Sacramento Real Estate Views

Is It The Time To Buy?

Has The Moratorium Got You Thinking?

As I’ve said many times, I get questions everyday about all things real estate.  While I don’t consider myself to be the end all be all of real estate  knowledge, I do stay on top of what’s happening the our market, the economy and the national real estate scene.  I speak to Realtors all over the nation every week about their markets and this helps me to get a better sense of what’s going on.

Recently, an investor asked me if now was the time to buy in the Sacramento area.  His concern is valid as there has been a lot of press out there about the recent increase in inventory that is coming as a result of the moratorium that Fannie Mae and Freddie Mac have put on foreclosures that is ending on the 31st of January and the state legislation enacted in September of 2008.  Throw the economic woes into the mix that will effect the region and you’ve got quite a quandary.

This has some people sitting on the fence waiting to see if prices will decline further and if so, can they get an even better deal on Sacramento real estate.

Competition for Homes

Knowing when the right time to buy can sometimes be like trying to lasso an octopus.  There are many different variables that go into what the market is doing at any given time and trying to narrow that down can be tough.  One good indicator of late is the competition for homes.  If there isn’t any competition for homes, prices will go down and conversely if there is competition, prices will go up.

I just submitted an offer on a home for this investor, all cash, 30 day close at $1000 under the listing price.  I got an email back from the agent and there were already 2 offers on this home, one above and one at list.  The home has been on the market only 2 days.  It isn’t in the best shape but it’s workable.

The point here is that there are still buyers in the marketplace and homes still have multiple offers if priced right for the neighborhood they are in.  With the values being as low as they are, I don’t see this changing.  The inventory isn’t going to exponentially increase overnight and I believe the market will adjust to it when the increases do come.

Home Prices Have Declined

Over the last 60 days, prices have come down.  The neighborhoods my clients are shopping in have all come down a little.  There are better deals out there now than there were in November.  Will values drop more?  Probably.  How much?  Can’t say.  Depends on the inventory increases at this point.

The environment out there right now isn’t “flip friendly” which requires a change in strategy based on long term gain.  If a home purchased in this market is held for a period of 3 to 4 years, I believe the market will have appreciated to the point where what a home is purchased for today won’t make any difference at all.  It will have appreciated well beyond it’s purchase price.

“We Should Have Bought Everything”

One of my clients told me today that in the last downturn, some folks he was working with balked at purchasing some homes.  Then the market took off.  What they balked at had appreciated 50% over a 6 year period.  No matter what they bought, it was worth much, much more.

No matter how you dice it, it’s the time to buy, period.  It seems, with the values in most areas essentially the same as in 1997 or 1998, that in 5 years you’ll wish you had “bought everything” you could get your hands on.

Here is a great article on just that.  Smart money is buying everything they can.  This market won’t last and neither will the great deals in the Sacramento real estate.

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Tags: Sacramento homes, sacramento real estate agent

This entry was posted on Tuesday, January 27th, 2009 at 8:50 pm and is filed under Real Estate Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Tyler Wood said at January 28th, 2009 at 10:03 am

   I think we are saying the same things Rob. All markets are different so buyers need to look at each one individual rather than thinking they are all the same. That, plus the fact that many buyers have different objectives & motivations.

   Keep up the good work.

2. Richard Stabile said at January 28th, 2009 at 7:00 pm

   I think the people who have been on moratorium are on the market in most cases and attempting to sell.
   With all the money coming in the market we should see some buying. We are seeing interest coming in our market in Bergen County New Jersey.

3. Chad Lariscy said at February 1st, 2009 at 2:41 pm

   Rob,

   I like what you are saying,and I agree to an extent. My market is primarily a second home market and it is hard for me to advise anyone that it is absolutely the time to buy. Here in the North Georgia Mountains, we are just seeing the wave of Foreclosures that most of the other markets are already working through. So having said that, I feel we have a longer period of time than most markets to work through the inventory, during which time we will continue to see a increasing drop in prices.

   Thanks for the good information. Hope all is well with you and your family.

   Chad

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