Welcome to Day 2 of “Condo Week” on the Sacramento Appraisal Blog. Let’s take a look at a panoramic view of the condominium market in the City of Sacramento. Here is a graph of all sales over the past 36 months.
Two things stand out from the graph to me. 1) The condo market is segmented into different markets. There is a very clear upper end of the market and an obvious lower end; 2) Property values have decreased over the past several years.
Here is a graph of all current condo listings in the City of Sacramento. It’s amazing to see so many condos priced well under $100,000. The lowest sale last year was $13,000 and 32% of all condo sales were under $50K and 34% of all sales were between $50-100K. This means 2/3 of all condo sales in Sacramento sold under $100,000 over the past year.
With such low prices there are big opportunities for buyers these days. But not everything is as smooth as possible when purchasing a condo, as shown below by Sacramento real estate broker Gena Riede of Sacramento Real Estate Voice:
I have long worked with parents who purchase condos for their Sac State students, and lately I too have found prices at an all time low with condos. But, the biggest issue lies in getting loans for these condos. Many of them have more than allowable amount of owner–occupied vs investment as well as not being on the approved lender list. More importantly, due to the amazingly low cost to purchase a condo, few if any lenders or credit unions will even loan money on such low amounts. This leads to more investors buying unless the buyer can pay cash. In my travels showing these Sacramento condos I have found many in disrepair and yet the HOA dues are in the $200/mo. With so many condo owners not paying their payments and losing their condos to the bank, many of the HOA’s are suffering with lack of funds for maintenance as well as their reserve accounts. This is where being cognizant of the maintenance or lack thereof of the complex is critical in making an informed decision as to purchasing or moving on to find a better maintained complex being key to your decision making. Certainly, parents of future Sac State students will find buying a condo is a much better financial decision than paying dorm fees, especially with these current real estate condo prices! On a good note, if a condo home buyer has cash there are some heck-a-deals out there to be had.
What are you favorite condominium complexes in the Sacramento area? If you had to purchase a unit today, where would you buy?