I interviewed Vice Mayor David Sander of the City of Rancho Cordova to talk about the “Broken Windows Theory“ and how it is relevant for neighborhoods. There is definitely a connection between crime, blight and property value, and this theory points us in the direction of taking care of the small issues in a neighborhood to help the bigger picture - increase safety, a sense of community and property value. Watch the video interview below or here.

Do you buy into the concept of the Broken Windows Theory? What are some of the small things people sometimes don’t take care of in a neighborhood that really impact the overall look and feel of the neighborhood?

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, www.LundquistCompany.com or via Facebook.

How is unemployment doing in the Greater Sacramento Region? Have a look below at Sacramento County and ten surrounding counties. Data from EDD - December 2010.

What stands out to you about these rates? 

12.7%    El Dorado County
20.1%    Merced County
11.2%    Nevada County
11.2%    Placer County
12.6%    Sacramento County
18.0%    San Joaquin County
12.1%    Solano County
17.6%    Stanislaus County
21.5%    Sutter County
14.3%    Yolo County
19.4%    Yuba County

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, www.LundquistCompany.com or via Facebook.

Sometimes banks seem cooperative when handling short sales and other times they don’t seem to want to budge from a certain price level – even if that price is above market value. Let me give you a real scenario so you can see this phenomenon at work and also how a BPO and appraisal fit into the story. I’ve included some tips below too.

Real Short Sale Scenario: The bank has stated they’ll accept a price for a Sacramento property at $200,000 based on a BPO. A “BPO” is a “Broker Price Opinion,” which is a valuation by a real estate agent (broker) of the subject property. This can be done from a desktop or a full interior or exterior inspection. In this case, I’m not sure what exactly was done or when the BPO was completed either, but the Listing Agent trying to sell this property ordered a full appraisal from my company to help show the bank what true market value looks like. The hope from the agent’s standpoint is that the bank will budge on their price. This particular agent orders appraisals from me regularly, so obviously this bank listens.

BPOs and Appraisals: Let’s back up for a second. Sometimes banks are ordering both appraisals and BPOs behind the scenes so they are equipped to make decisions about their inventory. The bank mentioned above is not ordering appraisals though, so each bank obviously has its own practices. Clearly banks want to minimize their losses, so they don’t want to accept an offer far below market value (well, you’d think). As an appraiser, I have banks hire me directly to help them decide on whether to accept an offer or not. In these cases my appraisal has nothing to do with the buyer or the buyer’s loan either, but it’s all about the current loan on the property (loss mitigation). On the other side, I do appraisals for real estate agents and home owners who are trying to doing a short sale. They hire me when the bank is seemingly out of touch with the market and only willing to accept offers far above real market value. Maybe the bank is relying on bad information for pricing or an outdated BPO or appraisal?

Crunching the Numbers: Put on your appraiser hat with me and look at the graph below. Does $200,000 maybe look high based on all recent model match sales and listings? The last sale above $200,000 was in 2008. The most recent sales are right around $180,000 or below, and the most recent listings are between $150,000-$160,000 with a clear trend downward. Whenever you see listings priced lower than recent sales, it could indicate aggressive pricing, a further decline in value, slow Winter months maybe, or possibly some external factor (economy, job losses, environmental disaster…). It’s always important to ask why listings are priced lower than the most recent sales, and decipher what that says about market value – if anything. In this case, the most recent sale in January actually had a contract date back in October, and the market has since declined a bit and softened due to Winter months. The current listings are actually a pretty good example of what buyer’s are willing to pay right now (slightly agressive pricing though).

If you’re in a situation as a home owner where you are trying to do a short sale, but the bank seems to not be cooperative to lower the price (if it’s legitimately too high), here are some tips for you.

1. First off, make sure you are working with a local real estate agent. It’s nice that your cousin in San Diego is a Realtor, but does your cousin understand the local market in Sacramento? No offense to your cousin of course. 
2. Make sure your agent has knowledge of the market area and a proven track record of short sale success. Everyone and their mom is a “short sale expert” these days. Just make sure your agent is equipped to really work hard to get results. There are so many good agents out there, and if you’re in the Sacramento area, I’m happy to point you in the right direction to someone trustworthy.
3. If the bank absolutely won’t budge on their price and you’ve exhausted other resources, it may be worthwhile to order a full appraisal to help illuminate true value. Think about this and talk with your agent about this option. Let me know if you have questions too.
4. Local agents say that short sales have been far easier to negotiate these days in comparison to several years ago. However, keep in mind that they are still difficult in many cases. I don’t want to deflate your optimism, but it’s important to be realistic that short sales don’t work out every time. Just do your best to really exhaust your options, work with a great agent, and don’t lose hope – no matter what happens.

What do you think? If you’re going through a short sale right now, I’d like to hear about your experience. Do you have any other tips you’d give to home owners about how to help the short sale process go as smoothly as possible?

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, www.LundquistCompany.com or via Facebook.

Now that the first Tuesday has passed and the polls are closed, let me give a few comments about real estate-related measures and propositions on the ballot yesterday in the Sacramento area.  

Measure D: A vote on Arden-Arcade Cityhood
Residents voted very strongly against the Arden-Arcade area of Sacramento becoming a city. Based on conversations with residents and signage over the past two months, it seemed like the “no” vote was strong, but it was actually overwhelmingly strong with 76.05% of the vote against cityhood. The most recent areas in Sacramento County to become cities have been Rancho Cordova, Citrus Heights & Elk Grove, but Arden-Arcade will not join their ranks anytime soon.

A blog post on the “Stay Sacramento” website today says the following:

In a lopsided win, Measure D went down to a sounding defeat with gathering only 23% of the vote to an overwhelming 76% of voters who said no to this risky venture. It was a passionate fight on both sides but the majority vote won out to prevent another layer of government coming to our region. Today it is time to forge forward and work together to make our communities better. We hope those who supported Measure D will join us in our efforts.

Proposition 19: Legalization of Marijuana.
This proposition did not pass, so I suppose I’ll continue to see more tomato and cucumber plants in backyards of properties I inspect instead of cannabis. 58.97% of voters said “no” to the legalization of marijuana. Speaking of pot, I just looked up half-a-dozen local pot house comps for a local Realtor who recently listed a former “growing facility” in a nearby community. Would you purchase a house that was formerly used for marijuana cultivation?

Any thoughts on the propositions above or any others that you feel impact real estate?

There was quite a stir two days ago when The National Bureau of Economic Research announced that the recession is over. Have a look at two paragraphs from their press release (taken from their website):  

“The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.”

I get what the National Bureau of Economic Research is saying, but let’s take a look at unemployment rates. When the recession began in December 2007 according to the NBER, the unemployment rate in Sacramento County was 5.7%, and when the recession “ended” in June 2009, the unemployment rate was 11.5%. As of August 2010, the unemployment rate in Sacramento County is 12.8%.

What do you make of the news that the “recession is over”?

I shared some good news a few weeks back that Sacramento County refunded me $398.96 after I appealed my 2008 property taxes. Well, yesterday another check arrived in the mail for $449.02 for my 2009 property taxes.  Here’s my story.

Taxes are a part of life and we should only pay our fair share – and no more!!! Please contact my tax appeal company so we can see if there is a potential savings for you. If there is, let’s move forward to help you reduce your property taxes (we have very reasonable fees). If not, then we’ll shoot straight with you to let you know if the Assessor has you valued correctly. Click HERE and we’ll look up your property for FREE.

So how should I spend the $847.98?

Will the Arden-Arcade area of Sacramento become a city? We shall see. There is a measure on the ballot for November 2010 that puts this important decision in the hands of residents (Measure D). 

If you live in the Arden-Arcade community or have an opinion about cityhood either way, I am very curious to hear what you think, especially as it pertains to the current quality of life under Sacramento County. I’m paying close attention to this issue because it’s my professional duty to know what is happening locally, but more than that I am a resident of the newest city in the Sacramento area and my Rancho Cordova antennas are tuning in.

The image below shows boundaries for Arden-Arcade.  

Links for further reading about Arden-Arcade:

Arden-Arcade Cityhood Observer (blog)
Arden-Arcade Cityhood Website
Arden-Arcade Sacramento County Website
Arden-Arcade Wikipedia
List of Arden-Arcade Council Candidates
SNR Story: Is Sacramento cracking up? 7-10-10
Sacramento Bee: In Arden-Arcade, cityhood fever heats up again 08-18-10
Stay Sacramento Facebook Page
Stay Sacramento (opposition to cityhood)
Yes on Measure “D” Facebook Group

On Monday I wrote about my property tax refund of $398.96 from Sacramento County, and I ended up making a complimentary video. I am now using Sony Vegas HD Studio 10 and my friend Jenny is letting me take her green screen for a test drive before I purchase one myself. This was my first stab. There are some things I would do differently, but over the next few months I’ll be cranking out some more videos and honing my skills. Honestly, I REALLY enjoy making videos and it’ll be something you see more of from me.

What do you think?

After returning from a camping trip to Shaver Lake this past weekend, I was very happy to find a property tax refund check had come in the mail from Sacramento County. Yes, I appealed my own property taxes in 2008 and they cut me a check to rightfully put money back in my pockets (I’ll get another check for 2009 too). If I had not disputed my property taxes, I would have never seen this refund.

What should I do with the money? Any ideas?

Brainstorming Ideas for how to spend the money:

1. Buy 228 cups of vanilla rooibos herbal tea.
2. Make a dent in the purchase of Sony Vegas Pro.
3. Flipcam.
4. Pick up two used kayaks on Craigslist.
5. Pay for the traffic violation that someone in my household recently earned.
6. Bills.
7. Buy a Micro Portable Loudspeaker Dock for iPod
8. Have glamour headshots taken to start a career as a super model.
9. Easily fund the next camping trip.

If you have any questions about how to reduce your property taxes, let me know. I run a property tax appeal website for the Greater Sacramento Region and I am glad to help you (if it makes good sense for you – if there is money to be saved).

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.

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.