Posts from — November 2009

The Sacramento Appraisal Blog is hosting a little contest for you, and the prize is a free $125.00 Residential Natural Hazard & Tax Disclosure Report by GeoAssurance. It’s what you wanted for Christmas, right?

These types of reports give great detail for any environmental hazards surrounding your property, and you can use the NHD report for any local residential property you want, whether for business or personal use (or for a friend or family member).

All you have to do is comment on THIS blog post below or tweet the following message: ”Christmas Contest from @SacAppraiser: FREE Natural Hazards Report http://bit.ly/7BKVzX”

The Fine Print: Anyone can enter. You must live in or do business in one of the following California counties: Sacramento, Placer, Yolo, El Dorado, San Joaquin, Stanislaus, Merced, Yuba, Sutter, or Solano. Each person only gets one entry, but if you have a Twitter account like me and you re-tweet this post, you can have two chances to win (blog comment and tweet).  The NHD report is good for one residential property located in one of the aforementioned counties. A winner will be selected on December 21, 2009 at 3pm PST and announced here and on Twitter. If you do not provide accurate contact information, someone else will be selected. 

Questions? Call 916-595-3735, email ryan@lundquistcompany.com or message me on Twitter at @SacAppraiser. 

www.SacramentoAppraisalBlog.com Win a FREE Natural Hazards Disclosure Report: A Christmas Gift from The Sacramento Appraisal Blog

I had a little break in life over the past ten days. It was so relaxing to enjoy Huntington Beach in Southern California with the family. Now I am back in action and invigorated to get going for the last bit of 2009.

While spending time at Sunset Beach I snapped the following image. This photo is interesting to me because it’s definitely a “sign of the times” and even ironic in that I wonder if there would be enough time to escape to higher ground if a large earthquake hit. I am curious too how property owners (including prospective owners) feel about this new addition to their beach.

If you are interested to read more about tsunami signs, you can visit the California Department of Transportation website to see different types of signage as well as tsunami sign policies.

How does this sign strike you? What does it make you think of?  Feel free to comment below.

www.SacramentoAppraisalBlog.com Tsunami Hazard Zone: Photos from the Field

Congratulations to Exit Realty West for their fantastic Christmas CanTree auction last night. The event was managed well (with humor) and there were so many generous Realtors, agents, mortgage consultants, and others that handed over cash for gift baskets, 49ers tickets, wine bottles, Kings tickets, cookies, and other random stuff. I know Jeff Dominguez and Francisco Cuellar of Exit Realty West put in some hard work to pull this off. Great work guys!! Thank you for advocating for families in need and providing a hub to bring others together to participate. 

The photos are a bit blurry. My mobile phone takes really great pictures, but when it comes to shots in a dimly lit room -  not so good.

www.SacramentoAppraisalBlog.com Exit Realty West Hosts Successful CanTree Auction

During this time of year I often come back to one of my favorite images from the Lundquist family album. If you’re anything like me, life is starting to feel stressful, Thanksgiving plans are in motion, the December schedule is getting too packed already, and you’re wondering if you’ll have any sense of peace during the holiday season. This picture helps me put things into perspective.

Let me introduce you to my grandparents, mother, and the four-year old version of me and my twin brother. This photo was taken during a time when my family had very little money as my mother was a single parent doing her best to work full-time and raise us boys. We lived a modest lifestyle out of necessity, and so when December rolled around, there wasn’t much to cover Christmas gifts. My Mom had a total of ten dollars, and since she was too proud to accept additional funds from family members, she made due with what she had.

When I look at this post gift-unwrapping picture, I see two extremely happy boys and an amazing mother who stretched out ten bucks to provide both of her sons with a superman t-shirt and cape, Mork & Mindy egg, coloring book, and soccer ball.

Maybe it’s just subjective sentimental goo, but this photo gets me thinking about what really matters and even how I can enjoy the coming month ahead. There are some real nuggets of truth here: Family time is so important. Money doesn’t make us happy. Humble circumstances can teach us valuable life lessons. Moms are amazing. Christmas is not about the gifts. Financial hardship doesn’t have to steal our joy. Life is good. There is much to celebrate and be grateful for. We need to savor the time we have with our kids.

How do you plan to find joy in this next month?

www.SacramentoAppraisalBlog.com How $10 Made Two Boys Happy on Christmas

Yesterday I posted a graph showing the difference between assessed value and market value. Today I have one more real-life example of this phenomenon. The property below was assessed at $210,000, and after my tax appeal process I determined the home to be worth $130,000. That’s quite a difference and represents roughly $800 in taxes. Ouch.

The subject property is around 1400 square feet and all blue dots above represent the past 2.5 years of neighborhood sales between 1200-1700 square feet. This range of square-footage is meant to show comparable properties to the subject since a typical buyer would likely look in this range when house hunting. The vertical line represents January 1, 2009, which is the date of assessment.

As you can see, an assessed value at $210,000 looks higher than basically all sales in the neighborhood, and actually more consistent with a home value from previous months or years. It’s true that a property can sometimes sell at the highest level in the neighborhood, but the subject property does not warrant such a circumstance. When observing recent sales above $150,000 in the market, it’s clear that the vast majority of these sales come from superior tracts in the market area or are remodeled throughout (sold above all other sales because of upgrades). 

I am not saying the Assessor’s Office gets it wrong in every case. That’s not true, and I certainly do not wish to vilify the Assessor because that’s not the way I do things. I’m simply saying that in this case, and in others I have worked on lately, assessed value should have been much lower. I typically take on tax appeal situations where the home owner is clearly over-assessed, and so there is an obvious potential economic savings to be had. Most of the properties I did not take on this year were assessed fairly well or off by 5-10% (too high). 

If you have questions, give me a call at 916-595-3735.

www.SacramentoAppraisalBlog.com The Assessor says $210k, but Market Value is $130k: A Real Life Property Tax Appeal Situation

This is a graph I put together earlier today for a home owner as part of the total package for appealing his property taxes. All dots represent model match sales over the past three years in a specifically defined neighborhood in the Sacramento area. The Assessor’s Office bases their value for this year on January 1, 2009, which is represented by the vertical line. For reference, I also included all model match sales through November 2009. What do you see? How does this graph strike you?

When looking at all model match sales, it’s not hard to see that the Assessor valued this property too high. In this case, the assessed valued was only about $30,000 higher than true market value, but this amount is still $300+ out of the home owner’s pocket for the year. It’s more common for me to help property owners dispute their taxes for residential properties when there is a greater savings of $500, $1000 or even thousands of dollars, but in this instance the home owner felt strongly about moving forward to contest the Assessor’s value.

Let me know if you have any questions. You are welcome to call me at 916-595-3735 or visit www.SacramentoTaxAppeals.com. Remember, the deadline for appealing property taxes in many counties surrounding Sacramento is November 30, 2009.

www.SacramentoAppraisalBlog.com The Assessor’s Value vs. True Market Value

I wrote previously about the “Bursting of the Duplex Market in Sacramento“, so I figured I’d also provide a graph of the fourplex market so we can see visually what has taken place over the past three years in Sacramento County. Yes, I know Sacramento County is a large territory representing many neighborhoods and sub-markets, but I think this trend graph tells a story nonetheless. All blue dots below are sales based on data in Sacramento MLS.

Isn’t it amazing to see the impact of the housing bubble burst? Three years ago many quadruplex units in Sacramento County were selling between $400,000 to $600,000, but the bulk of sales lately have been easily hovering around $200,000 +/- or lower. With prices so low right now, many investors have understandably been purchasing 4-plex units. The ideal scenario would be to pick up a quadruplex, have postive cash flow, and then re-sell the property in a number of years when the market turns around.

I actually just finished a property tax appeal for an investor who purchased a fourplex in late 2009 for under $200,000, but the Assessor still had his property valued in the high $300,000s. He is scheduled to pay over $1,000 too much in property taxes this year because the Assessor’s records are not consistent with realistic trends in the marketplace. This is a common problem for so many properties that sold near the top of the market and are now re-selling in today’s market.

Let me know if you have any questions. Comments are welcome. Ryan 916-595-3735.

www.SacramentoAppraisalBlog.com The Crashing of the Fourplex Market in Sacramento

What sort of a price difference is there between bank-owned properties (REO), short sales, and arms-length transactions in the market? For an example, let’s take a look at a trend graph of all sales in Rancho Cordova below, where blue dots are REO sales, green dots are Short Sales and red dots are typical arms-length sales (per Sacramento MLS).

Each neighborhood, niche, and location will differ in results, but generally speaking, like the data above seems to show for Rancho Cordova sales over the past 2 years, buyers tend to pay more for houses that are non-distressed transactions (notice how the red dots on the graph above tend to be located toward the top and NOT the bottom). When it comes to REO properties, it looks like the price level is a bit higher overall than short sales, though there are quite a few short sales on the upper-end of the market too. In fact, both Rancho Cordova and Sacramento County saw a 7% increase in short sales last year in comparison to the year before, so clearly there is a greater acceptance for short sales in the marketplace.

One important observation is that most of the sales at the bottom of the market are bank-owned. Why is that? Investors typically gobble up the lowest end of the market with all-cash offers because fixer-type properties at the lowest level will not qualify for conventional or government financing. This means first-time buyers utilizing conventional or FHA financing will usually need to look to a price level above the “all cash” market. In light of this segmentation, imagine scraping off the bottom layer of all-cash foreclosures. What would you find? You’d still see many REO properties, but you’d certainly see a good amount of Short Sales too. 

Overall, in my experience as a Sacramento-area real estate appraiser it seems the market price tier goes: 1) Arms-length sale; 2) REO; 3) Short Sale. This is common sense really, but it’s another thing to prove that by crunching numbers, making trend graphs, and observing data in the marketplace. But there are certainly cases and stories and sub-markets that might show a different order for whatever reason - especially depending on the supply of housing inventory and particulars of a given property. Interestingly enough, sometimes there is little to no difference between non-distressed sales and REO sales. For example, what does it do to pricing differences when 90% of all sales in a market are either bank-owned or short sales? In a case like this, since the market is clearly saturated with distressed sales, it’s probably a safe bet to assume foreclosure-pricing is indeed the market and will set the pace for what buyers expect to pay for properties (see a previous post on Patterson having 96.5% of all sales as distressed). In a case like this, there may be no verifiable difference between REO and non-distressed sales.

Let me know if you have questions or insight. Comments are welcome.

www.SacramentoAppraisalBlog.com Is there a price difference between REO properties, short sales, and arms-length transactions?

How is the Rancho Cordova real estate market doing compared to the rest of Sacramento county? What is the percentage of foreclosure sales (REO), short sales and total amount of distressed property sales (REO + Short Sales)? Let’s take a look below to glean some insight.  

The information above is based on all residential sales listed in Sacramento Metrolist over the past two years. Overall, the percentage of bank-owned sales dropped by 5% in both Rancho Cordova and Sacramento County, while at the same time the percentage of Short Sales rose by 7% in both Rancho Cordova and Sacramento County. Over the past two years Rancho Cordova had a 7% lower foreclosure rate than Sacramento County and a 2% higher percentage of short sales. 

Let me know if you have any questions  at ryan@lundquistcompany.com or 916-595-3735 and feel free to comment below.

www.SacramentoAppraisalBlog.com Foreclosure and Short Sales Figures in Rancho Cordova Compared to Sacramento County

We hear so many voices in today’s real estate market talk about the foreclosure rate decreasing in the Sacramento Region. Is that true? Are there less REO (bank-owned) sales today than there were two or three years ago? Let’s look at some hard numbers below for Sacramento County.

The information above is based on all residential sales listed in Sacramento Metrolist over the past two years. Overall, it’s true that there were less bank-owned sales in Sacramento County during the last 12 months in comparison to the year before that. The foreclosure rate decreased by 5% overall, but the interesting thing is that short sales increased by 7% during this same time period. What do you make of that? Have short sales simply replaced what would have been a similar rate of foreclosure for this year? As a home owner or real estate agent, have you found banks to be more receptive to working with you to do a short sale? Comments welcome.

www.SacramentoAppraisalBlog.com The Up and Down Dynamic of Foreclosures and Short Sales in Sacramento County

I am very pleased to announce that the final tally of donations for the Project 680 Shoe Drive is $3,601.51. This effort is something I fully support in my community, and I am very proud of the way things unfolded for the shoe drive. I have been posting about this from time to time, so you may have known that our goal was to raise $1,500 to purchase 100 pairs of new shoes for students in need within the FCUSD. Well, it looks like the community really bought into the vision and we ended up collecting far more. 

Together we can make a difference – even in this economy. Do you believe that? Thank you to local residents, businesses, churches and organizations that partnered together to put shoes on the feet of students in need. I stand in awe.

www.SacramentoAppraisalBlog.com Wonderful Results from the Project 680 Shoe Drive

What’s been happening in the Gold River real estate market over the past several years? Gold River is a census designated place located just east of Rancho Cordova, south of the American River, and north of Highway 50. This HOA community has 25 separate villages and a combination of detached and attached housing – all single family residential. Gold River has the lowest unemployment rate in Sacramento County right now at 2.1% as of September 2009, but that does not mean that home values have been unaffacted.

What do you notice about the graph above? It looks like the upper end of the market above $550,000 has pretty much disappeared during 2009. It’s also evident that in the midst of a downward trend over the past several years that there have been few sales under $300,000. What else do you see? If you are a local Realtor or home owner in Gold River, what insight do you have into your market, and why is Gold River desirable to buyers in the marketplace (as a real estate appraiser, I love to hear people respond to questions like this)?

Gold River Real Estate Market Data:

• 251 sales over the past 3 years
• 62 sales over the past 12 months
• 13 sales over the past 90 days
• 11% of all sales over the past 12 months were REO (bank-owned)
• 3% of all sales over the past 12 months were Short Sales
• 29 current active listings
• 13 current active short sale listings
• 6 current pendings

The lower Western portion of the Gold River area is comprised of a subdivision called “Gold River Station”. Since Gold River Station is not a part of the Gold River HOA, it was prudent to look at data separately from Gold River. Sometimes outsiders to the area get confused about Gold River Station and therefore lump it in with Gold River, but it’s not a part of the Gold River neighborhood.

It’s not hard to see that there is a big value difference between Gold River and Gold River Station. Whereas there are few sales under $300,000 in Gold River, it appears that most recent sales in Gold River Station sold under $300,000. What else do you notice when comparing the graphs?

Feel free to contact me at 916-595-3735 or ryan@lundquistcompany.com if you have any questions about the local real estate market or any appraisal needs.

www.SacramentoAppraisalBlog.com Gold River Market Trends: Past 3 Years of Sales