Here is a before and after image of a house in the “Oak Park” area of Sacramento that one of my clients rehabbed recently. It’s a joy to see properties like this get an “extreme makeover” because it’s great for the community and wonderful for one lucky buyer too. The previous stairs were apparently failing, and so someone built a very shoddy walkway on top of them (don’t miss the huge pile of dirt underneath too). The new stairs are quite an improvement, don’t you think? Neighbors just might appreciate the upgrade too.  

Here is a panoramic view of the real estate market in the “Independence at Mather” subdivision in Mather, CA. All blue dots below represent sales in Sacramento MLS.

What do you see?

My thoughts on the Mather real estate market:

• First off, if this type of data makes you feel depressed, that’s understandable. I’d recommend not digesting these types of graphs if it doesn’t do good things for you emotionally. It’s not easy to swallow property values sometimes, and I get that. I purchased my home in 2004 and I can assure you I feel your pain.
• It looks like the market has really bottomed out. This doesn’t mean that it can never go below $150,000, but it is interesting to note a low point around $160,000-ish that was reached in 2008. This low level has been fairly consistent since that time as properties have continued to not sell below this marker (for MLS sales).
• Property values have clearly declined over the past three years.
• Keep in mind that many of the above dots represent distressed sales. True market value is often higher than where REO and Short Sale properties close. Yet, the distressed market tends to have a strong impact on property value in a neighborhood.
• Most sales are below $250,000. Properties above this level in Mather have tended to be ones with larger square footage and larger lot size (no surprise there). It always helps in Mather to back to open space too.
• Many home owners are likely paying too much in property taxes because of the decline in property value. If you want me to check out your property for free to see if there is a potential savings for you, fill out THIS form and I’ll get back to you promptly (this is my property tax appeal company).

Keep me posted if you have any questions. You can call 916.5953735, catch me on Facebook or email ryan@LundquistCompany.com.

I wrote about Arden-Arcade’s quest for cityhood last week and it was great to hear from residents on both sides of the argument. Thank you for your contribution. For the sake of information and further discussion, I wanted to follow-up with unemployment rates for Arden-Arcade over the past ten years. What do you make of the data below? Data source: EDD.

The truth is that unemployment rates in most cities and CDPs in Sacramento County are really pretty discouraging across-the-board, and they serve as a reminder that we are not “out of the woods” yet (see 10 years of county rates HERE). For reference, as you digest the data below, the unemployment rate in Sacramento County in July 2001 was 4.5% and the unemployment rate for July 2010 was 13.1%. I have not done an exhaustive comparison between Arden-Arcade and other areas as of yet, but I can if readers would be interested. 

Date  /  Unemployment Rate

July 2010  -  13.0%
July 2009  -  11.7%
July 2008  -  7.3%
July 2007  –  5.7%
July 2006  -  5.1%
July 2005  -  5.2%
July 2004  –  5.8%
July 2003  -  6.0%
July 2002  -  5.9%
July 2001  -  4.5% 

I don’t know that unemployment rates are a reason for or against cityhood, but I am definitely interested to hear from residents about quality of life issues and even how specific numbers above might correlate to real life in a community. Comments are welcome.

If you’re a buyer, real estate agent or loan officer, you’re probably deeply aware that if a property built before 1978 has chipping paint, that’s a situation that needs to be cured if you are doing an FHA loan.  

Why is that? Before 1978 lead-base paint was used, so if there is a defective paint surface on a house (chipping, flaking or peeling paint), then little Johnny shouldn’t be able to pull away pieces of paint for a quick snack. That smells like a health and safety issue to me (and HUD).

What about properties built after 1978? If a house has flaking paint, but was built in 1993, does the paint surface have to be cured? Obviously there shouldn’t be lead-base paint because the house was built post-1978, so it should be okay, right?

I asked this question last week at a presentation I gave at the Sacramento Association of Realtors and I think there was some confusion in the room on this point. Here’s the deal. The defective paint surface DOES have to be cured because FHA is not okay with bare wood which could lead to wood decay and not support the longevity of the property. The rule of thumb then is that if there is a defective paint surface, regardless of the age, the surface must be properly cured.

I hope this was helpful. Keep me posted if you have any questions. Call me at 916.595.3735, email ryan@LundquistCompany.com and catch me on Facebook.

Here’s a quick trend graph for you of all sales in the Pocket-Greenhaven area of Sacramento over the past three years. What stands out to you? What do you see?

I swear I don’t have some sort of water tower fetish. I posted a photo of a tower in Galt last week and now this week I’m sharing another image from the field today. While taking comp photos in the Pocket/Greenhaven area of Sacramento a few hours ago, this image stood out to me. No, it’s not the mothership from V. It’s a water tower off of Freeport Blvd.

I’m intrigued by real estate and how a certain view might impact whether a buyer will purchase a particular property or not. This water tower is not literally next to the backyard of the house above as it seems from my photo, but the view from my camera lense is really what it looks like with the naked eye. You’ll get a better sense of distance by viewing a “bird’s eye” image below from Sacramento MLS. Personally, I’m actually fond of this water tower. It has a good look and I love how it says “Sacramento: City of Trees” for passersby on Interstate 5. It probably wouldn’t bother me too much if I lived with such a view. That’s just me though.

Do you think a view of a water tower like this would turn you off? Or would any negativity associated with the water tower be offset by the positive of having no rear neighbors?

People ask me sometimes what I think about websites like Zillow or Cyberhomes. In short, I don’t think computers do as good of a job appraising properties as real humans. Call me biased, but there are some things that real people can still do better than machines. However, though these websites cannot fully replace real estate appraisers, they do have a place to help gain a ballpark figure for a house (please take that with a grain of salt though because figures can still be way off). Additionally, I’m a fan of the multi-year trend graphs that Zillow produces.

The Sacramento Bee actually published an article last Friday about this very topic entitled Home Front: Appraisal sites on Net often fail to pin down accurate prices. The bottom line is that websites like Zillow seem to have greater accuracy in tract markets with ample sales, but even then they are only so good because they cannot sift through value indicators like condition, important neighborhood boundaries, upgrades, and a local appraiser’s knowledge of the market area.

I ran some test cases over recent work I have done and found the following:

- My house (tract): Zillow was 28% high / Cyberhomes was 24% high.
- Elk Grove house 2.0 acres: Zillow was 46% low / Cymberhomes had no value.
- Tract House in Davis: Cyberhomes was 4% high / Zillow was 2.5% high.
- Sacramento River property: Zillow was 40% low / Cymberhomes had no value.
- Tract House in Galt: Zillow was 9.5% high / Cyberhomes was 5.0% low.

What do you think of these websites? What do you think they’re useful for? Do me a favor and run your property by Zillow and/or Cyberhomes and let me know the results.

Did you play with Legos as a kid? After building a four-story home last night with my six-year old son, I snapped a few photos to show just how much Legos can teach us about real estate. These images will give you a glimpse into some of the things I see while inspecting properties in the Sacramento area. Have a look and let me know if you notice anything else too.

I hope you enjoyed the pics. If you have any questions about real houses in the Greater Sacramento Region, give me a call at 916.595.3735, catch me on Facebook, or email me at ryan@LundquistCompany.com.

Put on your economist hat and let’s take a look at the past decade of unemployment rates in Sacramento County based on the month of June. What do you see? Comments are welcome below.

June 2010     12.6%
June 2009     11.5%
June 2008     6.9%
June 2007     5.4%
June 2006     4.9%
June 2005     5.1%
June 2004     5.9%
June 2003     6.3%
June 2002     5.8%
June 2001     4.5%

I’m a fan of good news, so I wanted to share something with you. A property owner I helped last December just got word that the Sacramento County Assessor has agreed with my opinion of value for his property. They had previously assessed his Elk Grove home for 2009 property taxes at $945,000, but my company provided detailed support to show his assessed value should be at $750,000. The Assessor’s office agreed!!! This means the home owner will receive a refund check around $2,000 because he overpaid on property taxes in 2009.

This particular home owner contacted me literally a couple of days before the deadline to dispute property taxes last year. It’s a good thing he reached out too because otherwise that $2,000 refund check wouldn’t be showing up in the mail.

As a side note, when an appeal is filed and the Assessor ends up agreeing with the appeal, they’ll send you a “Tax Change Withdrawal of Application for Changed Assessment.” Basically this means they are asking you to formally agree to the new opinion of assessed value and simultaneously withdraw your appeal. Usually home owners I help have some questions during this phase because nobody wants to sign something that sounds so unfamiliar. But if the value looks good, you should sign off. There is no reason to keep the appeal in process or pursue an appeals hearing if the Assessor has already agreed to an accurate reduced value. 

I love stories like this and I’ve been hearing quite a few of them lately too. It never gets old to hear a home owner will get a refund check of $2,000. Keep me posted if it looks like you might need help or if you simply want me to check out if there is a potential savings for you. Call me at 916.595.3735 or see www.SacramentoTaxAppeals.com.

I made this one-minute “before & after” video for a client (Housing Group Fund) to help show one of their recent first-time home buyer projects in Sacramento. I appraised this property and I have permission to post the information here. This is a block  construction house (cinder block) near the Fruitridge area that was purchased recently as a bank-owned fixer and then rehabbed extensively throughout. One of the features I really like about this remodel is that there is now sheetrock and texture on the interior walls so the house does not have a typical “block” feel to it. If you are reading in RSS, you can view the video directly here.

It’s amazing to see the difference from beginning to end. What do you think? 

I had several emails arrive in my inbox yesterday to announce Fannie Mae’s “new” requirements for appraisers beginning September 1, 2010. In short, one of the things they are cracking down on is that appraisers must have knowledge of the local market as well as data sources for the market. Here is a snippet from Inman News:

“Fannie Mae has put lenders on official notice that they can only use appraisers who are knowledgeable about the area in which they are being asked to value property, and who have the ability to access records on recent sales in those markets.”

I don’t want to be the bearer of bad news, but this is nothing new for appraisers. We are supposed to be “geographically competent” already (know the local market) and it’s unthinkable that an appraiser would attempt to do an appraisal on a property when he/she does not even have data sources. In short, I understand the need for Fannie Mae to step forward here in light of some of the horror stories from HVCC, but this isn’t an earth-shattering revelation for appraisers because USPAP (our rules) already mandates us to know the local market. However, depending on how this rule plays out, that could be the interesting part.  

My big question is how will it be determined that an appraiser is “knowledgeable about the area” where he/she is appraising? Will there be an essay test, quiz, series of questions to answer, or will it be based on the appraiser’s proximity to the property (say, the appraiser has to live nearby)?

What do you think about this new rule? How do you see it impacting the real estate market? Do you think it will increase the quality of real estate appraisals? What are the positives, negatives and potential consequences?