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Land Park

Seeing the market over two decades

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Buckle up and let’s take a drive through the past 20 years. Where has the market been over these two decades? Since MLS recently made it much easier to extract older data, I had to do this post. I hope you find it useful or interesting – even if you aren’t in the Sacramento market.

SOME THINGS TO KEEP IN MIND:

1) Data: We are only as good as our data and our ability to understand. Some graphs below are very clear in their trends, but others probably aren’t meaningful because of massive data or an enormous price range.

2) Not back: Many lower-priced areas are not back to their price peak in 2005.

3) Back: Some well-established areas have exceeded previous peaks.

4) Different trends: Not all price ranges, locations, and property types have moved the same way, so let’s be cautious about sweeping generalizations about the entire market. After all, the condo market might be far different from the 2-4 unit market or vacant land.

5) Inflation: Prices might be similar today to where they were in 2005, but that doesn’t mean values are the same. I know, that’s so technical, but when we factor in inflation over 13 years, it’s really not the same thing when comparing today’s prices with prices from 13 years ago. Keep in mind the market today has far different dynamics from 2005 also.

6) Bubble: Graphs like this can often lead to conversations about a housing “bubble.” If it’s relevant, please read peak prices and an open letter to buyers worried about another housing bubble.

SIDE NOTE: I’ve been having major website issues over the past 2 months. I’ve switched hosts, and that should solve the problem of down time.

DOWNLOAD ALL GRAPHS: You can download all images as a zip file. I included both a web-friendly size and larger ones. Please use as you see fit (unaltered). If you post somewhere online I always appreciate a link back.

Rosemont:

River Park:

Meadowview:

Vacant Residential Land:

Million Dollar Sales:

Pocket / Greenhaven:

Rancho Cordova:

Sierra Oaks:

Loomis:

East Sacramento:

Duplex Sales:

Gold River:

Land Park:

Elk Grove:

Garden of the Gods:

Sales under $50K in Sacramento County:

Del Paso Manor:

Tahoe Park:

Fair Oaks:

Treelake / Ashley Woods (Granite Bay):

Condo Sales in Sacramento County (and Downtown):

Colonial Heights:

College Glen:

Davis:

West Sacramento:

Bella Vista High School Boundaries:

Arden Park:

Folsom:

Arden Manor:

95815 Zip Code:

4-Unit Sales in Sacramento County:

Roseville:

I hope this was interesting or even fascinating. I’m intrigued and excited about having more data at my disposal (thank you Metrolist). Thanks everyone for your graph suggestions too. I reached out on Facebook, Twitter, and LinkedIn and got to most of what people asked for, though I couldn’t do them all.

Questions: What are your thoughts about the market after seeing the graphs above? I’d love to hear your take.

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Cherry-picking comps & being connected to the neighborhood

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On paper it looked like value was going to be so much higher. Why? Because comps to the north were easily 10-20% higher, and even Zillow came in $100,000 above the appraisal (ahem). The big cause of such a legitimately lower appraisal boiled down to one thing. Location. Today I want to show a situation where a small section of the neighborhood was blocked off from the rest, and it was a big deal for value. Have a look below and let me know what you think. Anything to add?

land park neighborhood sacramento

The value issue: As you can see, this pocket of housing in the Land Park neighborhood isn’t accessible from the rest of the neighborhood besides a frontage road next to I-5. In other words, this section is disconnected. What sort of impact is there (if any) for being cut off from the rest of the neighborhood?

land park neighborhood sacramento 3

Methodology when only 5 sales in 5 years: When appraising something in this section, there were zero sales over the past 2 years and otherwise only 5 sales in the previous 5 years. This means I had to really study older sales to understand how value works. Here are the five sales:

land park neighborhood sacramento 4

What I ended up doing was comparing sales in this small pocket with similar sales at the same time in other areas of Land Park. Also, my goal was to find other patches of housing in the expanded neighborhood that seemed to sell at the same level. If I could find other areas selling at similar price points through the years, then current sales in those areas are probably my best comps for today.

land park neighborhood sacramento 5

land park neighborhood sacramento 6

Conclusions: After looking through all five sales I observed the following:

1) Some of the lowest prices: This small housing patch has some of the lowest prices in the neighborhood as shown with the yellow dots in the graph below.

Land Park trends by Sac Appraisal Blog

2) 10-20%+ easily: If I were to cherry pick “comps” directly to the north, there is easily a 10-20%+ price difference for otherwise similar houses. The truth? Location matters. So does being connected to the rest of the neighborhood. In some cases a few streets that are disconnected might not sell differently than the rest of the market, but it could also be a big deal like the example above. The truth is if we cherry-picked nearby higher sales, the value would’ve been inflated by $60-80K+. 

3) Limited by 90 days: It’s tempting to only look at the past 90 days of sales, but that can be far too limiting – especially in a situation like this. Also, a 5-minute comp check isn’t realistic. At times we might spend hours researching before beginning to understand how the immediate neighborhood compares to the rest of the market. We might even call colleagues and seek out other opinions too.

4) True comps: Other patches of housing in Land Park that tended to command similar prices were very busy streets or homes having a huge influence from nearby commercial properties (or heavy fixers that would have otherwise sold at much higher levels in average condition). I don’t say this to be negative about any of Land Park, but only to be objective as an appraiser trying to explain how value works in some areas compared to others.

I hope that was helpful.

Two classes I’m teaching in May: By the way, I’m teaching a class at SAR in a few weeks called How to Think Like an Appraiser. I’m also doing a blogging class. Click here for details.

Presentations - sm

Questions: What point above stands out to you most? Anything else to add? I’d love to hear your take.

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Convincing sellers to NOT overprice their homes by making graphs

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The market is overpriced. So if you are a real estate agent trying to communicate with sellers, how do you get someone who wants to test the market at $500K to realize a more reasonable price is $375K? There are surely many strategies, but today I want to mention the power of graphing neighborhood sales. I don’t mean to beat the dead horse by bringing this up again, but knowing how to graph will help you communicate effectively, stand out from other industry professionals, and seize your role as a market trend expert instead of letting Zillow have all the glory. Sure, you can show your client a graph of city or zip code trends by using Trendvision, but it’s hard to argue with neighborhood-specific data.

making graphs - image purchased by sacramento appraisal blog

A letterhead to give your sellers: Before we dig in, here is a letter I wrote for sellers about things to consider when pricing in this market. This letterhead is based on a post I wrote recently, but I tweaked a few things. See the image below and DOWNLOAD here (PDF). Feel free to email or use as you see fit. Obviously the letter does not address a specific property. If you need a letterhead for your specific property, let’s talk about some consulting.

letterhead

Excel Tutorial: I know, you don’t use Excel because it’s only for nerds. But let me break it down for you below so you can join the club. Previously I shared a tutorial on how to graph with Gnumeric, but I had a few requests for using Excel instead since that’s what most people already have on their computers.

land park two-bedroom graph example by sacramento appraisal blog

This graph shows the range of similar-sized neighborhood sales is between $300-375K for the most part (instead of $500K). This can be a very powerful visual, especially when you begin to show the sales at $375K have been remodeled.

A tutorial on how to show the market: I recommend watching the tutorial below and then pulling up some MLS data for a neighborhood you are working in so you can create a graph by following the steps I took. This is perfect for Sacramento MLS, but as long as you can export data from your MLS system, you should be okay too. You may need to pause my video several times or rewind at moments. Whenever we do something new, it takes a while to catch on. If you don’t have Microsoft Paint to paste the graph like I did, you can use a different photo editing program, or maybe use a snipping tool on your computer. Additionally, you can open up Paint and simply start a new file, and then paste your graph (as opposed to opening an existing photo like I did). Watch below (or here if it’s too small below).

Please let me know if you have any questions. I hope this was helpful. Perhaps this will spur on a new skill set for you that can make a difference in your business.

Questions: Was the tutorial helpful? Anything you need clarity on?

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The scoop on the value of neighborhood trees

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I read a short article last week entitled “City Trees and Property Values” (pdf) by Dr. Kathleen L. Wolf after hearing a representative from the SacTree Foundation speak at a Realtor event. Dr. Wolf’s research shows that trees generally increase property value. Her study indicated a 2% price increase for a property with a mature tree (greater than 9 inches thick), 3-5% increase for trees in the front yard, and 10-15% increase for mature trees in high-income neighborhoods.

While initially some of her stats seem startling, I do think she is right that trees add to the overall value of a property. This doesn’t mean a house is automatically worth 2 or 9% more due to having the tree set-up she mentioned, but trees generally do yield a value contribution. In an objective sense, trees add worth due to boosting energy efficiency due to shade, while there is also a subjective element where they tend to increase curb appeal among buyers. It’s hard to ignore that some of the most highly priced and sought-after streets in the Sacramento area are lined with enormous trees. Think the Fabulous 40s, Curtis Park, Land Park or Arden Park to name just a few. Granted, these streets typically have very large and well-maintained houses too, but there is no mistaking that a canopy of mature trees stretching along a particular street tends to give a very positive impression to buyers in the market for that street in comparison to others. Agree? Disagree?  

Here is a video of Jacobe Caditz with the Sacramento Tree Foundation speaking about the benefit of trees last week at the Sacramento Association of Realtors.

What do you think? How have you seen trees or a lack of trees impact real estate value? I’d love to hear your thoughts.

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.