How do you know what a lake location is worth? How much value should you give to a house with a lake view compared to a house across the street without the view? I had this conversation recently with a real estate agent who had some questions about pricing a lake house, so I wanted to share some tips for uncovering value from an appraiser’s perspective. It’s honestly quite a bit in principle like valuing a golf course location. Have a read and let me know what you think.
5 Things to Consider When Valuing a Lake Location:
- Lake sales vs non-lake sales: It’s going to be important to find sales on the lake at some point because these sales will help indicate how much buyers have been willing to pay for a lake location. It’s obviously helpful if you have recent sales, but even if you have to look over the past ten or so years of sales, find something that sold and then compare how much of a premium it had at the time to similar-sized non-lake homes. For instance, if you find a 1600 sq ft house on the lake, compare this house to other 1600 sq ft sales at the time to extract the value difference for the lake. Or if you find a 2300 sq ft house on the lake, compare this house to other competitively sized homes at the time without lake locations. Once you find a few sales to work with, you can then apply the percentage difference between these sales to your situation. Keep in mind the perception in the market among buyers could have changed though over time, so know your market. Also be aware that builders may sell homes with very large lake premiums. It may be best to look at the resale market to see how much buyers are willing to pay without any builder mark-ups.
- Subject Sale: If the subject property sold previously in recorded MLS history, you may have a good example of how the market has viewed the subject property. Was there any premium for the lake in the previous sale? If so, how much? This can be great secondary support, especially if the subject property has sold multiple times recently.
- Use Other Competitive Lake Houses: You can attempt to find a competitive neighborhood with a lake, extract the percentage value of the lake by completing Step 1 above, and then apply this percentage to your situation. However, a competitive neighborhood might be really far away, and the real issue becomes whether the community is truly similar or not. These are important things to keep in mind because you want to compare apples with apples so to speak.
- Conversation with Local Pros: Talk to local pros who know the market well, explain your situation, and ask them questions. It’s ideal to compare actual sales, but if there are none for whatever reason, nothing will beat the knowledge of agents who know the idiosyncracies of a market (they’re often spot on – though not always). Also be sure to look at withdrawn listings and current listings to see if there is any potential helpful data to mine.
- Be Aware of the Lake: Be aware of the location of the house on the lake, the view and how much frontage the property has. Also, can a dock be installed? If there is a dock, does it matter much for value? Does the property owner have rights to the lake? Are those rights any different from the rights for other nearby properties? This probably isn’t an issue for a man-made lake, but having water rights (riparian rights if you want to sound fancy) will very likely make a value difference elsewhere.
I hope that was helpful. Anything else you would add? If you’re in real estate, what have you learned about lake locations?Leave a comment }
Everyone has been saying cash investors are leaving the market in Sacramento. Yes, there has been noticeably less cash being spent lately. Here are five things to know about cash sales in Sacramento County.
- Half of cash sales in Sacramento County are under $200,000.
- Cash sales are down about 14% since Q1 2013 in the entire county.
- Cash sales under $200,000 have decreased by about 13% since Q1 2013.
- About 22% of all sales this quarter in the county have been cash purchases.
- Roughly 37% of all sales under $200K this quarter have been cash buyers.
Right now cash sales are at a level close to when the market hit bottom in early 2012 for under $200,000 and even before for the entire county. Things have really begun to shift over the past two quarters, haven’t they?
This chart shows where cash is being spent in the Sacramento market. As you can see, the bulk of cash sales are under $200,000, but there is still a healthy dose of cash between 200-300K. These numbers of course only show the total percentage of cash sales, so it’s important to realize this doesn’t address how much competition there is in the market. For instance 73% of all sales under 100K have been cash purchases and 35% of all sales between 100-200K have been cash. This helps us see there is vastly more competition under 100K than above. Stats like this are important because they give insight into the appetite investors right now, and they can even help establish a plan for which price segments to focus on.
Questions: Any thoughts, insight or stories to share? I’d love to hear your take.Leave a comment }
As the year fades away it’s now time for the beginning of what I call crystal ball real estate posts. What do I mean? Everyone will be speculating about what is going to happen in the 2014 market, and most posts will make very vague predictions. Since I don’t personally own a crystal ball, I’ll steer clear of some of that, yet I still want to point out some fundamentals to watch. Let’s think together below.
Watching the Layers: I keep mentioning the idea of the multi-layered real estate cake analogy. I don’t mean to be repetitive, but the gist of this analogy is that value in a real estate market is like a multi-layered cake since there are many “layers” in the market that help impact or create value. As you can see above, when “layers” like interest rates and unemployment are low, it tends to create space for values to rise. At the same time, it’s important to realize the Fed can artificially manipulate a market by lowering interest rates, which means jobs end up playing a lesser role in driving the housing market. This is definitely part of what happened with our recent real estate boom (doesn’t sound too healthy, right?).
Now let’s add in the extra “layer” of housing inventory. I know this is a busy graph, but spend a minute digesting what is happening here, and then I’ll make things easier on your eyes by zooming in on the trends.
After years of declining values, the Sacramento market hit the bottom in the first quarter of 2012. Can you see that above? It’s important to note that as values began to increase, there was a huge drop in inventory and interest rates persisted to decline – both of which put upward pressure on home prices.
Keys for 2014: Investors, low inventory and historically low interest rates have been the X-factor in the most recent value boom in the Sacramento area. It helps of course that the unemployment rate has been trending downward, but there is still quite a bit of healing needed for the local economy. As you can see in the graphs above, housing inventory and interest rates have begun to increase lately, which has been putting pressure on rising values. Personally I tend to think interest rates moving up a bit will matter less than what happens with inventory. Rates are still very low and their increase does make a difference with how much buyers can afford, but ultimately the market feels far more sensitive to inventory increasing. At the same time, cash purchases have been declining for two quarters, which is also helping to cool off values from an unsustainable rate of appreciation. It’s also worth mentioning that it will matter if Blackstone goes for Round 2 or not. Last year this one investment fund purchased anywhere from 1100-1500 houses (depending on whose numbers you use). They have been seemingly slowing down for the time being, but if they decide to ramp up their local focus again, it could effectively make the market more competitive by decreasing inventory.
By the way, this is my spoof appraisal ad for Black Friday. What do you think? I posted this on my Facebook page last week for fun. My advice: Even though I want your business, don’t buy anyone an appraisal for Christmas.
Questions: Any thoughts, insight or stories to share? I’d love to hear your take.6 Comments }
I’m not trying to be THAT guy by starting a business conversation during Thanksgiving, but this is important. Did you know the deadline to appeal property taxes in Sacramento County is on Monday? Since December 2, 2013 is the cutoff point, I’ve boiled down the process to three steps of what you need to know. Please pass this along to friends and clients.
Three Steps for Disputing Property Taxes in Sacramento County:
- Look up your assessed value here: Your assessed value listed at this link is supposed to be what your home was worth on January 1, 2013 (NOT today’s value). Does the value seem reasonable? If yes, don’t do anything. If not, go to Step 2. Keep in mind every $10,000 of assessment ends up costing you about $125 out of your pocket. This means if you are overassessed by $50,000, you’ll be overpaying about $625 this year in property taxes. This is good to consider so you can determine if it is worth your time and effort to move forward.
- Request a free informal review by the Assessor here: You can ask the Assessor to take a look at your assessed value for free. This is not an appeal, but only an informal review (also known as a “Prop 8 Decline in Value” form). If the Assessor responds to you at some point, great. But if they don’t agree with your opinion of value after the deadline to appeal has passed (even if you are right), you’re out luck since you didn’t formally appeal (Step 3). This step is better than nothing (and it’s free), but Step 3 is best.
- File a formal appeal: All you need to do is fill out the Application for Changed Assessment (PDF) (cost is $30) and turn it in before the deadline. Along with the application it’s best to provide some support for what your property was worth on January 1, 2013. Ideally you should provide a list of comparable sales around January 1, 2013 (NOT current sales) and write up a few sentences about how these sales compare to your property. Let’s be honest though, it is a busy week ahead, so if you don’t have time or ability to gather support in these next few days, just fill out the application anyway. The most important thing this late in the game is to get the application in. You can always provide support later (or hire someone like me to help you with that in the future if the Assessor sends you a letter about an appeals hearing). The main benefit of a formal appeal is that it entitles you to carry on the conversation with the Assessor if they disagree with your opinion of value. You do not have the right or power to keep the appeals conversation going when you only do Step 2.
Please let me know if you have any questions. I really understand how this process works, so I’ll be glad to answer any last-minute questions you might have.
Have a wonderful Thanksgiving. I hope it’s your best one ever.
Pro Tip: Don’t talk about property taxes at the Thanksgiving table.7 Comments }
The unemployment rate for the past two months was finally published, so I hope to get you up to speed today. If you didn’t know, the government shutdown set EDD back, so that is what caused the delay. Here are a few graphs to not only see the job market in action, but also property values. Let’s take a look at some trends for Sacramento County, California and the United States. What stands out to you?
Here is a glimpse of jobs and values in Sacramento County over the past couple of years. The unemployment rate in Sacramento County is 8.4% (October 2013) and the median sales price is $255,000 (October 2013). This is the seasonally unadjusted unemployment rate, whereas the seasonally adjusted rate is 8.7%. By the way, if you’re riding the Bitcoin wagon right now, it looks like the median price in Sacramento County is 308 Bitcoins.
There is a tie between jobs and real estate, but the real estate market does not always fluctuate right away because of jobs. For instance, property values here in Sacramento hit bottom in early 2012, but the unemployment rate hit its peak about 18 months earlier in July 2010. This tells us it took a year and a half for the real estate market to stop declining despite unemployment beginning to trend downward. Moreover, even though joblessness has been very high, the real estate market has seen an exponential surge in values over the past 12-18 months. The driving force was mainly historically low interest rates, cash investors and low inventory – not vast improvements in the local job market. This goes to show there are many different “layers of the cake” when it comes to things that make real estate values move.
The unemployment rate in California is currently 8.3% (or 8.7% for the seasonally adjusted rate) and it’s 7.3% in the United States. The graph immediately above shows 65 years of unemployment in the United States, and it’s a good reminder how trends move up and down like a roller coaster.
Questions: What is the relationship between the unemployment rate and property value? Any thoughts, insight or stories to share? I’d love to hear your take.Leave a comment }
I started scratching out blog posts almost five years ago, and I’ll admit I’m excited to hit post #1000 at some point next year. Along the way it’s been fun to build great relationships, learn, share information, earn some new clients, get speaking gigs and gain attention from local and national media. There are surely many ways I can improve, but I am proud to say I’ve had staying power thus far, and I think I’ve learned a thing or two about running a successful blog for business.
The truth is so many blogs start out strong, but then drop off the face of the earth for one reason or another. Yes, there is a season for everything, so inevitably some blogs will die. That’s okay. Yet if you want to have stamina and find success for your blog, I might suggest considering a focus on the following core issues. These are things I believe are key ingredients for a successful blog. Enjoy.
5 Essentials for Running a Successful Blog for Business
1) Be original: Take the time to craft your own thoughts. Who are you and what do you know that will help or entertain your audience? Let readers get a sense of your personality and expertise. Share photos, video or words. Do what works best for you and your readers, and be sure to not copy and paste other people’s articles and consider them posts.
2) Know your audience: Who are you writing for? What types of people and business do you want to attract? This is your target audience, and each post should keep this group of people in mind. You are not doing hardcore sales, but rather focusing on providing helpful information (be a resource). What questions are your clients and potential clients asking? Share information like this by posing an issue and then simply providing the answer. In fact, check your sent email folder for post ideas because you’ve probably already answered some questions recently that can turn into fantastic posts. Remember, each post doesn’t have to be home run, but if you get on base here and there, eventually you’ll score runs over time (connections and business). If you cannot quickly say who you are writing for, it’s time to give that some thought. My audience? I write for real estate agents, home owners and the real estate community in general.
3) Be consistent: Having a regular blogging rhythm is important so readers can know when your posts are going to show up. I write two to three posts a week, so my subscribers know what to expect from me. I know multiple posts each week would be exhausting for some, so I might suggest starting out with once a month, bumping it up to twice a month and then maybe once a week. If you want to be dominant in your niche online, you simply have to find the time to create new content and do that with some sort of frequency – even when you feel too busy. Remember that regular posts keep you in front of your target audience, they build your expertise and search engines like to see fresh content.
4) Get organized: I would not be able to write regularly if I woke up each day and thought, “hmm, what should I write today?” This is why I created a blog fodder sheet that helps keep 10-20 post ideas in front of me at any given moment. This single-page as shown below hangs in my office on a cork board behind my computer screen, and I use it to jot down post ideas whenever I have them. I also keep a few folders on my desktop called “Things I’ve seen lately” and “Market Trends” to help keep a running group of photos and stats that might work at some point for future posts. When you get into the rhythm of blogging, you’ll start to think, “oh, that’s going to be a great post”, and you can simply save a photo or thought for a future time when you’ll actually write it. This system is simple and it’s worked extremely well for me to be more organized, save time and stay focused on my target audience. Download blog fodder sheet on Slideshare.
5) Get Face Time: Part of being successful online is finding ways to connect your business offline. Blog posts, tweets and Facebook statuses can be great for connections, but it’s also important to be intentional about getting in front of clients regularly. Yes, I mean in person. Go to lunch, join a committee, serve on a board, give a presentation or drop off coffee and scones. Just do something. As an example, this year I made it a goal to teach classes and speak in at least one real estate office per month (I ended up doing two per month), and I’ll say it was very good for business. Why? Because I was able to share helpful information in person, answer questions and build connections. In all cases strangers became acquaintances at the least, but in some cases they also became blog subscribers and then clients.
Did I mention anything revolutionary? I’ll be the first to say no. That’s good though because it means virtually anyone with a little focus and intention can be a successful blogger. Yes, it is a time commitment, and I won’t water that down. But putting in the time to become a dominant trusted force online can be profoundly rewarding (and fun).
Thank you: By the way, thank you to all who have subscribed and followed the conversation on my little corner of the web. I’m humbled by that and I greatly appreciate it. If you’ve been tinkering with blogging yourself, send me an email or share the link below. I’d love to see what you are doing.
Questions: Any other blogging essentials or tips to share? What have you learned along the way? Also, do you have any creative ideas for me on post #1000?6 Comments }
Today I want to share a few things to know about appraisals after a house has burned down. This isn’t a very easy subject – especially for property owners looking for information after a recent fire. If that’s you, my heart goes out to you and I am sorry about your loss. I hope some of this information helps give a little more context for your situation. If you have any questions, feel free to ask.
Here are a few things to know about appraisals on burned houses. Yes, this is me inspecting a charred home in the Natomas area of Sacramento a few weeks ago.
Repaired Value: Usually the client is going to want the appraiser to do an appraisal as if the fire did not happen, or in other words give a “repaired value” instead of an “as is” value. In fancy terms, the appraiser will use a hypothetical condition to appraise the property, which means the appraiser considers something as fact for the sake of analysis even though it is not true. In this case the house is considered to be in whatever condition it was before the fire even though it is obviously damaged.
Inspection: The appraiser will likely do a physical inspection of the property as long as it safe to do so. Of course a client may also allow an exterior-only appraisal (aka “drive-by”) if that suits their needs. The appraiser can do whatever inspection is required so long as the appraiser can get enough information to render a credible value.
Hiring an Appraiser: The insurance company or a contractor will likely hire the appraiser. The property owner can of course find an appraiser too. I recommend connecting the appraiser with the insurance company to be sure the appraiser and insurance company are on the same page about methodology, timeline and pricing.
Property Research: The appraiser will be trying to understand what the house was like before the fire, so the appraiser will gather details about the house from a variety of sources like a physical inspection, Tax Records, the home owner, neighbors if need be, Google Maps, aerial views and old MLS listings. All or some of these sources can begin to piece together facts about the home and help the appraiser do an appraisal despite the damage.
The Fine Print of a FEMA Flood Zone: If you live in a FEMA flood hazard zone in the Sacramento area and your house has severe damage from a fire, it is important to know the fine print. Here’s how it works. Due to FEMA guidelines, you can improve a home up to 40% of the assessed structural value of the house or obtain an appraisal and get up to 50% of the market value of the structure. Note that I said value of the “structure” because an assessment is usually broken down between “improvements” and “land”. This means if your assessment is $200,000 with $160,000 of that assessment accounting for improvements (the structure) and $40,000 for land, you can only make $64,000 in repairs (that’s 40% of $160,000). That won’t go very far when there is significant damage, which unfortunately sometimes means home owners literally cannot repair their homes. However, you can also get an appraisal to try to capture a bit more value. An appraisal can work to your advantage when the assessment is really low (if you purchased a long time ago or bought several years ago before the market saw dramatic increases in value). The appraiser will do the valuation as if the house was NOT burned, and then 50% of the market value of the structure can be used for repairs. It would be great if 50% of the total market value of the house and land could be used, but it is only 50% of the market value of the structure (or in fancy terms, 50% of the depreciated “as is” cost of improvements). The market value of the existing structure is found by doing The Cost Approach in the appraisal, which basically considers the cost to build, amount of depreciation the house has (before the fire) and the value of the land.
Please let me know if you have any questions or if I can assist in any way with your situation.6 Comments }
Did you ever dream of winning a shopping spree as a kid? I used to imagine myself having ten minutes to fill up a cart at Toys ‘R Us with whatever I wanted. I would’ve headed straight for the baseball cards, bikes, toy guns and sports equipment. Of course I was never lucky enough to do something like that, but I’m still holding out hope for a Home Depot or Lowes spree one of these days.
$196 Million of Local Real Estate: If you didn’t know, there was a $196 million dollar real estate shopping spree that happened in the Sacramento market over the past year or so. As reported by The Sacramento Business Journal, the private equity fund Blackstone purchased roughly 1,100 homes in the local market since January 2011 (with the bulk of these purchases being after August 2012). In all Blackstone has acquired about 21,000 properties in the United States over the past year. In the Sacramento area they’ve done business as THR California, IH2 Property West and IH3 Property West, and they’re holding their properties in hopes of making more money by creating bonds from rentals.
Goodbye Blackstone? Over the past months Blackstone has seemingly begun to pull back on their aggressive purchasing plan. They’re still buying properties, but as of late they’ve been laying low. Some say they are done, but at the same time their system has worked well and they can easily get things moving with IH4 in 2014 if they want. Ultimately their local presence lately has felt nothing like it was last year when they were a definite catalyst in driving up values for the rest of the market. Depending on how you look at it and whether you bought or sold this past year, it’s probably either good or bad to have had one investment fund step in to buy 1,100 properties in such a short time span. Instead of parsing the arguments on both sides though, I’d rather focus on their slowdown and simply say it looks like we are seeing Blackstone’s year of market dominance fade….. for now at least. In the mean time we can expect to continue to see conventional and FHA buyers pick up their slack while Blackstone and other cash buyers are more dormant or pull out of the market. While it’s easy to criticize Blackstone, let’s consider one last thing. If you look at the graph above, you’ll see they came in at just the right time as the real estate market hit bottom after years of decline, and they also look to be slowing down at a good time also. Maybe there is a business lesson here to consider?
UPDATE on 11/21/2013: The Sacramento Bee posted a story that states Blackstone has purchased nearly 1,500 homes in the Sacramento area. RealtyTrac shows closer to 1100 and Tax Records is about half of what RealtyTrac shows. All things considered, it is not easy to track the actual number because different sources say different things.
Questions: Any thoughts on Blackstone as they have been slowing their pace? What store would you like to win a shopping spree at?4 Comments }
I had a conversation recently with a home owner about the online valuation site Zillow, and it went like this:
Owner: Your value was right on.
Me: Wonderful. That’s great to hear.
Owner: It was right in line with Zillow.
Me: Oh, okay.
This conversation made me smile since like many consumers, the property owner thinks of Zillow as the standard for accuracy. After all, Zillow is a very well-known brand that is becoming a household name. Heck, even President Obama used Zillow to moderate a conversation on housing a few months ago. We still need to ask the question though, how reliable is Zillow? Let’s take a look at 10 recent actual appraisals compared with “Zestimates”. I would be curious to hear your take too – especially if you’ve had a recent appraisal. How much of a value difference was there between the “human” (appraiser) and “machine” (Zillow)?
- Tahoe Park Area House: Appraisal: $133,000; Zillow: $114,173 (-14%)
- Del Paso Manor House: Appraisal: $332,000; Zillow: $305,000 (-8.1%)
- Midtown Fixer: Appraisal: $130,000; Zillow: $203,000 (+56%)
- Citrus Heights House: Appraisal: $278,000; Zillow: $240,000 (-13.7 %)
- Citrus Heights House: Appraisal: $138,000; Zillow: $194,000 (+40.6%)
- College Greens House: Appraisal: $259,000; Zillow: $282,000 (+8.9%)
- Fair Oaks House: Appraisal: $630,000; Zillow: $612,000 (-2.8%)
- Galt House: Appraisal: $191,000; Zillow: $188,000 (+1.5%)
- Mather House: Appraisal: $255,000; Zillow: $238,000 (-6.7%)
- Capital Village House: Appraisal: $233,000; Zillow: $191,000 (-18%)
Appraisals vs. Zestimates: First off, I am not anti-Zillow since I believe there is a place for Zillow in today’s world. I’m actually a fan of their graphs, rental estimates, neighborhood information and the power of their brand. Ultimately I tend to give little weight to “Zestimates” for the following four reasons:
- Condition: Zillow has no idea about condition or upgrades. This often makes an enormous difference in value (obviously).
- Knowing the Niche: It is very challenging for Zillow to capture the idiosyncracies of niche areas that fetch higher or lower prices for whatever reason.
- Margin of Error: Zillow posts their margin of error, and it shows they are off by quite a bit (click the link). Of course to be fair, appraisers can be off too.
- Distressed Sales: I’ve noticed at times Zillow struggles to see beyond distressed sales. For instance, the vast majority of sales in Capital Village (#10) have been short sales recently that sold for too little, and Zillow was unable to interpret true market value around $220,000 to 230,000 compared to all the distressed data points around $190,000.
Question: Any thoughts, insight or stories to share? I’d love to hear your take.6 Comments }
I could tell you what’s been happening in Sacramento’s real estate market, but why not show you instead? Of course there are a handful of things to look at, which is why there are two options for reading this post:
- Briefly scan the graphs below in probably 30 seconds.
- Take a few minutes to digest the graphs and commentary.
Enjoy and let me know what you think.
The median sales price is currently at $252,000 in Sacramento County. When we look at the average price per square foot though, the market has been very flat for four months as it has been hovering between 162 to 163. I’ve been seeing lots of current listings priced at levels more consistent with July or so, which causes me to not put too much weight in a slight increase in median price last month.
Here is a closer look at median sales price, inventory and interest rates. As you can see, prices have begun to stabilize as inventory and interest rates have increased. But it’s also Fall, so it’s completely normal to see a slowdown since that is usually what happens. Real Estate Broker Joel Wright did a study recently of the past 25+ years and found there is a dip 75% of the time during this season.
This is a graph from Trendgraphix and I like the way it shows the story of inventory. When zooming in on roughly only the past year, it’s easy to see that inventory has more than doubled in recent months (whereas my graph above looks like there has only been a slight uptick lately). What does it mean that there are 2.3 months of housing supply? This means if zero new listings hit the market it would take 2.3 months for all these properties to sell. Remember, inventory is easy to find out. It’s just a matter of dividing the number of current listings by the number of sales over the past month. I actually have a brief YouTube tutorial here (or below) in case it’s of interest. It’s good to know how to make these calculations so you are not waiting around on Trendgraphix or other sources to tell you what you need to know.
The absorption rate is basically how fast current listings are being absorbed (sold or pended) each month. It’s an inverse of the months of inventory really, so this rate declines as inventory increases. Right now the absorption rate is 44.3%, which means that 44.3% of all listings are being absorbed on a monthly basis. All you need to do to figure out the monthly absorption rate is divide the number of sales over the past month by the number of current listings.
Cash sales in Sacramento County declined by over 12.5% since early 2013, and cash sales under $200,000 are currently at 35.6% of the market (only for the first 40 days of Q4 though) compared to 50% the previous in Q2 2013.
I’ve mentioned this several times lately. Cash investors have been exiting the market, which has given opportunity for FHA buyers and conventional buyers to gain a greater hold on the market. This is good news for neighborhoods to get more owner occupants (assuming of course the owners take care of their properties).
It’s easy to vilify cash investors since many first-time buyers were beat out of the market from big investment funds flexing million dollar muscles, but it’s important to remember a few things. First, many investors entered the market when it bottomed out in early 2012. There is nothing wrong with being savvy and coming in at the right time. Don’t you wish you did that if you had the means? Second, a rapid increase of cash purchases was one of the reasons why we saw exponential appreciation in value over the past year. This is good and bad depending on how you look at it, but many home owners who needed to sell or refinance should probably be thanking investors (as well as writing a letter to The Fed for keeping rates artificially low). Lastly, in some sense I think investors have really helped revive the market over the past few years with so many flips. It’s nice to have distressed inventory purchased, rehabbed and then sold because that improves our housing stock. Granted, there are certainly drawbacks to having too many investors in the market, and I don’t think anybody is weeping since Blackstone has been pulling back on their purchasing strategy lately. All I’m saying is there have been some positives too.
We have pretty much bottomed out when it comes to foreclosures. Short sales have seen a rapid decrease also. The market used to be utterly driven by distressed sales, but that’s no longer the case. Yes, distressed sales do tend to sell at lower levels still in many cases, but they are not driving the rest of the market right now. When it comes to foreclosures, there is very little room to go down. In fact, I’ve been seeing slightly more REO listings lately, which probably explains the very slight uptick in bank-owned sales over the past month. But ultimately we’ll see what the stats say after a couple more months (keep in mind banks don’t usually foreclose around Christmas too, which could halt some of the data).
Unemployment in Sacramento County has been trending downward for a few years, but let’s be honest, there are still far too many people looking for jobs. The unemployment rate for September 2013 was not announced on time due to employees at EDD being furloughed in light of the government shutdown (sorry to bring that up). We should see new stats in about two weeks.
Share the Graphs: As always, you can use these images unaltered in your newsletter, on social media sites or blog posts (just link back). See my sharing policy for more details.
Question: Any thoughts, insight or stories to share? I’d love to hear your take.4 Comments }