Here is this month’s Folsom Homes Report, for sales activity in the Folsom real estate market as reported by Trulia and Metrolist MLS ending the week of July 23, 2010.

The Median Sales Price for homes in Folsom CA for is $359,470. This represents a decrease of 4.8%, or $18,030 compared to July 2009’s median price of $377,500. Sales prices have depreciated 24.9% over the last 5 years in Folsom. There were 23 sales for the month of July, down 69% from the 75 sales in June.

95630, Folsom Recently Sold Homes

95630, Folsom Recently Sold Homes

There are currently 75 Pending Sales in Folsom with an average Days on Market of 89 days. There are currently 318 Active Listings in Folsom with an average Days on Market of 118 days. The average listing price for a Folsom home is $407,975 which represents a decline of -2.2% compared to the week ending April 7, 2010 when the average listing price was $417,187.

95630, Folsom Homes For Sale

Average price per square foot for homes in Folsom is $179’, an increase of 2.7% from last month and a decrease of 1.3% compared to the same period last year.

95630, Folsom Recently Sold Homes

One of my least favorite euphuisms is "in a perfect world."

I guess its the pragmatist in me.

In a perfect world everyone would spend less time and money promoting themselves and more time serving their clients needs and interests. 

Walking that tightrope is difficult. 

It's no secret that I send marketing pieces to many of you each month with the hope that when you're ready to sell you'll consider me for the job.  Since I'll never meet the vast majority of you until that day arrives, I have to "market" myself to you.  It's one of the necessary evils.  The vast majority of people I meet tell me they like the information I send and welcome it each month because it contains useful information and they feel like they get to know me a little bit better even though we may never have met. 

Not everyone is so welcoming. 

A few weeks back I was invited into a seller's home.  On the kitchen table was my monthly newsletter. 

When the conversation turned to pricing it was obvious by their body language they had something else in mind.  It was at this point the husband pushed my newsletter in front of me and stated that the information within the Neighborhood Market Update on page 3 gave him a false impression of what his home was worth compared against the appraisal I just provided.   Based on this he said; a) "I publish misinformation", and b) "I do so solely for the purpose of promoting myself to get invited into people's homes."

Well, yes, I do need to promote myself to get the invitation to the party, so on that point I couldn't argue.  How he arrived at the conclusion that a composite of all recent sales in the area was somehow specific enough to render an accurate opinion of value on his home, absent of the detail work I presented him during the listing appointment, is somewhat confusing given his level of education and apparent intellect.  Guess you can't judge a book by its cover.

Not surprisingly he listed with someone else. 

In a perfect world nobody has to self promote. We wouldn't have to listen to the Shamwow guy, Roni Deutch, or be reminded constantly during televised sporting events about "when the moment is right."   In fact, in my perfect world I wouldn't have talk about my 22 years of experience, 1,000+ homes sold, or the fact that this year 81% of my listed homes are beating the market by selling in less than 36 days and at an astounding 99.6% of the asking price.  Nope, all I would I have to do is sit by the phone knowing that any second you'll call me, just because. 

California is going to use federal money to assist homeowners whose homes are worth less than their mortgages.  Under this new program run by the California Housing Finance Agency (CHFA), beginning November 1, California will spend $420 million to reduce qualified homeowner's mortgages by up to $50,000.  To give the program more punch lenders will be asked to match the amount.

Here is what we know as of now:

• The program is targeting low- to moderate-income households who earn less than $68,000 a year.
• The program requires that homeowners be owner occupants, the loan must be what's known as a purchase money (defined as the original loan you got when you bought your home).
• Exceptions may be made for people who refinanced to get lower interest rates.
• Borrowers will have to be delinquent or in imminent danger of defaulting, but have adequate income to continue paying after getting the help.
• Qualified applicants will be given up to $15,000 to help catch up with late payments.
• Unemployed participants will receive up to $1,500 a month to pay their mortgage for six months.
• Finally, homeowners will receive up to $5,000 to move when they cannot afford the mortgage under any circumstances.

The emphasis of this new program is to help those people who bought at the height of the market and now have loans that they can no longer afford and, because of falling home prices, a home they can't sell.  Folks who have tapped their equity by refinancing and taking cash out will be out of luck. 

According to CalHFA, it estimates it will help 40,000 or more households avoid foreclosure with principal writedowns and other plans they have in the works. 

With the program qualifications it's doubtful that this program will have much if any impact in our local Folsom real estate market.  More information is available at the Keep Your Home website: http://keepyourhome.calhfa.ca.gov/; or by calling (916) 373-2585.

As we jump into summer many people start to think about the fun they’ll have on the annual family vacation. What follows next for some people is the thought of how much it will cost and how they’re going to find the money to take their trip. Given the downturn in the economy and resulting pay cuts many people have taken, coming up with ways to find or save extra money is always good information, and quite timely given that July 1st is the date that you may file an assessment appeal with the Sacramento County Property Tax Assessor Assessment Appeals Board.

With the significant declines in property values resulting from the market meltdown of the past five years, there hasn’t been much good news out there for property owners. But for those who are willing to do a little paperwork there may be a nice payoff, in the form of a reduction in your annual property tax bill.

Here’s how it works according to the Sacramento County Tax Assessor web site:

Appraisal staff reviews market data and estimates a property’s market value as of January 1st each year and then compares this market value to the property’s current Prop 13 factored base year value.

If the January 1 market value is below factored Prop 13 value, then:

• Assessed value is lowered to market value for next fiscal year.
• Owner is notified of reduced value.
• New tax bill is based on lower value for next fiscal year.
• The following year, Assessor repeats process and enrolls the January 1 market value at that time or Prop 13 factored value, whichever is lower.

If January 1 market value is higher than factored Prop 13 value, then:

• No change in assessed value is made, and
• Owner is notified that value will not be reduced.
• If owner still feels value should be reduced, then owner may file an assessment appeal with the Assessment Appeals Board, from July 2nd - Nov 30th each year.
• Appeals Board hears evidence from owner and Assessor; the Board then determines proper assessed value

To get the ball rolling I suggest you first visit the Sac County Assessor website at www.assessor.saccounty.net.

From the left hand navigation bar select the link for Parcel Viewer - Property Values, Maps & Characteristics. At the bottom of the screen is a “Accept” link for terms and conditions, click on it and you’ll be forwarded to a page where you can enter your address or parcel number and see what your property is currently assessed at. If you feel your assessed value is higher than the current market value of your home then you’ll need to enroll under Proposition 8, (named so because in 1978 a statewide ballot proposition numbered “Prop 8” passed. It amended Prop 13 to recognize declines in value for property tax purposes. The term “Prop 8” has been commonly used to refer to these reductions ever since). To do this you’ll need to provide the Assessor with comparable values from January 1 of the current year you feel justify a reduction in value. If you are successful in getting your assessment lowered don’t expect to get a check in the mail within a week or two. The Assessor’s office is currently experiencing a historically large volume of these reductions. They’re currently running about at about 95 business days for refunds to be processed.

So what’s the bad news in this? Even in the worst market correction since the Great Depression, not all will qualify for a Prop 8 reduction. Under the law the current market value of your home must fall below the Prop 13 factored base year value (assessed value) before the Assessor can recognize the decline. Not all properties will qualify for a reduction. In 2009 nearly 300,000 properties in Sacramento County did not. Even though a property may have suffered a decline in market value - and most have - it can still have an assessed value for (property tax purposes) that is less than its market value as of January 1. If it does, it is not reduced. I ran a check for my home and found that the current assessed value is lower than recent sales of homes similar to mine so I’m not in for any refund which means it’s on to Plan B to fund my summer vacation, more lemonade stands with Emilee.

Here’s short video that speaks to this issue I found on the Today show you might want to watch.

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Assuming you own a home and are curious as to its value, then I'm guessing that at some point you pointed and clicked on Zillow.com and used their valuation tool known as a Zestimate. 

If you are a home buyer, you know the Zestimate as the indisputable, final word in a property's value - unless, of course, it seems high to you. Then you completely disregard it.

If you are a home seller looking at things from the other end of the looking glass you're excited when your Zestimate is a big, attractive number, while anything less is discounted quicker than day old lettuce.

As for appraisers and real estate agents, well, Zestimates are something to be tolerated, and not relied upon in pricing a home for sale.  

I liken them to the proverbial broken clock - right a couple of times a day.

But not surprisingly, I continue to get questioned repeatedly by folks at listing appointments, softball games, or while standing in line at the grocery store, about their Zestimate and what I think about it?

So, for all of you who are planning your next big move based on what this online bot tells you your home is worth, here is what Zestimates are (and aren't), direct from the horse's mouth.

From the Zillow web site (and you have to look hard to find it):

A Zestimate home valuation is Zillow's estimated market value. It is not an appraisal. They suggest you use it as a starting point to determine a home's value.

Well, no. I don't use it as a starting point to determine value, nor would I recommend that you do either.  In arriving at their Zestimate they pretty much clump every recent sale of every size and shape into their formulaic computer algorithm to arrive at their Zestimate of value.  

Here are, according the Wizard of Zillow himself Spencer Rascoff, what makes a Zestimate and the factors affecting their accuracy:

· Past sales of the particular property, tax records, and probably a bunch of other stuff I don't know.

· Zestimates are not the midpoint of the "value range." (Don't ask me why.)

· Homes in areas with a lot of comparable, recent sales will enjoy a more accurate valuation, as will homes with more recent prior sales.

· Homes which are unique, which haven't turned over in a long time, or for which the tax records are incomplete (no square footage, wrong data) will have the most flawed Zestimates.

As time goes on, Zestimates will become more accurate.  They have to.  Right now Zillow has a 14% +/- margin of error for the Sacramento area.   Too large to be of use when it really matters, picking the right price to offer your home for sale.

So for now this valuation tool is at best guess, if even a very smart one. Until Zillow's computers are able to join me for a walk-through and see your living room where the tenants have been changing the oil in their Harleys or the master bathroom where the fixtures were imported from the Versaille Palace, the Zestimate will only be more like that proverbial broken clock than a true and reliable picture of what your house is worth.

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 $409,756 for the week ending April 28, which represents a decline of -0.5% compared to the week ending April 7 when the average listing price was $417,187.

According to the Adversity Index, from msnbc.com and Moody’s Economy.com, the Sacramento metro area is still mired in recession as is most of the western United States.

The Adversity Index measures the economic health of 381 metro areas and all 50 states. Each area is in recession, at risk, recovering or expanding.

Using a ranking system of 1-392 with 1 being the best and 392 being the worst, Sacramento ranks a lowly 330. Reasons cited included the high costs of doing business, particularly for energy-intensive industries, high concentration of subprime mortgages, and per capita income below average for California.

In related news the Today Show ran a story this morning on a local Folsom couple who like many other Americans are throwing up their hands and simply walking away from their home in lieu of attempting a loan modification or short sale, further evidence that things have a way to go before we can expect any kind of measureable improvement in our housing market.

Visit msnbc.com for breaking news, world news, and news about the economy

This month’s market statistics continue to tell a similar story. Prices continue to suffer as a result of the large number of Bank Owned homes in the market.

On a more positive note, relief appears imminent for thousands of Sacramento homeowners hit with state tax bills for mortgage debts forgiven in 2009. Senate Bill 401, to be voted on today, would cancel state tax obligations for forgiven mortgage debt through the 2012 tax year just as the Federal law stipulates. This is important because any impediment that causes distressed sellers not to sell their homes will only prolong the current market conditions.

Here is this week’s Folsom Homes Real Estate Report for sales activity in the Folsom real estate market as of March 30, 2010 as reported by Metrolist MLS.

The average listing price for a Folsom home is $454,000 which represents a decline of 3.8%, compared to March 2009. The average sold price was $402,000 which represents an increase of 2.8% compared to March 2009. The four charts below paint a clear picture as to the difference in pricing structure, and the effect on valuation that results, between non-distress and distress properties.

The average price per square foot for a NON Bank Owned Folsom home as of the end of March 2010 is $179. The average price per square foot for a Bank Owned Folsom home as of the end of March 2010 is $156 or $23 less than non distressed homes.

Average price per square foot NON Bank Owned Homes.
Average price per square foot Bank Owned Homes.

The Median price for NON Bank Owned Folsom homes is $406,000. The Median Price for Bank Owned Folsom Homes is $390,000.

Median Price for NON Bank Owned Homes

Median Price for Bank Owned Homes

The average days on market for a Folsom home has not fluctuated much over the past year. Currently the time to sell a Folsom home is 72 days as compared to 86 days for the previous month and 79 days for March 2009.

Sometimes you just never know where your inspiration comes from.  Perhaps it was the fact that it's Tuesday, or maybe it's the rain, meaning I'm indoors all day.  But more likely it's my hangover from seeing The Hot Tub Time Machine last Saturday. 

So today I thought it would be part whimsical (assuming you appreciate a wry sense of humor), part educational, and mostly retrospective, to take a different kind of look at where we've been to help us better understand where we're at, all in an attempt to help put things in proper perspective.

So if you're game, let's jump in the hot tub and take a trip back in time someplace a little less tawdry than the Kodiak Valley ski resort circa 1986, and look at how life and real estate looked in both America and right here in Folsom California.

Our first stop is Spring 2001. 

Bill Clinton is winding down his Presidency, Duke beats Arizona for the NCAA basketball championship, Gladiator is named best picture, and the national unemployment rate is only 4.8%. 

Here in Folsom things are looking rosy, and unlike the stock market meltdown of March 2000, the term irrational exuberance is yet to be associated with the local or national housing markets. 

Our population is 56,477, there's no such things as stage three water rationing, wild turkeys and squirrels have yet to take up residence in your yard, new homes are popping up faster than weeds in the driveway, and you can still make a left hand turn out of the Arby's parking lot onto East Bidwell Street because: A) there is an Arby's and B) E. Bidwell Street isn't the new Sunrise Boulevard it will soon become.   

Times are good, especially if you own a home, or build them for a living.  It's good to be a seller, a home builder, or a title company, not so good if you are looking to buy your first home.  Multiple offers are the norm and if you don't offer at or above the list price you're toast.  Everybody's employed. The future's so bright you gotta wear shades.

The latest get rich quick approach involves marching into the new home sales office, putting your John Hancock on a contract, waiting six months to have your new home built, (never intending to live in it), then selling it the day after you take title and pocketing $50-75,000. 

Real estate is the rage. 

The ranks of the Sacramento Association of Realtors are rising faster than housing prices.  In numbers never seen before, school teachers, car salesmen, soccer moms, you name it, they're coming in droves, leaving behind their former professions, or ones they never had, all looking to get in on the new gold rush, selling houses for a living.   

In the resale market there are 183 homes listed for sale with nearly 50% of the monthly housing inventory selling in only 26 days on the market.  The median home price sits at $272,000 and by April 2002 will be at $304,000.   The average price per square foot is $148 and rising.  And there's only 2 months of inventory on the market meaning that if you're a buyer you'd better be on your toes.   

Optimism is unbridled and running loose in the streets. 

In fact, everyone is having such a good time playing real estate Monopoly and counting their profits that we figure this is a good time get out of town and into the hot tub, recalibrate, and head off to 2005 to see just how much money we'll all make and how far this crazy market ride will take us in a few years time. 

Fast forward to May 2005.  By the time we towel off here's what we see.

George Bush is just beginning his second term as president.  The world is a much different place after 9/11.  A string of hit primetime shows, including a new show called Lost, make ABC the ratings leader.  Brad and Angie are the new couple.  The U.S. unemployment rate is still a reasonable 5.1%.

Here in Folsom our town is growing.  The population has reached 67,000.  There's a new community called Empire Ranch bringing with it over a thousand new homes and Folsom's first golf course.  There are over 17,000 detached single family housing units, up nearly 3,000 from 2001.  There's even plans for a new mall.  It's the height of the new real estate gold rush. 

According to CNNMoney.com Folsom is ranked #34 out of the top 100 places to live in the United States.  And why not?  Especially if you own real estate.

In the resale market there is a shortage of homes to be purchased.  With only 143 currently listed homes for sale, buyers are facing an ominous task of finding a home they like, then engaging in all out hand to hand combat to get their offer accepted.  The time to sell a house is a ridiculous 20 days, with most selling at or above the asking price.  When we look up it appears that buyers are literally falling out of the sky, strewn everywhere, looking, begging, pleading for a seller to accept their overprice offers. 

The median home price is a staggering $500,000, up 39% since we left 2001.  If you're counting, and we are, the average price per foot for a Folsom home is now at $256, up 42% from 2001.  Living and owning real estate in California has made people some of the richest in America, on paper at least.  

As we look around we see a euphoria that is blinding to all but a few naysayers.  The majority believe there is no end in sight, or is there?  

The warnings of trouble are beginning to appear, but apparently not many people are willing to take notice. 

Numerous economic and cultural factors are causing a growing number of economists to use of a new term, "housing bubble."  Once the internet and TV talking heads pick it up panic starts to set in. 

Freddie Mac's chief risk officer warns that Freddie Mac is financing risk-laden loans that threaten their financial stability and that these loans "would likely pose an enormous financial and reputational risk to the company and the country."  Others warn of the risks posed by all the sub-prime mortgages being doled out and the likelihood that these risky subprime investments could cause a major economic meltdown if people can't make their new higher payments once these loans reset in a few years. 

 In California, home prices have escalated to an historic high of 9 times the median family income, taking affordability levels to all time lows.  Buyers are being priced out of markets.  Market data is indicating sales are slowing and inventories are rising.  All signs pointing to a correction in the housing market. 

To compound matters, the majority of consumer spending is being fueled by the related refinancing boom, which, unlike in years past, is primarily being done not to lower payments but to pull cash out to finance lavish lifestyles.  Once values begin to fall, and they look like it's only a matter of time before they do, this will stop people from robbing Peter to pay Paul.  The clouds are gathering for the perfect storm and it looks like a pretty good one.  Maybe it's time to jump back into the hot tub and get the heck out of here before things get really bad.  So in we dive and set the controls to take us back home, Spring 2010.

Wow, we hardly recognize the place.  It's a scene right out of the Planet of the Apes.   I can't help but think of Charlton Heston..."You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!"

Here's what we see.

Recession.

Everything has changed. 

Unemployment has doubled to nearly 10% nationally, California is mired in red ink, workers are being furloughed, and California's jobless rate hovers around 13%.

The median Folsom home price now sits at $351,000, that's a staggering 30% drop since we left 2005.  The average price per foot for a Folsom home has fallen just as precipitously all the way to $176.  That's a whopping $80 a square foot difference.  And just like the Apes, Short Sales and Bank Owned Homes now rule the landscape.  Banks have failed, industry leaders have been imprisoned, national lending institutions Freddie and Fannie have been taken over by the government. It's financial Armageddon, and no one is immune. 

The current administration, so desperate to gets things turned around, are offering tax credits to homebuyers, eliminating taxation on forgiven mortgage debt, and all but putting a gun to the head of loan servicers to try and get them to stop foreclosing on delinquent home owners.  It's a mess of historic proportions. 

Here in Folsom nearly 50% of all homes listed for sale are distress sales.  Vacant homes are the norm, not the exception.  Family homes once cared for so lovingly sit forlorn, dead lawns, many stripped bare of the amenities that once made their owners so proud. A last sad act, equal parts desperation, equal parts anger.  

Only 17% of homes available to be purchased are selling, mind numbing compared to the 83% in May 2005. 

Those that are lucky enough to find a buyer are willing to deeply discount their price to do it.  Sellers, once so full of hubris, now willingly welcome all but the most abrasive offers.  Now, it's not so much how much they've lost, but how much they'll save by selling now rather than holding out hoping for a turnaround. 

With all due respect to Gordon Gekko, greed has not been good. 

Now, as we move into our sixth year of the housing pullback, we realize that a bright future is not guaranteed.  Today's questionable decisions can turn into tomorrow's problems.  The great thing about history is that it offers valuable lessons and the chance to learn from mistakes to create a better tomorrow.   Hopefully we've learned plenty. 

Much has been lost, but at least we still have the squirrels.

From the more of the same department today Treasury officials acknowledged problems in the year-old mortgage-modification program and announced changes designed to address issues that have limited its effectiveness.  In an article written by MSNBC's senior writer John W. Schoen we're learning that things aren't going as planned for the Obama HAMP federal foreclosure relief program

In a nutshell here are the main problems as outlined by the congressional committee that met today:

• Only 170,000 homeowners have completed the process to get their monthly payments reduced out of 1.1 million who began it over the past year. 
  
• The number of seriously delinquent mortgages jumped in the fourth quarter

• Some 13.6 percent of all homeowners with mortgages -- more than one in seven -- are behind in their payments

• Loan servicers - the companies that handle mortgage payments on behalf of lenders -- have been slow to add enough staff

I've written about the troubled HAMP Program previously here, given today's news it's not looking like things are going to be changing anytime soon.