Random Stuff

Crazy contracts & condos are less popular

September 22, 2020 By Ryan Lundquist 17 Comments

I have two things on my mind today. Let’s talk about condos and then some of the crazy contracts we’re seeing happen right now. Then I have lots of visuals for those who are interested.

CONDOS ARE NOT ALL THE RAGE:

It looks like condos aren’t so popular these days. During the pandemic buyers have been saying no thanks and instead focusing on homes with more space. No matter how you look at it there are fewer condo sales happening, and that’s telling. If you’re not local, what’s happening in your area?

MARKET NOT COLD: One thing I want to clarify is just because condos haven’t been as popular doesn’t mean the condo market is dull or cold. Inventory is still sparse among condos, so don’t expect to get the deal of a century. In fact, there is not an oversupply of listings among condos at this time. Inventory is really tight.

CRAZY CONTRACTS:

It’s common these days to see the appraisal contingency removed and many buyers are even offering to pay above the appraised value (if it comes in lower than the contract price). Anyway, I’ve been getting lots of questions about this, so here are some thoughts:

1) Value is not found in the contract: The reality is value is found in the comps – not the contract. Technically the terms in the contract shouldn’t matter because the only thing that counts is comparable data. Of course I realize some appraisers are swayed by the contract, and that’s unfortunate. Ultimately if you find yourself worried about the terms, I’d recommend focusing instead on communicating well with the appraiser because the comps are the bigger factor.

2) Offering above the appraisal: When I see a contract that states the buyer will pay above the appraised value by a certain amount if the appraisal comes in lower, the practical part of me wonders if the buyer actually thinks it’s not worth what was offered. But since my job is to be objective, my curiosity about the buyer doesn’t mean anything for the appraisal. The bottom line is I cannot let that influence my perception of market value. Besides, offering to pay more might not be about the buyer’s perception of value at all. Instead it could be a strategy to get an offer accepted. And most of all, the comps are what matters – not what an individual buyer thinks about value.

3) Hiding information: I was asked recently if it would be OK to only give the appraiser the purchase contract without an addendum that had further terms. Look, I’m not a lawyer or broker, but from my perspective I’d ask that you please give the appraiser the entire contract instead of holding something back for whatever reason. In my mind when this happens it seems like the goal is to try to influence the outcome of the appraisal, and that doesn’t smell right. Let’s keep it transparent.

Anyway, this is a loaded topic. Lots of emotions. What are your thoughts? Any stories to share? Please do so in the comments.

MARKET UPDATE VIDEO: Here’s my latest market update where I unpack glowing rebound stats. Watch below (or here).

WAY TOO MANY VISUALS:

Here are some new visuals. You are welcome to use these in newsletters and social media with proper attribution. Scroll quickly or digest slowly.

I hope that was interesting or helpful. Thanks for being here.

Questions: What are you seeing with condos right now? What’s happening with contracts too? Anything you’d like to see change?

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My health went crazy & so did the market

September 2, 2020 By Ryan Lundquist 43 Comments

Long time no blog. I don’t know if you noticed, but I haven’t been around these past two months. Today I want to talk about why, say thank you, and then share some cool visuals I’ve been making these past couple weeks.

What happened: In late June I began to have an ulcerative colitis flare and it got really bad to the point I had to be hospitalized for six nights. Fourteen years ago I was diagnosed with UC and this is frankly the worst it’s ever been. Thankfully my flare is subsiding and I’ve since been slowly regaining energy.

I’m blown away at your support: This has been a difficult season for my family. It’s hard to not feel well and it was scary being in the hospital. But in the midst of this it’s been incredible having an army of support rise up. The cards, flowers, meals, text messages, advice, gifts in the mail, DoorDash, emails, prayers… It all meant so much.

An army of support: While I was in the hospital a GoFundMe was started by my friends Erin Stumpf and Joe Lynch. I’m honestly a guy who hates accepting help. I would never in a million years have asked for something like this because I always want to be the giver. So it was humbling to see my face online and to have my colon become internet famous (haha). I received a text message basically saying, “We’re going to do this and your peeps are going to take care of you.” And that’s what happened. Everyone, I cannot put into words how grateful I am for you carrying my family during this time. As the hospital bills start rolling in and I haven’t had income for over two months, your generosity has been a tremendous blessing. It’s frankly taken off some pressure and given me space to adequately heal. I still have lots of individual thank yous to say and I will get to those over time, so please be patient. But for now I want to publicly thank everyone for your support. I have no words to express how deeply grateful I am.

NOT ASKING FOR MONEY: I wanted to clarify that I am NOT asking for anything. I did not link to the GoFundMe on purpose. We have received plenty and I think we are good in terms of finances.

I’ll be back: I was hoping to be back to work the day after Labor Day, but these past couple of days I’ve been exhausted, so we’ll see. In the meantime I’m posting some visuals on Facebook, Twitter, and LinkedIn.

Okay, enough about me and my colon….

THE MARKET WENT CRAZY

While I was gone the market went absolutely nuts. In short, competition has been fierce and we’ve begun to see one of the most competitive markets we’ve had.

WAY TOO MANY VISUALS FOR YOU:

Multiple offers: They were up 25% this August compared to last year at the same time. As you can see, the percentage of multiple offers is at its highest point in recent years too since the metric began to be included in MLS. We started to see the market soften during the beginning of the pandemic, but then it sped up to create a V shape as mortgage rates went down.

Here is a new visual. What do you think?

Price reductions: This is another brand new visual. About 9% of the market had a price reduction last week. This isn’t much, but it reminds us the price has to be right – even in the midst of such low inventory.

Sales volume: We’ve seen a recovery in volume lately after a slump during the beginning of the pandemic. Usually volume tops out around July or August each year too and it looks like that may be starting to happen. This topping is normal for the season and we’ll know more in the next few weeks how the market is moving. Stay tuned.

Prices: Prices have been ticking up and preliminary stats for August so far show another increase from July. For a while the market was subdued and we were seeing year over year growth anywhere from 2-4%, but it’s been more like 8% and higher lately from last year.

Listings: It’s as if listings have been cut in half from last year. When I pulled stats at the beginning of September last year there were over 4,700 listings on the market in the region, but yesterday there were just over 2,200. Isn’t that crazy?

Six years of listings: Here’s another way to look at the number of listings. These are listings from 2015 through 2020 pulled on the first day of September each respective year.

Inventory doing the limbo: Inventory has been shrinking as I mentioned above. Here is a look at a few local counties.

Distressed sales have bottomed out: We are not seeing more distressed sales hit the market. There is talk about a new wave of foreclosures coming, but if that ends up happening it would take a while before anything actually shows up on MLS. Moreover, many owners are in distressed situations, but they are sitting on equity and could sell instead of give the house back to the bank. Let’s keep watching.

Unemployment: Let’s keep watching the job market and economy.

Other visuals: I have lots of other graphs. Check out my social media in coming days and weeks. I am posting daily stuff. I may or may not put up a weekly blog for now, but I probably will since I have so much to share.

Thanks for being here.

Questions: What are you seeing out there in the market right now? I’d love to hear your take.

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What words are used to sell homes?

May 20, 2020 By Ryan Lundquist 21 Comments

What words are used to sell homes? Let’s get lighthearted because it’s been intense lately with the pandemic. I thought it would be fun and fascinating to see how many times certain words were used in real estate listings.

Realtors do a great job selling and here are words used in public property descriptions in MLS listings in the Sacramento region. There were 33,884 sales since last year. Some of this is just for fun.

How often were the following words used in home sales?

I hope you enjoyed and even laughed a little.

RESOURCES:

New market video: Here’s my weekly video. I talk through two markets. The future and the present. I also have a woodworking sign giveaway in the video. Check it out below (or here).

Millennial Millionaire Podcast: I was on this podcast recently and the episode is called “Teacher turned appraiser by accident.” Yes, I used to teach Middle School if you didn’t know. This was recorded about two months ago.

I hope this was interesting or helpful. Thanks for being here.

Questions: What stands out to you most about the words above?

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The Golden State Killer’s house, selling lower, & price changes

December 17, 2019 By Ryan Lundquist 22 Comments

I have three things on my mind today. Let’s look at the accused Golden State Killer’s house, a new visual I’m testing out, and some fresh stats.

Huge thanks: First off, thank you for reading my blog this year. This will be my last post of 2019, so I wanted to say I’m truly honored to have you here and I hope you’ll continue to journey with me into the new year. As always, I’m open to your ideas too, so hit me up if you have topics in mind.

GOLDEN STATE KILLER: There’s no holiday cheer with this topic, but we’ve been wondering what would happen if the accused Golden State Killer’s house came to the market. Well, now we know. Sort of. This property sold as a private sale to an FHA buyer a few weeks ago. The SacBee did a piece on it here.

What do you notice about the final price?

Unfortunately the home wasn’t sold on MLS, so we don’t really know the details of how the price was established, but it clearly sold at the lower end of the market. Was the low price due to stigma? Could it be due to condition or lack of upgrades? Or maybe it was the owner selling at a discount? We may never know the details, but it’s interesting nonetheless to see.

House History: It’s sobering to think Joseph James DeAngelo, the accused killer (aka East Area Rapist), was pursuing the “American dream” of home ownership while destroying people’s lives. Here’s a history of the house:

1980: Bought the house for $77,000
1993: Refinance
2003: Refinance
2012: Refinance
2019: Private transfer to family member
2019: Private sale for $320,000

SELLING LOWER (NEW GRAPH): I’m testing out a new graph and I wanted to see what you think. Here’s a look at Roseville and East Sacramento. Would you like to see other neighborhoods? The goal is to see how close a property sells to the original list price vs how long it’s on the market. Thanks Braden Gustafson, MAI for the graph inspiration on Twitter.

The takeaway? The longer a property sits on the market, the further it sells from its list price. I know this is what we’d expect to see, but it’s still cool to visualize. By the way, I used the original list price instead of the most recent list price because it’s a more complete picture of the market.

PRICE CHANGE IN NEIGHBORHOODS: Last week I pulled some stats to prepare for an interview with Channel 10 about price dynamics in Oak Park. So I crunched numbers in about a dozen neighborhoods to help get a wide view of both higher and lower-priced areas.

The Sacramento Bee actually did a piece on my stats too.

I looked at both the dollar change and percentage change on purpose as this helps give a well-rounded view of the market. I also looked at huge chunks of data too as this compared almost an entire year in 2012 vs the same time in 2019. The problem with neighborhood data is if we look at one month only, the numbers can end up being all over the place.

NOTE: If you want this data in a PDF, just send me an email.

Again, thank you for being here. From my family to yours, Merry Christmas and Happy Holidays. In coming weeks I hope you get a little time off to connect and reflect. Blessings to you.

Questions: Would you feel comfortable buying this house? Would you expect a discount? Any thoughts on the new graphs or price stats? Anything to add?

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