Sacramento Real Estate Views

“…Worse Than The Great Depression”

I Thought I’d Never See This

UPDATE 6/5: I just found this article and wanted to include it.

In an article today DS News, analysts are now calling our current housing downturn worse than that of the Great Depression.  The article cites that during the Great Depression housing values lost 31% and in our current downturn, we’ve lost in the neighborhood of 33% nationwide.

Simply an amazing time to be in this industry.  We’re seeing what our grandparents saw in the 1930’s.

Now the really bad news…

If There Was Ever A Case For Walking Away From Your Underwater Mortgage, This Is It

The article goes on to say that, after the Great Depression, it took 19 years for the peak in home values to be reached from where they first fell.

Let’s say that there’s no way that’s true now and take 5 years off.  That’s still 14 years to get back to where we were in 2006.  Sorry, in no way is it a good financial decision to hold onto an underwater mortgage for that long.

More Value Declination

Well I thought that was the bad part…the article also says we’re not at the bottom and we’re looking at 5% to 15% more losses in value this year.

Please keep in mind that real estate is very local and that what is occurring nationwide may or may not happen here.  That said, based on the past 6 months, it looks like the national and local pictures are pretty close.

I don’t think I have anything else to say here…for a change, I’m speechless!

If you’re considering a short sale, please call, text, email or simply fill out the contact form below.  I’ll be in touch with you promptly.

Looking for the value on your Rocklin home?  Please go to Rocklin House Values.com for neighborhood by neighborhood values in Rocklin.

Looking for the value on your Roseville home?  Please go to Roseville House Values.com for neighborhood by neighborhood values in Roseville.

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Tags: Sacramento real estate market

Is the Sacramento Real Estate Market at THE Bottom?

Finally!

The Wall Street Journal came out with an article titled “Housing Picture Brightens in California” on May 29th suggesting that the California real estate market may have hit bottom.

I created a video to address my thoughts on this article and how it effects the Sacramento real estate market.

Thanks for watching!

Tags: homes in sacramento, Sacramento real estate market

Sacramento Average Sales Price Increases

Sales Prices Increase for the Third Straight Month

For the third straight month, the Sacramento real estate market is showing signs of stabilization, even if artificially.  Sales of existing homes has increased, average sales prices have increased as well and the inventory of homes for sale has decreased.  However there is one lingering question:

What will become of those homes that have been foreclosed on but are not on the market?

According to an article in the San Francisco Chronicle, only 30% of recently foreclosed homes have been listed for sale.  RealtyTrac.com estimates that there are 80,000 homes in California alone that are sitting there, vacant and not on the open market for sale.  This has created an “artificial” stabilizing of the Sacramento real estate market.

Why?

There could be several reasons why they “shadow inventory” is out there.  It could be for accounting reasons, waiting to find out what Washington will do to bail out the troubled assets or controlling the inventory prevent further price deterioration.

I know that releasing all of these homes on the market at once, as I’ve been saying since last October, will create a glut of inventory that will crush values in our region.  With prices going up, why not let them sit there, control the inventory and drive prices up?  This would be one of the best financial decisions the banks have made in this mess.

Freddie & Fannie

I’ve heard recently from several sources that Freddie Mac and Fannie Mae will begin releasing some of their inventory to the market very soon.  A few listing agents that I know have said they have been told that there will be more homes coming to them.  Beyond that, what will happen to that inventory is anyone’s guess. (I’m getting tired of guessing!)

For now, I guess we should be grateful that the Sacramento market appears to be stabalizing even if it does look either a) short lived or b) artificially driven.  Time will tell.

Thanks for visiting

Tags: sacramento homes for sale, Sacramento real estate market

What You MUST know about the $7500 Homebuyer Tax Credit

This link is to my other blog article on my other site about this legislation.The government passed a bill, the Housing Rescue legislation, and gave first time buyers a tax credit of $7500 when purchasing a home between April 2008 and July 2009.  That’s nice and all but what’s the truth about this “gift”?  This video exposes THE detail about the government program that you’ll need to know.Frequently asked questions (FAQ’s) about this from the National Association of Realtors.  Also, quick facts about this from Joseph Griffin from Catawba Valley Real Estate Blog is helpful as well.Enjoy and as always, thanks for watching!

Tags: homebuyer tax credit, homes in sacramento, sacramento real estate, Sacramento real estate market

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!

Tags: First Time Home Buyer Info, homes in sacramento, homes in sacramento ca, Sacramento homes, Sacramento real estate market

A Sign of the Times

I’ve made a change in my career over the last week.  I’ve left my position at Pulte Homes, Inc. to go back into the resale side of the market with the #1 REO team in the Sacramento region.  I’m working with REO Deal Makers at ReMax Gold.

This change will be a good thing for my career as it will expose me to another side of this business that, frankly, I had pushed away.  I realized that learning this side of the business is an essential for any Realtor looking for continued success.  There was always something that didn’t feel right about “capitalizing on someone else’s misfortune” and that thought or perception, kept me away until this week when I began my new position.

The day I gave my notice I began getting calls from potential buyers which stands out because I had told no one that I was quitting my position and starting a new one.  I hadn’t given it any of my attention, it just happened.  One of those potential buyers is a great lady I had worked with about 2 years ago named Joyce.  Joyce is from Modesto but has relocated to the Roseville area to pursue a love interest.  She is about as saavy as they come in so far as investors are concerned.  She has done more with less than anyone I know.  This is one of the benefits of educated risk taking.

Today, we went out looking at bank owned properties.  This is my first excursion into that market and, I’ll tell you, it was an eye opening.  I found myself oddly affected by entering these homes knowing that someone had been forced to leave for financial reasons.  The conditions I saw were startling.  A couple homes we saw were in good enough areas but were just trashed inside.  These were newer homes all built within the last 10 years and some were in just terrible condition while others were in better but still tough condition.  The minimum repair bill was about $8K.  That said, all penciled out as profitable in the standard investment scenario.

I found myself fighting back a little emotion after visiting our second property.  I’m sensitive to the point of being sappy sometimes.   Joyce, however, was gleeful.  All a part of experience I guess.  There was a lot of opportunity in what we saw.  I understood how she felt.

What occurred to me was this:  As a Realtor, my business is neighborhoods and communities.  I feel a responsibility as a Realtor to do everything in my power to get these homes sold to families or persons who will take care of them and act responsibly to make these neighborhoods, now blighted with properties that are unmaintained and unsightly, better than they were before.  We’ve got to make it a priority for the sake of our communities to get our region past this crisis and act responsibly in the neighborhoods in which we work.

Naive? Probably but it motivates me and makes what I do for a living worth it. Cheesy?  Sometimes that description definitely applies! Sincere? Always!

Interested in a great deal on a home?  We’ve got plenty of choices in our market at the moment.  If you’d like to make it happen, give me a call.

Tags: foreclosed homes, foreclosures in sacramento, Sacramento real estate market

Affordability Is Returning to the Sacramento Real Estate Market!

Today, I received from one of our self proclaimed “bean counters” some awesome information that demostrates what we’ve been trying to portray for the last 6 months: The market is beginning to bottom out and the price reductions this market has endured for the last 3 years is coming to a close.

The balance between housing prices in our market and affordability is predicated on the ideal ratio of average selling price to the median income of the region. In 2002, the average sales price was 3.5 times the median income in the region. 3.5 times the median income is a healthy income to average sales price ratio. So, if you make $100,000 per year, the comfortable home price for your purchase is roughly $350,000.

The information for 2005 reflected just how out of whack our area was and why this price correction was imminent.

During 2005, at the height of the market, the average sales price was 7.9 times the median income of the region! With the healthy ratio being 3.5 times the median income, our current market condition now makes total sense.

Currently, we are at about 4.4 times the median income for the area. We’re not out of the woods yet but there is light at the end of the tunnel.

Greg Paquin founder of the Gregory Group, one of the few local pundits who has been more right than wrong in the current downturn, when asked about what the bottom of the market looked like for a recent SacBee article said “I think it looks like where we are. I think you’re going to see slow sales, but more consistent sales.”

He added “My sense is we’re going through the worst of it now, and that’s reflected in the prices we’re seeing. … My impression is the second half of the year is going to be starting to dig our way out of it or moving forward.”

He went on to say “I think with pricing (still falling) and sales holding constant there is a sense we are pretty darn near the bottom. I think we’re within 3 to 5 percent of that point with net pricing.”

Within 3 to 5 percent? Now that is light at the end of the tunnel!

Light at the end of the tunnel? Darkest before the dawn? Whatever….let’s get it over with and move on!

Tags: Sacramento homes, Sacramento real estate market, sacramento real estate market commentary