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A quick recap of February’s real estate market in Sacramento

March 6, 2014 By Ryan Lundquist 1 Comment

Let’s do a quick recap of how real estate unfolded in February in Sacramento County. There are two ways to read this post: 1) Briefly scan the graphs below in 30-ish seconds; or 2) Take a few minutes to digest the graphs and commentary.

February sales in sacramento county by sacramento appraisal blog

Sluggish Sales: It’s normal for there to be less sales during colder months, though overall the market has felt sluggish. That’s my take and many real estate agents have also been talking about how the market has seemed to lag since the beginning of the year (though conversations are beginning to discuss the market heating up for Spring).

sacramento real estate market trend graph houses sold since 2008 by sacramento appraisal blog

Similar to January: Sales were fairly similar to January in that there were only about 950 sales (single family detached). This number will go up slightly in coming days as more sales are reported, but it’s strong enough now to say this past month was fairly similar to the previous month in regards to sales volume.

sacramento real estate market trend graph median price and inventory since 2012 by sacramento appraisal blog

Median Price Increase: The real estate market bottomed out in early 2012 after many years of decline, and the graph above charts the market rebound. The median price since January 2012 has risen from $160,000 to $259,000 and last month saw an increase from $240,000 to $259,000. Technically we could talk about how real estate increased by 8% last month, but sales volume has been REALLY low, which makes the median price weak since there aren’t as many sales to pack into the data set. So take this huge increase with a grain of salt. We could also say the median price has not been at $259,000 for six years either, but let’s try to avoid sensationalism based on one month of data during a Winter season that had VERY few sales.

inventory since 2011 by sacramento appraisal blog

Story of Inventory: Inventory is now at 2.5 months, which means on a monthly basis there are enough listings to satisfy two-and-a-half months worth of buyers. This is still a low figure, which leaves some room for very decent competition (but not the blood bath of last year when inventory was at one month). Keep in mind there are about 2300 pending listings right now too, which is a huge number. Some of these pending sales will of course fall out of contract, but many should close to help boost an increase of sales in March (which is the norm in Sacramento County).

sacramento real estate market trend graph interest rates since 2001 by sacramento appraisal blog

Interest Rates Dipped: Interest rates saw a slight decline from January. When rates began to increase between May and June last year, it really impacted the real estate market and definitely helped to cool off values (investors began pulling back around the same time too). The market is definitely sensitive to the direction of interest rates and inventory in particular, so it’s important to watch trends carefully and consider the implications for the future.

sacramento real estate market trend graph median price interest rates inventory since 2008 - by sacramento appraisal blog sacramento real estate market trend graph median price interest rates inventory since 2011 - by sacramento appraisal blog

Layers Working Together: I know I am constantly talking about the layers of the real estate market. I don’t mean to beat a dead horse, but watching how trends are unfolding together can help give us clues into how the market may unfold in coming time.

sacramento real estate market trend graph median price and inventory since 2001 2 by sacramento appraisal blog

Some Context: If you’re looking for context for price levels, current values are similar to what they were during the first quarter in 2008 and toward the last quarter of 2003. Of course this is for the entire county and specific neighborhoods can vary greatly. Classic neighborhoods tend to be ahead of county numbers and the condo market tends to lag behind county numbers.

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Share the Graphs: As always, you can use these images unaltered in your newsletter, on social media sites or blog posts (just link back). See my sharing policy for more details about 5 different ways to share my content. Or if you need a quote for a blog post you’re writing, let me know.

Question: What are you seeing out there in the market? Do you sense Spring fever beginning to kick in or does it seem like the market is still lagging?

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Filed Under: Market Trends Tagged With: appraiser in Sacramento, Home Appraiser, home prices, home values, House Appraiser, interest rates, inventory, Real Estate Appraiser, real estate market trends, Sacramento Real Estate Market, trend graphs

Some thoughts on cigarettes and property value

February 5, 2014 By Ryan Lundquist 8 Comments

Do you smoke? I’m not trying to sound like I’m on a high horse, but I definitely don’t smoke. I think I was cured of any desire to do so as a kid after being in the car on many occasions with my late Grandma as she dragged her Virginia Slims with the windows rolled up. I guess it was a blessing in disguise, right? Anyway, whether you smoke or not, used to smoke or will smoke, let’s talk about the impact of cigarettes on property value. I’ve inspected quite a few “smoke homes” through the years, so I was glad to answer a question from a REALTOR friend about a home she is listing. Here is our conversation below (I’m sharing with permission). This post is not meant to be anti-smoker in any way, but only weigh a legitimate issue on how smoking inside can impact property value.

woman smoking indoors 2 - purchased and used with permission by Sacramento Appraisal Blog

Question: Do you have a generally accepted rule of thumb for negative adjustments to value for a house that has a pungent cigarette smoke smell? I’m having trouble convincing a seller that this is a big detractor. Without the smoke smell the house would probably sell around $285k, but I think a more appropriate value would be around $265k given the odor.

Answer: There is no standard adjustment because it depends on the condition of the house as well as what the market is doing. But usually a house that smells like cigarettes will sell toward the lower end of the price range for a few reasons. First, there is a smaller pool of buyers. In fact, many buyers simply wouldn’t purchase the home because of the pain of getting rid of the smell. Secondly, the house may likely be outdated already. I have found many “smoke homes” to have older carpet and an overall dated or retro feel. This means the house will probably not compete at the upper end of the market anyway. Lastly, a cost-to-cure and/or discount is in order. How much would a buyer spend on a property if the carpet has to be replaced and the interior has to be painted? A 20K adjustment is probably very reasonable when considering the cost to replace or very deeply clean all carpet and re-paint – not to mention the house may already be outdated anyway. One last consideration though is what the market is doing. If this house hit the market in early 2013 when real estate was acting like it was hyped on steroids, there would probably have been slightly less of a negative reaction because buyers are willing to look past some negatives when inventory is really tight. But now that the market has shifted, it’ll probably be much more of an issue.

Questions: Anything else you would add to my answer? When was the first time you were exposed to smoking or cigarettes? Comments are welcome below.

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Filed Under: Appraisal Stuff Tagged With: cigarette smoke and property value, cigarettes, Home Appraiser, home values, House Appraiser, impact of cigarette smoke, Negative impact in real estate, smoking

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First off, thank you for being here. Now let's get into the fine print. The material and information contained on this website is the copyrighted property of Ryan Lundquist and Lundquist Appraisal Company. Content on this website may not be reproduced or republished without prior written permission from Ryan Lundquist.

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The information on this website is meant entirely for educational purposes and is not intended in any way to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or any other potential real estate or non-real estate purpose. The material found on this website is meant for casual reading only and is not intended for use in a court of law or any other legal use. Ryan will not appear in court in any capacity based on any information posted here. For more detailed market analysis to be used for an appraisal report or any appraisal-related purpose or valuation consulting, please contact Ryan at 916-595-3735 for more information.

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