Posts from — January 2010

Has a low appraisal destroyed one of your deals this year? We’ve been hearing so much about how real estate appraisers are “killing escrows” ever since the Home Valuation Code of Conduct came into effect last year. I’ve read and listened to countless horror stories from brokers, real estate agents, loan officers, and publications.

I’m not saying there aren’t legitimate complaints to be had about HVCC or certain appraisals. I simply want to provide a helpful resource to maybe clear things up a bit about what type of value appraisers are looking for in the market. My hope is that this article (linked below) will shed light on the appraisal process and give insight into the appraiser’s mind. It’s a good thing when appraisers and local agents can understand each other’s roles and mutually benefit one another.

PDF file: “Closing the Gap Between Sales Price and Appraised Value”

This article was published with permission and comes from Patrick Egger, a Certified General appraiser in Nevada with 35 years of experience in valuation, consulting and real estate studies. Comments are welcome below.

While inspecting a property in Yuba City today, I found myself driving past Washington Square in Marysville where Highway 20 and 70 meet. I’ve appraised several houses in Yuba and Sutter County recently, but since I’ve not used this intersection for a while, I found myself wondering why enormous nets were blanketing these trees. Snapping a few shots was definitely fitting.

A friend on Twitter tipped me off that this area was scheduled for a construction project and the nets were an aim to curb nesting. An Appeal-Democrat article entitled “Tree Nets Spoiling Marysville” gives more detail.

What do you think of the nets? Comments are welcome below.

I have a “Photos from the Field” category on my site that usually includes pictures relating to real estate somehow, but today I want to shift gears and share something a bit more personal – not TMI, but something that really matters to me.

Project 680 is a grassroots community effort to find practical ways to support local homeless students within the Folsom Cordova Unified School District. We dub ourselves Project “680″ because in 2008 we found out there were ”680″ documented homeless students in the FCUSD. That was shocking and unacceptable, so we decided to do something about it. Since then many individuals, organizations, churches and businesses have come together to advocate for local kids.   

Today was a very exciting day because a friend and I were able to go to Sunrise Elementary School in the Anatolia area of Rancho Cordova to say thank you to some all-star students who gathered items for Project 680. Three kindergarten classes ended up collecting 154 pairs of gloves, 67 hats, and 11 scarves for local homeless students. Way to go kids!!! (and teachers) We are proud of you!!!  

This is such great news and I wanted to share it with you. It’s just too good on so many levels, don’t you think?

Please know though that I don’t mention this to brag or boast in any way. I’m not looking for public kudos either. I just think it’s so important to take a stand for struggling kids as well as find a vision in life that makes a real difference. I am so thankful to be actively learning to live out a vision with locals in Rancho Cordova and Folsom through Project 680. That’s easy to write about.

Join the Project 680 Facebook Page.

How many sales were there in Stockton over the past three years? The answer is 13,745, and I’ve graphed them below for your viewing pleasure. What stands out to you about the plotted green points? Do you notice any trends?

This graph takes a view of the entire city of Stockton and is based on information in MLS for all single family detached sales (green dots) under $1,000,000. It’s interesting to note a dramatic change in the market beginning in the latter part of 2007. There had previously been few properties sold under $100,000, but that certainly shifted, didn’t it? It looks like the upper end of the market began to get squeezed harder around that time too. If you remember, housing inventory levels in the market increased drastically in the latter part of 2007, so we saw a steep decline in property values because of the vast oversupply of houses for sale (and therefore more agrressive pricing to compete against each other for available buyers).  

City of Stockton Real Estate Market Data:

• 13,745 sales in Stockton over the past 36 months (SFR detached)
• 1,679 sales between 01/20/2007 – 01/19/2008
• 5,924 sales between 01/20/2008 - 01/19/2009
• 6,142 sales between 01/20/2009 – 01/19/2010
• 1,172 sales in the past 90 days
• 580 current actives
• 730 current active short sales
• 866 current pendings
• 75% of all sales over the past year were bank-owned
• 11.5% of all sales over the past year were short sales

Keep me posted if you have any questions about the data above. You are welcome to comment below as well as share insight about life or the real estate market in Stockton CA. If you do have a need for a narrowed property research, property tax appeal or a real estate appraisal in the Stockton area, please contact me at 916-595-3735 or ryan@lundquistcompany.com.

I was in Stockton earlier today on an appraisal inspection and the following image captured my attention.  What type of potential issues do you think could result from deferred maintenance like this? 

I’m wrapping up an appraisal in the city of Vacaville in Solano County. I wanted to share some trend graphs with you as well as give a little insight into what I do as a real estate appraiser to hone in on a final value opinion.

One of the first things I do to dissect market conditions is run a general search of all sales in the entire city or area where the subject property is located. In this case, I plotted sales in the city of Vacaville under $1,000,000. There were definitely sales above this level, but I took them out since the graph makes better sense without the upper-end of the market. Can you see a period of increase and then big decline? Do you notice too what’s happened to the upper level of the market? 

The next thing I do in the appraisal process is take a look at a more narrow geographic search. This ends up being whatever boundaries I determine for the subject neighborhood. In this case, the parameters were less than one square mile and consisted of homes of similar age and overall quality. Does this neighborhood graph seem to follow the trend pattern above from the city of Vacaville?

Thirdly, I look at all listings, contingents and pendings within the immediate neighborhood. Though these are not sales, they can be strong indicators of what is happening in the market or where it is heading. For example, it says something about the market if all listings and pendings are higher, the same or lower than the most recent sales in the neighborhood. Lately, the supply of listings has been lower, so many properties are moving quickly and its common to see multiple offers and contract prices higher than asking price due to increased competition.

Next I put a square footage parameter on sales in the defined neighborhood to see what similar-sized properties are doing (as opposed to looking at all sales in the neighborhood, which definitely includes non-similar properties). Granted, the spectrum for GLA below is quite wide, but in this case there were few sales within the neighborhood even in this parameter, so it was important to widen the bracket a bit to get a better glimpse of the market. As you can see from this graph when compared to the one directly above, houses with a larger size tend to sell toward the middle to upper end of the neighborhood market. After doing these initial steps, it starts to become a bit clearer what sort of value range the subject might fit in.

The steps above are only a few initial steps in the appraisal process to help build a general framework for viewing the local market. I could honestly go on and on because there are so many factors to consider when appraising a house, and many conversations to have with local agents also.

Let me know if you have any questions about the valuation process or a need for any specific research or appraisal services. I serve multiple counties in the Greater Sacramento Region and I can be reached at  ryan@LundquistCompany.com or 916-595-3735.

The real estate market has been hot lately for investors since prices and inventory have both come down so far. I get hits everyday on my website and blog from keywords and phrases such as “duplex bank-owned properties in Sacramento”, or “residential-income units”, or “quadruplex for sale Sacramento”. People are looking to buy and the competition has been fierce lately, hasn’t it?

I figured it might be helpful to provide a list of all duplex and fourplex units for sale in Sacramento County (under $200,000). This information is based on Sacramento Area MLS. Click on the following links to open a PDF file.

Duplexes in Sacramento County under $200K as of 01-15-2010 (pdf)
4-Plexes in Sacramento County under $200K as of 01-15-2010 (pdf)

If you have any questions about the 2-4 residential-income market in the Sacramento area, let me know. I’m familiar with the local market and I do a good amount of work for a handful of local and Bay Area investors. Also, if you see a property in the files above, and you need the Listing Agent’s phone number or other information, I’d be happy to get that to you. Give me a call at 916-595-3735 or email me at ryan@lundquistcompany.com.

I’ve asked a few local business owner friends to read through a book called Trust Agents starting next month. So far our book readers consist of several real estate appraisers, a photographer, editor of a local online publication, real estate agent and hopefully a broker. I should mention we do have an appraiser from Georgia too who will be reading along with us (he just won’t be at the meetings in CA).

This is a low-key gathering and not a networking meeting. Like I told everyone, this is an informal get-together and a social opportunity to grow in business with other locals. The goal is to openly ponder this highly recommended book and think out loud together about the content. It should be fun, and I have a feeling we’ll learn a lot and sharpen each other’s business skills too. 

If this group goes well, maybe I’ll put together a couple more since I’ve been meaning to read Crush It and The 4-Hour Workweek. Do you have any books to suggest? Has there been a particular author who has formed your thinking for business or life? Also, if you’ve read Trust Agents, what did you think?

I put together an audio clip to help home owners sift through why a real estate appraisal is needed during bankruptcy, a few things the appraiser should know, and how much appraisals typically cost (two different price levels). Please click the play button below to listen. If you subscribe by RSS or email, you may need to click on the post title to hear the message online.

I work with both home owners and attorneys in ten counties throughout the Greater Sacramento Region, and I am available to help answer any questions or talk with you about your situation. Feel free to give me a call at 916-595-3735 or email ryan@lundquistcompany.com

Comments in MLS can be entertaining and also telling of interesting property characteristics. Here are some gems I’ve stumbled upon recently during research that raised my eyebrows in curiosity or made me smile.

Placer County: Water for 1/2 the Year
No well for this property. Currently using irrigation water. Water available only 6 months of year. Must use bottled drinking water.

Auburn House: Where is it?
Somewhere in the junk cars and piles of metal, there is a 1 or 2 bedroom house on a flat 3/4 acre.

Yuba City Superhero Reference
Holy Clutter Batman! This short sale has amazing potential.

Yuba City Fixer: Dog Description
Hi, this is Rosie, Mama Duke’s canine assistant. I hate to say this, but this home isn’t even fit for a dog! But look past the weeds and junk and imagine this home all repaired. I could sun myself on the deck in the huge backyard in summer and lay by the fireplace in winter. Do some fixin’ and have a nice home again. Ahemm, however, in it’s as-is condition, it’s no doggone good! Enter with care and watch your step. By the way, I didn’t create the smell!

Modesto Kitchen
Fixer upper/Handyman special…Entire kitchen missing (I’ve lost count of how many times I’ve seen this in today’s market)

Thank you Realtors and agents for a bit of humor at times, but most of all thank you for being available to talk with real estate appraisers. We rely upon your insight into the local market as well as in-depth information on properties we appraise and consider for comps. It really makes a difference when you take a few minutes to thoughtfully respond to appraiser questions.

By the way, if you are still wondering if appraisers can speak with Realtors and agents due to HVCC, please read: Can Realtors Still Talk to Appraisers After May 2009? and Talking to Appraisers in an HVCC World: Tips for Real Estate Agents

I was excited for Winter’s edition of Working RE magazine to arrive in the mail today. Bill Cobb, an appraiser in Baton Rouge, wrote an article entitled “Using Blogs to Grow Your Business”. The two-page article is very informative for appraisers and inspectors, and I was honored to be included as an example in the story. I included the original content below for reference. Follow Working RE on Twitter at @workingremag and view the full article HERE.

Becoming a Trust Agent

Another appraiser experiencing success with WordPress is Ryan Lundquist in Sacramento, California (Lundquist Appraisal Blog and Twitter @SacAppraiser). Ryan has come a long way in a short period of time generating 8,391 visitors [actually 16,196] in 2009 based on his “hit counter”. His is a testimony to how easy WordPress is to use. Ryan has incorporated both local photos and short videos to make his posts very interesting. The philosophy that Ryan and I share is that our sites are where locals find out what’s really taking place in their uncertain housing market. Where else are locals going to get trustworthy news about their housing market? This is an appraiser’s opportunity to shine and become a “trust agent” within their local community. Has this effort paid off for Ryan? Yes, in the form of multiple tax appeal appraisal assignments (non-HVCC compliant appraising).

As always, thank you for following the Sacramento Appraisal Blog. Welcome also to any readers of Working RE magazine. If interested, you can subscribe to posts by RSS, follow on Facebook, or get articles delivered to you by email.

I thought it would be interesting to plot sales in the city of Benicia over the past five years to get a panoramic view of the ups and downs of the market. What do you see? I think the trend somewhat follows the pattern of a rainbow.  

The graph is based on single family detached sales recorded in BAREIS (under 1.6 million dollars). There was only one sale above this level around 2.5 million, so it was most relevant to push that lone ranger to the side.