I came across this street in Sacramento last week and shot a quick video. Which house do you think might be overbuilt for the area? Does one stand out to you? The answer is obvious, I know, because one house is defnitely 2x or more the size of surrounding houses.

What disadvantages or advantages might an overbuilt house have? I’d love to hear your comments and stories below.

Let me know if you have any questions. Call 916.595.3735, email me, or contact me through my appraisal website.

Home owners often wonder how far the real estate market in the Sacramento area has declined since the housing “bubble” burst several years ago. Or in other words, if you bought your house today, how far back would you have to go to find the same price in the past? The graphs below from the Sacramento Association of Realtors help answer this question as they compare median sales price in respective zip codes to the county-wide median sales price from 1997 to 2010.

Have a look at the following graphs, see my commentary below, and let me know what you think. What do you see?

Carmichael Trend Graph (95608 zip code):

Elk Grove Trend Graph (95624 zip code):

Elk Grove Trend Graph (95758 zip code):

Fair Oaks Trend Graph (95628 zip code):

Greenhaven / Pocket Trend Graph (95831 zip code):

Land Park / Curtis Park Trend Graph (95818 zip code):

Mather Trend Graph (95655 zip code):

West Sacramento Trend Graph (95605 zip code):

Basically, if you bought a house today in the post-bubble real estate market in Sacramento, you’d be paying somewhere around late 2001 house prices generally (depending on the area of course). Many areas currently have a median price somewhere just before 2002, while some of the higher-priced zip codes tend to have a median price level right now closer to 2003-ish level. Keep in mind too that each house is different and may or may not be consistent with the overall zip code trend.

If you have any questions or insight, I’d love to hear your comment belows. If you have a need for my real estate appraisal or consluting services also, feel free to call 916.595.375, visit my website at www.LundquistCompany.com or email ryan@LundquistCompany.com.

How do the graphs above strike you?

I took this photo a few days back as a comp photo for an appraisal I’m doing near the Del Paso Heights area of Sacramento. This image tells an obvious story of a new roof being installed – but not just a newer roof, but a different type of roof. The house is being transformed from flat to hipped in style. The first image is an MLS photo.

The interesting thing to note while driving through this neighborhood is that there was at least one other house having a gable or hipped roof installed. Moreover, though there are still quite a few flat roofs in this neighborhood, many roofs have already been converted to a higher pitch. I’ve seen this same phenomenon in West Sacramento too. Does this say anything about the market?

Which style of roof do you prefer?

My Realtor friend Jenifer Miller invited me yesterday to give a 90-minute talk to a group of new real estate agents at Lyon Real Estate in Elk Grove. It was fun and I hope overall helpful too as we discussed how to more effectively communicate with appraisers in an HVCC world as well as a few tidbits on FHA minimum requirements.

Anyway, one of the members of the class brought up a great question. He asked how properties could not be worth at least their replacement cost. The truth is that we see so many properties in the Sacramento area selling far below what they would actually cost to build from scratch (cost of land + all improvements). 

That’s the nature of the market these days. But why is that? There are many factors to consider. Do you remember the real estate bubble? It couldn’t have lasted forever. Property values really climbed too quickly to enormously high levels, didn’t they? When the bubble burst, it changed the real estate market. There ended up being a huge oversupply of distressed properties listed on the open market, and these REOs set the pace for the rest of the market. Keep in mind too everything that was going on in Wall Street, the bailouts, and the economy beginning to sincerely struggle. All of these factors (and more) influenced property values.

Moreover, check out unemployment figures to the right for both Sacramento County & Placer County. These April 2010 stats from the Employment Development Department show an unemployment rate of 12.5% in Sacramento County and 11.5% in Placer County. Let’s contrast this with data from April 2006 that shows the unemployment rate was 4.8% in Sacramento County and 4.3% in Placer County. Things changed, didn’t they? In light of unemployment rates being significantly higher nowadays, do you think buyers could really afford to purchase houses right now at 2006 levels?  

What do you think? I’d love to hear your insight.

Check it out. I started a Facebook page for my business last week. My rationale for taking the plunge is threefold: 1) I like Facebook and I use it all the time; 2) Facebook is a ripe arena for conversation; 3) I want to make sure to be available and able to connect with others in this simple (free) way. Click the image below (or here) to visit the page.

You may wonder, “well, Ryan, you are so into social media, so why did it take you so long to create a Facebook page?” Honestly, I felt conflicted for a while, so I needed time to really think this through. Facebook is so personal, and I just didn’t want to be “that guy” who looked and sounded like he was marketing to his friends. This was really a philosophical hurdle that I needed to sift through over time before rolling out in confidence with a page. It just took a bit of time for me to ultimately feel comfortable enough that starting a page was the best move, and that it’s acceptable and non-spammy to have a page for business (well, non-spammy depending on how you use it of course). And by the way, I am not “that guy”.

Do you have a Facebook page? Why? Why not?

They say a picture is worth a thousand words, and in this case it’s true. I noted quite a few bullet holes in the stucco of a house on a recent appraisal inspection. I’m not a big gun guy (or CSI fan), so I couldn’t tell you what type of firearm caused this damage, but I do know that holes like this are a sad commentary on reality.

Here are a couple of trend graphs below for the 95742 zip code of Rancho Cordova. This area is comprised mostly of “Anatolia“, but also consists of a development called “Sunridge”, which is not part of the Anatolia HOA. 

You be the appraiser here. What do you see in the trend graphs below when looking at the past years of sales? Is there anything you notice to be different or similar when comparing the two graphs? 

Past three years of sales:

Past one year of sales: 

The yellow pages used to be the go-to source for information, but nowadays we use search engines. Whether in need of directions, movie times, or a solution to fixing a leaky faucet, we go online to find the answers.

This is true for personal matters and also for business. I know many people find my website and blog because they’re looking for information on the real estate market in Greater Sacramento or they’re maybe in need of appraisal services. In fact, seconds ago I returned a phone call from an out-of-state Realtor hoping to ask me a question about FHA appraisal standards. Or last week a home owner found me online and then hired me to do a retrospective appraisal on his property for his estate settlement. The stories go on and on like this. It’s just the way that business (and life) happens these days, and I am constantly amazed at how quickly we can come by good information. 

As a compliment to this post, I made a “search story” on YouTube. This is one of Google’s latest free and interesting gadgets. Have you made a “story” yet?

With all that being said, I’m glad you’re here. By the way, what did you type into a search engine to make your way over? If you end up having any questions about real estate or anything you see me mention on my site, let’s talk. I’m available for you at 916-595-3735 or ryan@LundquistCompany.com.

The question “How is the real estate market doing?” usually deserves more time than just 30 seconds. There’s definitely background research, information, and experience needed to answer this question properly. 

I wanted to take you through (in part) how I get this answer as a Certified Real Estate Appraiser in the Sacramento area. In the video below (or HERE) I analyze a portion of the Lincoln Crossing community in Lincoln, CA, and I’ll show you what goes on in my mind as I crunch numbers and explore the local market. I hope this video is helpful.

I ran into an acquaintance at Starbucks recently and we ended up having a very brief conversation about the real estate market in Sacramento. This friend of a friend just happened to be spending some time with her Realtor, and while waiting for our drinks to come to the bar, the Realtor asked me, “So how is the real estate market doing?”

We literally only had about a minute to talk, and like usual I find that it’s no small task to truly sum up the happenings of the real estate market in only sixty seconds. I suppose technically real estate market conversations can be treated like some sort of a speed-networking introduction, but my sense is that this type of exchange is really best for sitting down over coffee instead of waiting for coffee. Nonetheless, I had the brief conversation of course, but I found myself wishing for more time to realy grapple with different facets of the market. 

I mention this because I have quite a few visitors to this blog every day (thank you). People type in questions in a search engine to find answers to what they are looking for. So I say to you, if you have questions about the local real estate market, appraisal standards, FHA, a particular neighborhood, property taxes, or any other topic you might find on my blog, I just wanted to let you know I’m accessible.

You can reach me at 916-595-3735, ryan@LundquistCompany.com, on Twitter at @SacAppraiser, YouTube, Facebook, or in the form to the right or below. Please contact me for questions, discussion, or if you are in need of my appraisal or property tax appeal services.

By the way, does anyone keep an app on your phone to find coffee shops, whether Starbucks or something else?

This comes up for FHA deals when investors purchase properties and then “flip” them. I’ve seen quite a few flips in the Sacramento area over the past year (yes, even in this economy). I hope the information below proves helpful in case you are wondering when a second FHA appraisal is required during a flipping scenario. Verbatim from HUD:

FAQ : Is a 2nd appraisal only required under the Property Flipping Rule?

Solution Details : Under property flipping guidelines, a lender must obtain a second appraisal by another appraiser if:
1. the re-sale date of a property is between 91 and 180 days following the acquisition of the property by the seller, and
2. the resale price is 100 percent or more over the price paid by the seller when the property was acquired.

When a second appraisal is required

• It must be completed by a FHA Roster appraiser selected by the Direct Endorsement lender that is underwriting the loan.
• The cost of the second appraisal may not be charged to the borrower.
• The lender must not request a second case number in the FHA Connection for the purpose of obtaining the second appraisal and is to independently contact the appraiser.
• Only the information for one appraisal may be entered into the FHA Connection appraisal logging screens, which is the appraisal that is relied upon to determine the maximum loan amount.
• Copies of both the first and second appraisals must be included in the case binder submitted for insurance endorsement.

ML:09-48  Handbook 4155.2: 4.7, 4.7.f, 4.10.b-c

If you have questions or any appraisal needs, feel free to contact me at 916-595-3735 or ryan@LundquistCompany.com.

When I do appraisals for FHA loans, this situation comes up quite a bit, and my sense is there is confusion in the marketplace about this issue. When an FHA appraisal has been done in the name of one lender, but then the loan transfers to a new lender, does the new lender need to ask the appraiser to “reassign” the appraisal so that the appraisal is in the name of the new lender? Nope. See below.

Here is all you ever wanted to know – verbatim from FHA/HUD:

FAQ : When a case number is transferred with a completed appraisal, may a new appraisal be requested?

Solution Details : When a borrower has switched lenders, the 1st lender must transfer the case to the 2nd lender upon borrower request. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

In accordance with USPAP, the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. The appraiser cannot ‘readdress’ (transfer) the original appraisal report to another party and must perform a new appraisal assignment in compliance with Advisory Opinion #26 and FAQ # 74 in the 2008-2009 edition of USPAP.

For cases assigned on or after January 1, 2010, a 2nd appraisal may be ordered by the 2nd lender when:
1. The 1st appraisal contains material deficiencies determined by the DE underwriter for the 2nd lender.
2. The appraiser performing the 1st appraisal is on the 2nd lender’s exclusionary list.
3. Failure of the 1st lender to provide a copy of the appraisal to the 2nd lender in a timely manner would cause a delay in closing, posing potential harm to the borrower. Potential harm includes events outside of the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees.

For cases in 1 and 2 above, copies of both appraisals must be retained in the case binder. For cases in 3 above, the 1st appraisal must be added to the case binder when it is received.  In all cases, the lender must document why a 2nd appraisal was ordered and retain the explanation in the case binder.

FHA prohibits appraiser shopping where lenders order additional appraisals in an effort to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.

I hope this was helpful. If you have any questions, feel free to call me at 916-595-3735 or email ryan@LundquistCompany.com.