It’s so important to know exactly where one neighborhood ends and another begins. Misunderstanding neighborhood boundaries can have a dramatic impact on perceived property value. When dealing with a short sale situation, loan modification, property tax reduction, bankruptcy, or really any transaction, it could really backfire if the decision makers for your loan or legal documents do not take into account important market boundaries.

Let’s look at the map below as an example. The area traced in red is a portion of the Central Oak Park neighborhood in Sacramento, while the area traced in blue is known as Tahoe Park West.

Both of these areas are really separate neighborhoods despite being right next to each other (divided by Stockton Blvd). There is actually a huge difference in property value between these two areas as indicated on the trend graph below. The median price level throughout most of the past year in Tahoe Park West hovered around $150,000, while the median price level for Central Oak Park was closer to $60,000.

It’s easy to imagine how online valuation websites (like Zillow or Cyberhomes) or even inexperienced real estate professionals might make sincerely wrong value judgments by looking at all sales within a 1/4 mile radius or some other parameter that does not encapsulate the true neighborhood. That’s why it’s so important to work with professionals who really understand the local market.

How might misunderstanding neighborhood boundaries really do some damage?

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.

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.  

What’s going on in the Sacramento real estate market in the South Oak Park area? I plotted some sales in the 95820 zip code and wanted to share the following. The trend graphs below are based on recorded single family residential sales in MLS for the following boundaries: 12th Avenue to the north, Highway 99 to the west, MLK Jr Blvd to the east, and Fruitridge Road to the south.

Do you see in the graph how a few horizontal lines help us see a clearer picture? It looks like the top has decreased, the bottom has increased, and the middle has become more tightly-packed together.

The second trend graph takes a closer look at the past year of sales from above. I like this one because it really shows a clear separation between the bulk of the resale market and the rest of sales in the neighborhood. Properties that were purchased previously as bank-owned fixers are now being rehabbed and they look to be selling between $100,000 to $125,000 for the most part.

How would you describe this market? What is influencing change? What has driven the upper end down and the bottom level up? Do you think government financing and tax credits are playing a role in some of the changes above?

Please share your insight. Questions? Contact me at 916.595.3735, “like” my Facebook Page, comment below or email ryan@LundquistCompany.com.

Are you in or out? It could make a huge difference in property value whether you live in a certain neighborhood or not. A boundary line for a neighborhood could include anything from a street, park, city or county line, different design of houses, train tracks, commercial district, etc… Whatever it is that separates one neighborhood from another is very significant to be aware of because real estate is about location, location, location.

Let’s take a look at the Tahoe Park area of Sacramento. What are the boundaries to Tahoe Park? As you may know, the Tahoe Park neighborhood is comprised of four sections as shown below. You can read more about these four sections of Tahoe Park from a previous post.

Let’s think further about the neighborhood boundaries above. If you are local, do you see any big value differences between some of the bordering areas such as Tallac Village, Colonial Heights, Elmhurst, Oak Park or UC Med Center? Some of these portions are competitive or more similar to each other, but others are VERY different neighborhoods despite sharing a street border such as Stockton Blvd.

What sort of boundaries have you seen make a big difference in real estate values in the real estate market? Maybe you’re thinking of a certain dividing street, a freeway, or a newly constructed subdivision in the midst of an older tract. Or think of the home you grew up in as a child. What boundaries do you think defined that neighborhood?

Let me know if you have any questions. Feel free to call me at 916.595.3735 or ryan@LundquistCompany.com.

I’d like to take a few moments to reflect on my favorite appraisal assignments of the year. Maybe I’m jumping the gun a bit since 2009 is not quite over, but that’s okay. I won’t get specific about addresses or location because I take client confidentiality very seriously.

Top 10 Favorite Appraisal Assignments of 2009

1. Facuets Left On:  I appraised a bank-owned property in Solano County. It was a very nice property, but unfortunately all faucets and spickets were left on (with clogged drains), so there was extensive water damage. It was unclear if the damage was done by the disgruntled home owner or a vandal.
2. Oak Park Fixers:  This year I appraised quite a few fixer properties in the Oak Park area of Sacramento that were purchased by an investment group, re-habbed, and then re-sold on the open market to first-time home buyers. It’s nice to be a part of a project where the end result is good for the community.
3. Vacant Subdivision Land in Sacramento:  Acting as a property tax consultant, I valued two parcels in Sacramento County under the supervision of an AG (Commercial Appraiser). These sites were scheduled to be finished out as a subdivision, but then the market burst and subdivision building virtually stopped.
4. Spring Water & Cesspool:  I appraised a house in Placer County that was on spring water and a cesspool (as opposed to a well and septic tank). Do you think this would have an impact on market value? How much of a price discount would it take for the typical buyer to look over an atypical feature such as this to purchase the property?
5. Dilapidated Fourplex:  This property was interesting because it had repeated damage from squatters. I had to climb through a window to inspect one of the units too, and I cut my finger on broken glass (that made me remember this property even more).
6. Upgraded Duplex:  The residential-income market in Sacramento saw a huge decline in value over recent years. All of the latest sales in this particular neighborhood were fixers. So what is a bright and shiny upgraded non-bank-owned duplex worth in a marketplace of REO fixers?
7. Rancho Cordova Property:  I’ll be honest. Since my office is located in Rancho Cordova, it sure is nice to get local assignments in the same city. I don’t mind at all driving to other counties, but it’s a great thing to travel a mile from the office to take care of business. My business in Rancho Cordova definitely increased this year.  
8. Divorce Appraisals:  I do work for home owners and attorneys during a difficult time of life. It was a pleasure to provide excellent service to home owners in need this year and at least make the appraisal process smooth in the midst of a challenging situation. I grew up in a divorced home and I know it’s not an easy time of life.
9. Pre-Listing Appraisals for Local Agent:  I am a huge fan of working with local Realtors and it was a pleasure to establish a new working relationship with a particular agent who began to rely upon my knowledge and services this year. This year I had more referral work from Realtors and that’s a wonderful thing!!! I am also really grateful to be more connected to some stellar local real estate agents on Facebook and Twitter too.
10. Ripon New Subdivision:  There was nothing terribly complex about this assignment, but I really felt like I did a solid job on this appraisal in Stanislaus County and my client was very happy with the end-product. It’s just one of those I remember putting in a good amount of time and really enjoying the finished product.

I appreciate all my clients and colleagues who made 2009 a fantastic year. This has been a trying year for the appraisal industry in light of HVCC, but I am grateful nonetheless for all the good things that happened this year. Thank you.

If you are a real estate agent or home owner, what was the best experience you had this year with an appraiser? If you are a real estate appraiser reading this post, what were some of your favorite assignments this year.

www.SacramentoAppraisalBlog.com My Top 10 Favorite Appraisals of 2009

What is a half-built house worth in today’s market? I snapped the following image recently while heading through the Oak Park area of Sacramento. These three houses had begun construction, but during the building process they went into foreclosure.

This is not an uncommon scenario in today’s market, is it? We’ve all heard stories of builders who went under, a project that is on hold (or dead), and a very real slowness in new construction right now.

www.SacramentoAppraisalBlog.com Photos from the Field: Half-Built Houses