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.

Here’s a good question to ask. If a short sale was not a short sale, would it sell for more? The answer is very often “yes” and that leads us to a better picture of what market value is. The truth is that properties are frequently marketed as short sales and end up generating little interest before resulting in foreclosure. But then after these same houses end up as bank-owned they generate very quick offers at or above the original short sale listing price. Of course part of this could be banks not cooperating with the short sale process and buyers tiring of waiting for months for the deal to close, but it’s hard to ignore that short sales often (not always) sell at lower levels.   

Case-in-point: I appraised a house recently in the City of Galt where competitive properties in the neighborhood showed a distinct difference between short sales and everything else. Comparable non-distressed properties were selling around $105,000-$115,000, REOs were selling mostly between $85,000-$100,000 and short sales were selling closer to $85,000-$90,000 near the bottom of the competitive range. It’s certainly true that condition and quality of updates played a role in the price differences, but it’s not an accident either that short sales were consistently finding their place near the bottom of the market.

Why is this important to understand?

1. Appraisers:  From the appraisal standpoint, if short sale comps are used in an appraisal report (without an adjustment upward), then the value in the report may be lower than what it should be. The value could really be a “quick sale” value rather than “market value”. That’s not good on many levels. Please understand though that short sales do not always sell less than fair market value, so an adjustment upward is not always warranted in an appraisal. It all depends on what is happening in the market.
2. Investors:  I just spoke with a Sacramento investor yesterday who has been growing frustrated to see some of his properties compared to bottom-of-the-market short sales by appraisers. This investor found me online and he called me to see if I had any advice on how to deal with his situation. That’ll be a different blog post, but I did give him some tips, a few which I mention below.  
3. Real Estate Agents:  I recommend real estate agents (and investors) provide a detailed list of all updates to appraisers (with costs if possible). Send this via email or provide in person to the appraiser. You can also discuss any relevant marketing information (ie.. “There were 4 full-price offers in 3 days and I am still getting calls and back-up offers”). Lastly, feel free to share market research and properties that helped you establish your listing price. Don’t tell the appraiser which comps to use and how to do his job, but rather share data that helped you establish your price so the appraiser might understand your point of view. You are allowed to talk with appraisers about property specifics and the real estate market, but don’t coerce and pressure for a certain value.
4. Sellers:  Know your market if you are selling. You will have to compete with distressed properties around you, which can impact your price, but that doesn’t necessarily mean you have to price your property the same as neighborhood short sales and REOs. A trusted real estate agent or pre-listing appraisal should be able to give you guidance to understand the market. Misunderstanding what the market is doing can cost you dearly.

What do you think? Agree? Disagree? Any stories to share?  

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.

Why does the water get left on at foreclosed properties?

A) Disappointed owners wanting to stick it to the lender.
B) Squatters leaving their mark.
C) Vandals having “fun”.
D) Youth who don’t realize the costs and responsibilities of the adult world.
E) An accident.

It’s too bad things like this happen because if there is significant damage, the property will likely sell for less, and thereby hurt the value of other properties nearby. Foreclosure is such a difficult reality for so many in our local market. In no way am I trying to minimize the real pain that families go through when they have to let go of their property. I think by now we all personally know quite a few people who have been through the foreclosure process. I’m only thinking philosophically about why things like this happen. What does water being left on tell us about human behavior? What’s the psychology behind water faucets being left on?

UPDATE: Since sharing this post on my Facebook page this morning, two REO agents mentioned that winterizing has been the primary cause of running faucets. Interesting.

As you can see, when looking at all sales from 2006, property values have clearly declined over time. There is a very obvious downtrend, wouldn’t you say? Additionally, there is a wide value spectrum too, which represents a big difference in neighborhoods like White Rock, Lincoln Village, Walnutwood, La Loma, Stone Creek, Sunriver, and Anatolia.

Let’s take a closer look at the 95670 zip code in Rancho Cordova(not Gold River – that’s a different market). Sometimes sales in Gold River and Rancho Cordova are grouped together on graphs because they have the same zip code, but that’s not proper in my opinion. Regarding the 95742 zip code, we can take a look at data in a future post if you’d like (just let me know). Overall it looks like there has been a decline in sales prices over the past year, though not as steep of a decline as in previous years. The trend toward more stability is similar to Citrus Heights.

Now let’s put an age parameter on the data to see if there is any difference between properties built before and after 1990. As you can see when comparing the graph above with the one below, newer areas in the 95670 represent the highest sales in the zip code (this would be basically be the Stone Creek area and Capital Village).

Here is a spectrum of price per square foot for all sales in Rancho Cordova (95670) over the past year. Remember though, don’t just take your square footage and multiply it by the average price per square foot. That’s not always the best idea to determine the value of your house. See my previous post entitled “Is price per square foot an accurate way to measure the value of a house?”

Specific Rancho Cordova Real Estate Market Data (95670 zip code):

• 165 sales over the past 90 days.
• 89 current active listings
• 55 current active short sale listings
• 42 current short sale contingent listings (this means an offer has been submitted already)
• 39% of all sales over the past year were REO (bank-owned)
• 22% of all sales over the past year were Short Sales
• Roughly 61% of all sales were distressed in some regard (REO or SS)
• Unemployment in Rancho Cordova is 14.6% per EDD (as of 11/2010)
• Unemployment in Sacramento County is 12.8% per EDD (as of 11/2010)

By the way, here is a video from the Rancho Cordova Historical Society with over ten minutes of old photos and maps of Rancho Cordova.

If you’ve been looking for Rancho Cordova real estate information, I hope this was helpful for you. What do you see in the data above? Does anything stand out to you? Keep me posted if you have any questions or a need for a real estate appraisal or property consulting. I am a member of the Rancho Cordova Chamber of Commerce, and I do appraisal work for estate planning, probate, divorce, second opinions, FHA, property tax appeal, private loans, bankruptcy, and so much more. Call 916.595.3735, email me, or visit my company website.

If you cannot see the video in your RSS or email, click HERE. Thanks for watching. What do you think?

I recorded the video with my Flip camera, and the cool thing is my client kicked down a little money for me to do a video for them this time around.

Based on the graph above, when do you think a wave of foreclosures hit the market in the past three years? You got it right. The market was really hurting during the last quarter of 2008 and the first couple quarters of 2009. There is evidence that the market was already struggling in 2007, but the decline really went into high gear in the latter part of 2008. This release of the foreclosure floodgates caused a hefty and quick decline in property value as can be seen above. You can see also that the market has since since experienced some recovery. In my opinion, beyond inventory decreasing, one of the things that has helped to shape property value over the past couple years in this neighborhood is investors purchasing and flipping properties. There have been an enormous amount of flips in this area.

If you have any questions, let me know. You can give me a call at 916.595.3735, email me, or comment below.

As always, I had permission from my client to shoot and share video. I take client confidentiality very seriously for every appraisal I do, and I never share information on my blog or elsewhere that is confidential.

Let me know if you have any questions. Call me at 916.595.3735, send me an email, or connect with me on Facebook or Twitter.

What do you think of the video?

While in the Hillcrest Park neighborhood, I shot the following video as I was considering the vast decline in property value and the impact foreclosure can have on a neighborhood – even beyond real estate values.  

Condominium properties have been hit hard in many niches within the Greater Sacramento Region because the price of single family detached homes has become so much more affordable, and an HOA fee plus a mortgage payment often does not make good economic sense for buyers. Why pay more for a condo when you can get a detached home without an HOA fee, right? That’s often the rationale.

By the way, if you are in the market to purchase a condominium, I would strongly suggest you research the health of the HOA before making a purchase. It would be tragic to purchase a condo only to find out the association is bankrupt.

Are we out of the foreclosure woods? What do you think? What are you seeing in the market in the course of business or even in your own neighborhood?

Foreclosure Radar gives the following points (from YouTube): “Foreclosure filings were up in June after two months of decline. Foreclosure cancellations reached a record high of 21,962 in June, up 27.09% from May. The number of properties purchased by 3rd parties dropped by 23.73% since last month, but those properties bought were at the best margins in months. Fewer properties went back to the bank, down 23.73% from the prior month. Time-to-Foreclosure was flat month over month, but up 34.93% from June 2009. Time-to-Resell continued it’s slow ascent, up 5.95% for the banks and up 4.29% for 3rd parties.”

I am very pleased to see these foreclosures were purchased earlier this year in a bundle deal by the same buyer for $35,000 each, and they are currently being rehabbed. When I think of an area improving, this appears to be a win because improvement happens one house at a time, doesn’t it?

* Data is based on Sacramento MLS for all single family detached properties in Sacramento.

7/25/2000 – $110,000 sale
7/16/2002 – $278,000 sale
8/18/2004 – $435,000 sale
2/10/2005 – $459,000 sale
9/08/2008 – $377,500 sale  (maybe a short sale – did not list in MLS)
5/01/2009 – $104,250 (transfer to bank – foreclosure)
7/13/2009 – $140,000 sale

What do you see? Does anything stand out to you? Let me know if you have any questions about the local real estate market or your neighborhoood. One of the things I enjoy most about my job is that I get to talk with local home owners and real estate agents about important decisions they are making.

If you were in the market to purchase a property, would it matter to you whether something was labeled as “corporate-owned” or “foreclosure”? Is there any stigma in your mind for a home that is selling as bank-owned?

This property sold for $560,000 on 08/31/2005, went into foreclosure last year, and is now listed on the market at $309,800 as of 02/26/2010. The current MLS listing states, “Property has notorious history that must be disclosed.” 

Would you have any problems purchasing a property like this? Or would you consider renting this house? Would it bother you on any level or be no big deal? Creepy? Good investment? If you are a real estate agent, have you had experience selling a property with a stigma due to a murder, violent crime or some other heinous or notorious issue?

Original photos of 1426 F Street (it was a bit cloudy today unfortunately):