Category — Market Trends

Do you know someone looking for a job or maybe a person who has had a huge change in income over the past few years? Chances are you do, especially if you live in the Sacramento Region. The economy has been limping along in Sacramento and this graph (resembling a wave) gives some insight into part of the struggle – unemployment. It’s incredible to see the exponential increase in unemployment rates over the past five years.

How does the graph below strike you?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Do you remember when the duplex market was sizzling in 2004 and 2005? Properties were selling for $400,000 – $500,000 like it was nothing. Take 7996 Marsala Court in Citrus Heights, for example. I came across this sale recently during comp research for a duplex I appraised. In 2004 this property sold for $460,000, and then in 2005 it sold for $513,500. After going through foreclosure in 2010, it sold on the open market for $221,000 in May 2011. The price difference is down over 50% from the peak, which is a very common scenario in the Sacramento area. Take a look at all duplex sales in Sacramento County on the graph below.

There is a very wide range of sales depending on the location of the duplex and of course potential for rental income. Sales in the upper tier tend to be units in Land Park, Midtown and East Sacramento, whereas duplexes around $50,000 tend to be located in North Sacramento and other portions near South Sacramento. What do you notice from the graph above? Any insight?

Sacramento Real Estate Investment Specialist Joel Wright unpacks the market:

In the last 3 ½ months of 2008 80% of properties sold were foreclosures.  During the most recent 3 months in 2011 foreclosures only represent 36% of the sales. Also short sales are happening now representing 24% of sales, which they were not 3 years ago when they only represented 8% of sales. This is a distinct shift in the market. Another distinct shift is that the average price has dropped 17.5% during that time from $186,500 to $153,500.  So while the graph shows the majority of sales occurring under 200k, the ones selling recently in 2011 are almost 20% cheaper. 

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Here are all sales in the Curtis Park neighborhood of Sacramento over the past several years. It looks like prices over the past months have been more or less sandwiched between $450,000 near the top and $175,000 near the bottom – without considering the outliers of course. There have still been higher sales recently, which is normal, but there are definitely less overall transactions above $500,000 compared to 2008-2009. Curtis Park is actually home to the very unique “Dragon House” I mentioned a few weeks back, and I’ll be there twice this week for an inspection this afternoon and a barter situation worked out with a friend to help him put together a tax appeal. What do you see?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Have you been seeing more new construction in Sacramento lately? I’ve come across new projects in Arden-Arcade, Elk Grove, Anatolia, Pocket/Greenhaven, Kavala Ranch and Sacramento on Bradshaw Road among others. There has been an uptick in building permits over the past quarter, but there is still historically a lower number of permits in 2011 compared to the past two years. What stands out to you below? Do you think permits in 2011 will end up similar to 2010 levels?

Below is a graph to show the greater context of permit history in Sacramento County since 1994. As you can see, the level of permits over these past few years is a drop in the bucket compared to the last 15 years. Permits figures cannot get too much lower than they have been lately, right? What do you see?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Don’t just tell me, show me. In all my tax appeals and appraisals, I like to visually display what is happening in the market. It helps get a point across and sometimes shows a certain trend too. In the case below, a home owner in the Hillcrest neighborhood in Folsom contacted me about disputing his property taxes. As you can see, the Sacramento County Assessor’s Office had his property assessed around $940,000. When looking at the graph though, does something seem suspect? Being that there were zero sales above $900,000 over the past 2+ years in the entire City of Folsom, there are some red flags. Granted, there could definitely be a reason why a property is valued as a “lone ranger” (especially in Hillcrest), but in this case after my valuation was complete, true value was $140,000 less than assessed value (that’s about $1,750 in property taxes).

What do you think of the graph? What trends have you seen in Folsom lately?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Sometimes when thinking of property value in the Sacramento area, I think of the “steep grade” signs on the side of the road. Most trend graphs for the market over the past several years end up looking something like these signs.

I just finished up an appraisal in the Capital Village neighborhood of Rancho Cordova, and I wanted to give a glimpse of recent sales and listings in the neighborhood and larger market area. There is a pretty clear downturn, which is difficult to swallow for home owners, but prospective buyers have a sweet taste. The graph below includes all property types in Capital Village (fusion, bungalows, reflections, cottages).

What about current listings in Capital Village? Here they are per Sacramento MLS.

It’s very common for a neighborhood to see trends that are similar to the overall city or region, but it’s not always the case. Sometimes a neighborhood can stand out for whatever reason and escape some of the turmoil from the surrounding market. Though in this case, it’s clear that property values in the 95670 zip code have seen a decline over the past several years.

I know, I’ve shared some bad news today about the real estate market. I’m sorry. But stats are stats and my property has not escaped similar stats either (oh, the pain). The one redemptive feature of a downturn in property value is a savings on property taxes. Additionally, a decline in value does not mean the neighborhood is any less unique. Check out a tour I gave of Capital Village in 2009 (It’s discouraging to see so much more gray hair from two years ago).

What stands out to you about the graphs? How might information like this be useful? If you live in Capital Village, what do you love about the community?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Looking to buy under $50,000? Let’s take a look at all sales in Sacramento County over the past 36 months under $50,000 (SFR only – not condos). There were 1615 sales under $50,000 during the past three years. As you can see below, there were more sales under $50,000 during the first year on the graph (55% from 2008-2009). That’s a good sign for the real estate market, right? There have been very few sales under $20,000 over the past couple years, which is also good. Most sales at that level are severe fixers, fire-burned or they are priced low to offset the out-of-pocket code enforcement costs that investors have to pay (like this house).

What’s for sale these days under $50,000? There are over 180 properties listed below $50,000. 105 of them are already either pending or “contingent” in status, which means a contract is already in place. The lower end of the market is very competitive, so if you are looking to buy up properties at this level, you need to have cash, be quick, work with the right agent and have connections (or all of the above). If you need suggestions for a good agent, contact me.

By the way, the lowest-priced active listing at $18,000 is located on 24th Avenue in the 95820 zip code (the lowest pending is at $16,100). This is a fire-burned property and it’s bound to be snatched up quickly. I wouldn’t be surprised if there were already multiple offers since it’s been on the market for 4 days now.

If you’re local, what are you seeing happen in the market under $50,000? How hard is it to get into contract? What gems would you like to find in this price range?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

When prices increase, what happens to the rate of foreclosure (REOs)? Let’s take a look at price range segments under $500,000 in Sacramento County to see what we might discover. What stands out to you from the chart below? Generally speaking, the higher the sales price, the lower the percentage of foreclosure. There seems to be greater success with short sales at higher prices too, though the stats look pretty decent above $100,000. Does it shock you to see 83% of all sales under $100,000 as either bank-owned or short sales? Lastly, the total percentage of distressed properties consistently declines as price increases. What does that tell us?

Let’s look at all counties in MLS also to see if we might see a similar trend. It’s always nice to compare one set of data with a larger set as a safeguard. Counties in Sacramento MLS consist of Sacramento, Placer, Yolo, El Dorado, San Joaquin, Stainslaus and portions of Merced, Yuba/Sutter and a few other places.

What stands out to you? If you are a real estate agent, what are you seeing out there in the market? I’d love to hear your thoughts. Feel free to comment below.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

I have a guest post up today entitled “Is unemployment tied to Sacramento real estate” on Sacramento Real Estate Voice. Thank you Gena Riede for inviting me to post. Go check it out and give it some love. The post really focuses on sales and unemployment rates over the past few years in the Sacramento area and takes a specific look at Folsom, Galt, Rancho Cordova & North Highlands. Here is an example graph from the post. It’s amazing to me to see figures like this.

Visit my guest post HERE. Thanks so much.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

There have been quite a few “pot houses” discovered in the Sacramento area over the past few years, especially in the City of Elk Grove. Most of these residential “farms” have been found in newer subdivision built during the past ten years in houses that are typically 2500-4000 square feet. Let’s take a look at one recent pot house sale from February 2011 to see how the neighborhood market reacted to this sale.

The sale circled in red on the graph signifies a recent pot house sale in a particular neighborhood in Elk Grove near W Stockton Blvd and Sheldon Road. This house as pictured to the right is just about 2,500 square feet and sold well below the range of other sales, which is obvious when viewing a bracket of properties between 2000-3000 square feet. As you can see, only one other house in this neighborhood sold below $200,000 over the past few years (an aggressively priced short sale in 2009). In this case similar competitive sales around February were selling between $220,000-$230,000 easily. Of course these “comps” did not have major electrical damage, moisture damage, holes in the sheetrock, potential structural issues and all the other factors associated with a “growing facility.”

Tips for Finding Pot House Comps: Usually pot houses can be found in MLS by searching for phrases like “marijuana”, ”pot house”, “pot farm”, ”agricultural income production” and “growing facility” (kidding on the “income production” – just seeing if you’re really reading). It’s always helpful to ask trusted real estate agents what they know too since sometimes sales are hard to find since listings can say things like ”call agent for history of house”. Lastly, search online for terms like “pot houses in Elk Grove” to see what you can find. For example, this News 10 article lists six pot houses that were raided. If these houses have since sold on the open market, they have potential to help us measure the impact that indoor marijuana cultivation might have on local real estate.

Would you buy a former pot house? If you are an agent, have you sold one? How have you seen pot houses impact the ethos of a neighborhood or real estate values? Share your story below.

I’ve written previously about “Streng” homes in the Sacramento area. If you don’t know what a Streng is, in short it’s a mid-century modern (MCM) home built by the Streng Brothers and designed by Carter Sparks. Strengs are distinct because they have a modern architectural feel to them. Some Streng characteristics include a flat or low-pitched roof, high windows, skylights, plain colors, terrariums and overall a minimalist vibe. Strengs were influenced by Bay Area builder Joe Eichler.

Strengs are often found sprinkled throughout communities in Sacramento, and sometimes we’ll see an entire street of Strengs. This is not the case though with River City Commons because this community is comprised of nine streets of Streng homes. River City Commons is a PUD subdivision in southern Natomas (near Truxel & W El Camino) and was built between 1978-1981 and consists of 196 units (single family detached and halfplex). There is a minimal HOA fee, a fenced park, tennis courts and two pools. It’s also worth mentioning the community has a rule to limit rentals to 25% or less.

Here are some photos of Streng homes in River City Commons:

As shown below, there really haven’t been too many sales in River City Commons over the past few years. It’s easy to see that prices have come down from the boom years though, right?

Here are some links in case you’re interested in Streng properties. If you have other link suggestions, do let me know.

River City Commons Neighborhood Website
River City Commons Original Architecture (pdf)
Eichler Network
Floor Plans for Streng Homes
Modern Valley Blog
Sacramento Mid-Century Modern Tour
Streng Brothers Homes

Questions: What do you think of Streng homes? If you live in River City Commons, I’d like to hear your thoughts on the neighborhood. What do you like best? Why did you move there?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

Talking about lawns and blight in the same breath seems overblown in some senses. But unkempt front yards are actually a very big deal because people will judge a community based on what it looks like. Is this a place where residents invest in their neighborhood or have they stopped believing in the future of their community?

I’m not talking about the one house on the block that is usually mowed, but has struggled over the past few months because the owner has been sick. This is more of a deep-seated issue where overgrown lawns have become a part of the normative and acceptable lifestyle in a neighborhood. On one hand it is only grass we’re talking about, but it’s really a sign of subdivision decay that can spread like a virus and encourage other forms of blight to take root also. A lawn may be a small thing, but if you begin to add up other examples of blight on top of unkempt lawns, it takes a huge toll on the ethos of a community and it definitely decreases property value.

Dealing with the “small things” like mowing the lawn is a perfect example of how “The Broken Windows Theory” works in a neighborhood. See the video below.

The notion of being a contributor to the health of a community is seldom on the radar in today’s society. We like to think we can simply exist on parcel islands in our subdivisions and believe what we do (or don’t do) carries little consequence for others. The truth is when residents begin to build high fences, stop mowing lawns and esseentially check out of the community, it makes an impact on everyone else. Our neighborhoods will thrive only when we begin to act on the belief that each household has a role to play for the sake of the entire community. 

Questions: How have you seen a lack of lawn-mowing impact a community? What is the starting point for reversing the trend in a neighborhood where lawns are perpetually unkempt? How do you think new subdivisions should deal with unekmpt lawns due to unmanaged vacant foreclosures?

This is post #3 in “Blight Week” on the Sacramento Appraisal Blog

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.