Neighborhood market trends & my wife’s 2nd book

We tend to get a different perspective of real estate when we look at market data in specific areas – as opposed to county or state-wide trends. Let’s glance at some local neighborhoods and property types to glean a bit of market insight.

Plastic-Polly-by-Jenny-LundquistFamily Announcement: Before diving deep into real estate though, I’d like to share some personal news. I am very proud to announce that my wife’s second book, Plastic Polly, hits the shelves tomorrow in book stores and online. She was published again by Simon & Schuster with her second middle-grade novel. Check out her website to learn more, or if you’re local I’d be honored if you would celebrate her book launch with us on this coming Saturday at Barnes & Noble in Citrus Heights from 1-3pm (click here for details).

Thanks for sharing the joy. Now on to some market trends:

All Midtown and Downtown Sales 900-1200 GLA - by Sacramento Appraisal Blog

Midtown Market: Here is a graph of all sales in Midtown/Downtown Sacramento with a living area between 900 to 1200 square feet. It’s amazing to see how the market has unfolded.

All duplex sales in Midtown and Downtown Sacramento

Downtown Duplexes: The duplex market in Midtown/Downtown has really followed the same trend as the single family market above. As you can see, property values showed an obvious decline from the peak, and have been stabilizing over the past couple of years (and flirting with an uptick lately).

All Duplex Sales in East Sacramento since 1998 - by Sacramento Appraisal Blog

East Sac Duplex Market: The same story can be told with duplexes in East Sacramento. There can be huge price differences between a standard ho-hum duplex and something really special (like the recent $900,000 sale that was an incredible two houses on one lot).

La Riviera Neighborhood Sacramento 2-story Sales - past 4 years - by Sacramento Appraisal Blog

Biggest House in the Neighborhood: When looking at all 2-story sales over the past four years in the La Riviera neighborhood of Sacramento, there are very few houses above 2000 square feet. In fact, the most common size for a 2-story unit is anywhere from 1600-1850 square feet. Here’s the thing. Since buyers tend to expect to find a 2-story house at about 1800 square feet, there tends to be a very small premium (sometimes none) for a house that is even larger in size by 400 square feet. This reminds us that price per square foot is not constant, but fluid. Know the expectations of the neighborhood and don’t build something too big that will suffer economic loss over time.

White Rock Neighborhood Sales in Rancho Cordova - by Sacramento Appraisal Blog

Post-Bubble Burst Bifurcation: A graph like this helps tell a compelling story in a neighborhood where 3 bed / 1 bath properties are most competitive to other 3/1 sales. The 3/1 sales are mostly all closer to 1000 square feet in the White Rock neighborhood of Rancho Cordova, and it’s pretty clear that most sales are under $150,000 besides one recent totally remodeled flipped property. Isn’t it interesting to see how tightly packed sales were before the “bubble” burst, yet now sales are spread apart further because of lower-end distressed sales (foreclosures and short sales) and higher-end flipped sales? This is a perfect example of bifurcation, which basically means the market is segmented into different price levels. The wild part is there are a couple flips listed around $160-170K right now. Is that reasonable or not? We’ll see. I talked with the agent of a recent sale that was one of the higher sales in the neighborhood. She said the buyer ended up offering $15,000 over list price to secure the contract. Ultimately the buyer thought the property was priced about $10,000 too low, but figured the added $5,000 would secure the deal (it worked). Is this now a good comp? Is this sale a good representation of the market?

McKeon Condo Subdivision in 95841 Zip Code - Sacramento Appraisal Blog

A Bell Curve & Condos: This graph is of a McKeon condo neighborhood in the 95841 zip code called Madison Villa Estates. It’s incredible to see the resemblance to a bell curve (or Christmas tree). The most recent highest sale in the subdivision over the past couple years is around $65,000 (renovated). There is currently a very average non-updated listing at $75,000. On one hand the market is appreciating, so we’d expect to see higher listings. Yet on the other hand, is this a reasonable price for the current neighborhood market? That’s the question appraisers are asking quite a bit. It’s important to weigh the reality of increasing values as well as the fact that some buyers are overpaying for properties.

Question: What are you seeing out there in the market right now? Any insight from the graphs or into the neighborhoods above? Feel free to share below.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

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