Trading real estate appraisals for bitcoin

Can I get a drumroll? I’m pleased to announce bitcoin will now be accepted as a payment option for my appraisals and consulting work. What is bitcoin? It’s a digital currency that can be used in various places online or exchanged for US dollars. From a business standpoint, I like the concept of being relevant to potential customers wanting to use newer technology, but I am also a fan of the lower 1% transaction fee through BitPay compared to PayPal’s 3% fee. There is definitely lots of hype and buzz about bitcoin right now, and some call it a fad, but at the same time I am all about wanting to meet customers where they are at and explore technology. You can check out my 3 steps to pay with bitcoin. And yes, I do still accept cash, checks and credit cards.

bitcoins real estate appraisal business - photo purchased and used with permission - 530

Questions: Would you ever use bitcoin? Do you think it’s something that will continue to grow in popularity or is it just a fad? Feel free to comment below.

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The smell of a slow and soft January market

We have one month under our belts for 2014. If you’re anything like me it’s been 31 days of perfectly executing all of your New Year’s goals and resolutions so far (that’s sarcasm). Let’s take a brief look at how the Sacramento real estate market unfolded in January. I’ll have some more stats to share soon , but for now let’s glance at median price, inventory and sales volume to get a brief sense of how things went.

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

sacramento real estate market trend graph median price and inventory since 2011 by sacramento appraisal blog

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

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

The Market Scoop:  This was a slow January. In fact, we saw the lowest number of monthly sales in the past six years in Sacramento County. The median price declined to $240,000 from $250,000 and inventory rose to 2.6 months from 1.9 months. However, despite only 932 sales there are currently over 2000 pending properties, which is important to consider as these may boost next month’s figures. On average it is taking 47 days to sell a home, so many properties that went into contract this month were not able to close escrow yet.

january sales - winter market - in sacramento county by sacramento appraisal blog

Freaking Out: It’s easy to freak out and use stats to say things like “The market declined by 3% last month” or “Inventory is at its highest level since 2011” or “Pitiful sales numbers in January”, but let’s chill out a little and give some context by recognizing the season. As you can see in the graph above, January ALWAYS has less sales than December and February is usually fairly similar to January. The market historically isn’t very aggressive in January and February, but it ALWAYS picks up in March in terms of sales volume (prices can either decline or increase, but there are more sales without fail when real estate spring fever hits). Yes, the market has felt sluggish and I have some legitimate concerns about the direction of interest rates and the true strength of the job and housing market, but let’s be sure to keep stats in context and continue to watch closely.

A Reminder: The market this year won’t be like last year, which means we are not going to see insane appreciation each month. In fact, think about it this way. If the experts are correct in thinking we’ll see mild appreciation in 2014, there really isn’t too much room to move up, which effectively means some months will show an increase in median price and others will show a decrease. The real estate market will not behave the same each month. Right now the market is soft, but let’s see what things are like in March.

Questions: How has the market felt to you? What are you noticing out there in the trenches? Comments are welcome below.

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Some random things I’ve seen in real estate lately

One of the great things about being an appraiser is coming across so many random things while inspecting houses. Here are a few gems I’ve seen recently. Enjoy

NFL on the wall - RG3 - by Sacramento Appraisal Blog

NFL Decor: If you’re looking for some ideas for Fall decorating, stop looking at Pinterest and start checking out NFL decals you can put in your Living Room. I saw this gem recently. I’m not too sure this would fly in my house.

built-in trampoline in ground - by sacramento appraisal blog

Built-in Trampoline: I don’t see many of these – especially when they are surrounded by concrete. On one hand I think it’s great, but on the other hand it could end badly for kids when they’re projected to the concrete. An alternative use in my mind could be a giant fire pit. Can you think of any other uses if the trampoline was not there?

american flag painted in neighborhood on wall - by sacramento appraisal blog

Neighborhood Patriotism: I saw this the other day at the end of a tract that separates two neighborhoods. It’s nice to see some patriotism on display. On another note, the shutdown has ended. What a relief!

Kitchen that was remodeled that needs to be remodeled again - by Sacramento Appraisal Blog

It’s a “Newer” Kitchen: This is not a very exciting photo, but I think it says something about real estate. This is a standard kitchen that was updated in the late 1980s. This house is located in a classic area of Sacramento where most homes were built in the 1940s or so. Does this kitchen get an extra value boost for being newer in age? Well, the kitchen is larger in size than other original ones in the neighborhood and it does have some nice vaulted ceilings too. But the reality is this “newer” kitchen needs modernization again. Most buyers would walk in the house and think, “I need to redo this kitchen”, so it is not really much of an asset.

View into bathroom window from next door - by Sacramento Appraisal Blog

Meet the Neighbors: I’m always surprised that builders put houses right next to each other with a direct view into the bathroom. Yikes, I didn’t need to see that!! This doesn’t usually show up in older style neighborhoods, but part of the issue with newer houses is the lots are smaller and the houses are so much bigger, which makes this an unfortunate byproduct (I still think builders can plan better though). I saw this recently in a house undergoing construction in Elk Grove.

external obsolescence - sacramento appraisal blog

A Train in the Backyard: I posted this on my Facebook page recently. Would it bother you to live near train tracks? Would the potential positive of backing to open space be negated by the sound of trains passing by? Whenever I appraise homes with external obsolescence like this, I snap a photo of the tracks or the trains passing by if possible.

Any thoughts? I’d love to hear your take on one of the photos above.

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Limbo and low inventory in Sacramento

It’s been amazing to watch housing inventory become so scarce in the Sacramento area. In fact, sometimes it feels like a limbo competition where it just keeps going lower and lower. A few days back I met up with Joel Wright to talk about the bottom of the market and how low inventory is driving today’s real estate market. Below is an unscripted video of our conversation (click here to watch on YouTube).

By the way, does anyone else talk with your hands like me? I should probably duct tape my hands when doing videos, but then I might not be able to speak…

For a detailed analysis of the Sacramento real estate market, check out the latest Wright Report. I haven’t seen a more exhaustive local report. You may be interested to read Why did it appraise “low” even with multiple offers? and also How to talk with appraisers in this changing real estate market.

How have you seen inventory impact the housing market or your strategy in business?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook