Report, for sales activity in the Folsom real estate market as reported by Trulia

In comparison to last week, the median sales price decreased from $439,000 to $341,000 and the average price per square foot for Folsom homes remained unchanged.  There are 107 Folsom homes that are pending sales representing 26.62% of the available inventory.  The time to sell Folsom homes is currently 86 days.

Here is a look at the median price of Sold homes in Folsom from August 2008-October 2009.

Here is this week's Folsom Homes Report, for sales activity in the Folsom real estate market as reported by Trulia.

In comparison to two weeks ago, the median sales price decreased by 1% and average price per square foot for Folsom homes remained unchanged.  There are 126 Folsom homes that are pending sales representing 27.86% of the available inventory.  The time to sell Folsom homes is currently 86 days.

The Wall Street Journal reported today that nearly one in four U.S. homeowners owe more on their mortgages than their home is worth, raising fears that more foreclosures could be in the offing.

This latest news seems to confirm what some analysts are predicting, more price dips again this winter as foreclosures increase and economic growth remains modest.  

In Folsom nearly 40% of all listed homes are either short sales or bank owned.  In a normal market this number is normally closer to 10-15%.  As long as this market condition exists expect downward pressure on pricing to continue.