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Offer Clause of the Moment
Increased Investor Presence in the Coming Year
I work with many all cash investors in the Sacramento real estate market. My feeling is there is going to be more investor activity in our area this year than we’ve seen in many years.
Here’s why:
1. The inventory will be increasing this year over last year.
2. This will depress values more than they have been depressed already.
3. That said, the perception from various economic sources is that we are well within 20% of the bottom of the market. This is when smart money comes out of the woodwork. (I’m seeing this in my business currently)
4. Not so smart money will be “waiting for the bottom” before they purchase. This won’t decrease the competition, just extend it for a longer period of time. By the time not so smart money finds out that the bottom has come, it will be gone. The media generally reports real estate info 90 days late.
The Ebay Approach to Getting Your Offer Accepted
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.
Read the rest of this entry »
Worst MLS Photo of the Moment
Photos SO Unispiring That I Became Inspired!
I ran across these to from the same listing in Sacramento today. Umm…I just don’t know what to say. If the banks only knew…
I’ve seen some great photos of homes before..this has got to be one of the best! This is what you get when your unlicensed assistant takes your pictures! I think it’s a water heater in an unpainted garage but I’m not sure! Nice taping job though!
Here’s another beauty!
This screams “don’t show this house so I can double end it!” I bet the view from the window was just as uninspiring! If this was the better choice of the two, eeeeesssssshhhhh!
These were the only photos on this particular listing! 
Another laugh from a market that has had it pretty bad of late. It’s better than crying, right?
Information from Metrolist, Inc.
January Interest Rates
The Lowest Ever
Interest rates have never been lower. I don’t know that they can go any lower than what they have been this month. While it’s possible to imagine that they could get into the low 4% range, I don’t know of any economist who thinks they will. That said, many of them have been incorrect about our current situation thus far. Going forward, it’s anyone’s guess as to what happens. The new administration is shaking things up a bit but that’s a wait and see.
It Just Isn’t Significant
The difference between a 5% and a 4.5% mortgage just isn’t that significant to wait and risk that the rates will acutally go up instead of go down.
A $200,000 at 5% over 30 years, just principal and interest, is a payment of $1073.64. The same scenario at 4.5% is just a $60 a month savings. The savings is $720 a year in this scenario and about $5040 over a 7 year period. We Americans aren’t very good at looking long term and the monthly difference between the two interest rates just isn’t enough to wait making a decision to buy, risk they will go up and then cost yourself money over the long haul if they do go up.
Paying Too Much at Auction for Sacramento Homes?
I’m working with an investor right now who was telling me a story about a friend of his who has a big team of people working to help him purchase homes at auction in south Sacramento. My investor heard him boasting about getting a beat up Sacramento home for $100K.
For my client, we acquired two homes. One for $77K with $1200 in pest work and about $5K in updating and another at $100K completely pest clear with new carpet, newer HVAC and ready to rent to the highest bidder right now. Positive cash flow immediately.
What’s he doing wrong? He is under the impression, like a lot of people are, that buying a home at auction is always the cheaper way to go when buying foreclosed homes in Sacramento. While this can sometimes be the case, often times it will cost you more money than if you were working with someone working for you.
3 Reasons Why Buying at Auction is Risky
Buying a home at an auction is the riskiest way to purchase a foreclosure for the following reasons:
1. You may not be able to inspect the home prior to purchasing.
2. You may have to come up with the money to purchase in hours rather than having a few days to get the money together.
Warren Buffett and Sacramento Real Estate
An article I read today from the New York Times written by Warren Buffett gave wisdom that can be directly related to the mindset needed to be successful in the Sacramento real estate market or any investment scenario. There is a lot of fear out there right now about not only real estate but the economy, personal finances and shadows moving in the night.
There is fear of fear itself. If I remember the quote correctly, the only thing to fear is fear itself.
On this point, Mr. Buffet wrote;
“A simple rule dictates my buying: be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.”
Warren Buffet
My guess from this statement is that it’s time to be greedy.
First Time Home Buyers are BACK in the Sacramento Real Estate Market
I had a nice experience at an open house. (Click here to see a GREAT deal on a home in Citrus Heights.) It’s nice to see first time home buyers back in the market.Enjoy and thanks for watching!
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