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Realtor Doug Reynolds

A flattening market, jobs and bathroom reading for Sacramento real estate

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If you’re looking to stay on top of the Sacramento real estate market, here are a few tidbits to check out. I hope this helps give you a sense of what is happening. If you have any questions or insight, feel free to comment below.

1) The Market is Flattening Out: Realtor Doug Reynolds posted a video two days ago about how the market in Sacramento has been flattening out. This is right in line with the way I’ve been describing things. It’s important to watch trends closely so we are empowered to employ the best strategies for business and be on top of our game for clients. This is worth a watch or listen below (or here).

It’s normal in real estate to see the market slow down in Fall and then heat up again in Spring. The only issue is that some locals are shocked to hear this since they have only heard the market is “on fire” or that values have increased by 30%. But when we take a closer look, the trend has shifted. We’re now in a new market, so let’s keep an eye on the past, but focus on the present and future.

Sacramento County price per sq ft - Sacramento Appraisal Blog

2) The Word on Unemployment: If you didn’t catch the recent news, the unemployment rate in Sacramento County is now 8.9% as of August 2013. It’s been hovering around 9.0% for a few months now, while the unemployment rate in California is currently 8.8% and it’s 7.3% in the United States.

Unemployment in Sacramento California United States - August 2013 - blog size - by Sacramento Appraisal Blog

Here’s my take on the interaction of jobs with real estate. The recent upward trend in values was very strongly influenced by forces external to the Sacramento market as opposed to our local economy. Now that interest rates are increasing and some investors have begun to exit the market (down nearly 8% over the past few months), the job market will stand out a bit more now that we are missing some of the outside power that gave the market a boost. Remember, there are many factors that impact real estate values, and jobs is just one of the “layers of the cake” so to speak.

The Wright Report3) Forty Pages to Explain the Market: This is the most exhaustive report I know of in Sacramento. It’s worth printing and reading in the bathroom (or wherever you do your reading) to help gain some context for what is influencing the local market. If you want to go green, just download and read it on your tablet or computer. It is 40 pages in length, so it’s not a quick blog style read (many of the pages are graphs). I contributed a page or two to this report as well as some charts, which is always an honor. Visit Joel Wright’s website or DOWNLOAD HERE (PDF).

Question: What are you seeing happening in the market?

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A bit less cash and a slightly different smell in the Sacramento market

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Cash stats showed a decline last quarter and properties are taking slightly longer to sell. What do you make of that?

I mentioned in early June that cash sales in Sacramento County were down slightly from the previous quarter. Since the data at the time was based on sales in only April and May though, I wanted to see how the last month of the quarter would steer the stats. Let’s take a look below to see what the numbers tell us now that the month of June has closed.

Cash sales in Sacramento Placer Yolo County through 2013 Q2 - by Sacramento Appraisal Blog

As you can see, there were definitely less cash purchases in Sacramento County from April to June 2013 (Q2) since cash sales decreased from 36.3% to 31.8% of the market. Stats in both Placer and Yolo County were also down.

cash sales in Sacramento County through 2013 Q2 - by Sacramento Appraisal Blog

The market under $200,000 still continues to be a cash feast though and has not changed much as 50% of all sales continue to be cash for the third quarter in a row. In light of the median price skyrocketing over the course of the year, the market under $200,000 has become far more competitive for first-time buyers and investors. I don’t see this letting up any time soon so long as rates remain relatively low and inventory continues to hover around one month of housing supply. The vast bulk of cash purchases are still under $200,000 in Sacramento County, though keep in mind about 25% of all sales between $200,000 to $300,000 were cash in Q2. That’s a strong market segment.

cash sales in Sacramento County - price levels - by Sacramento Appraisal Blog

What does this mean for the market? Ultimately less cash has seemed to create SLIGHTLY more opportunity for owner occupants. Take that with a grain of salt of course because the market is still HEAVILY in favor of sellers since there is only a one-month supply of inventory available. I don’t know about you, but I’ve been noticing in my appraisals over the past few weeks that the Days of Market (DOM) for current listings has been slightly higher than the DOM for closed sales over the past quarter. This means properties are taking a bit longer to sell than they were during previous months. I’ve been hearing a similar thread from some Realtor and investor contacts also. Yes, there are still properties being sold in days of being listed and there are multiple offers too. There is just a very subtle dynamic going on right now as explained above, and we’ll see where it leads.

By the way, I appreciate Realtor Doug Reynold’s take on the market in one of his recent YouTube videos as it compliments some of what I’m seeing. Give it a watch or listen above (or here) and let me know what you think.

UPDATED ON 07/05/2013: I wanted to clarify that these stats do not apply to every single neighborhood and every single niche market in Sacramento County. When determining trends for a neighborhood, it is very important to look at hyper-local neighborhood data.

Any thoughts?

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Tips to prepare for an appraisal inspection

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If you’re not famliar with the appraisal process, I hope this post can help you know what to expect during an appraisal inspection and how you might prepare for the inspection too. Sacramento Realtor Doug Reynolds interviewed me recently in the video below to get some tips for buyers and sellers. You can check out a more extensive list in a previous post entitled What Should You do Before the Appraiser Comes? Let me know if you have any questions, fears or stories about an appraiser coming to inspect your property. You can give me a call or send me an email.

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

How do distressed properties impact market value?

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Realtor Doug Reynolds interviewed me a short while ago about the impact of distressed sales in a neighborhood. How do short sales and foreclosures impact the real estate market in the Sacramento area? Here are some thoughts in a one-take video interview. For specific statistics, check out “Dear Doctor, how healthy is the real estate market in Sacramento?” and “What happens to foreclosure when prices go up?” I found the data in both of these posts to be very interesting. Enjoy.

Any other insight or thoughts about the affect of distressed sales?

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