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Triplex

Are first-time buyers targeting 2-4 unit properties?

February 2, 2021 By Ryan Lundquist 5 Comments

There’s no inventory. It’s just incredibly sparse out there. So are buyers starting to look more to 2-4 unit properties since they are struggling to get into contract with single family homes? Well, maybe so. Let me share some visuals. If you’re not local, what’s happening in your market?

FIVE THINGS TO KNOW ABOUT THE 2-4 UNIT MARKET

1) First-time buyers are pulling the trigger: Last year more first-time buyers purchased two to four units compared to previous years in the Sacramento region. Both FHA and VA loans have seen an uptick and are essentially at their highest level in recent years. Keep in mind FHA has actually been declining as a loan type in the single family market, so it’s interesting to see this uptick among multi-units. We need more time to fully understand this trend, but this could very well be an example of buyers looking to other types of properties since the single family market is struggling so heavily with few listings to purchase. 

2) Prices have increased: Here is a look at the annual median price over 18 years. The trend for multi-units follows the single family market closely as there was a huge increase, a bubble burst, and we’re now in our tenth year of price growth (with the current nominal price having surpassed 2005 prices).

3) Volume isn’t what it used to be: Just like the single family market, we’re seeing fewer sales today from the previous market height between 2003 to 2005. Moreover, last year there were 10.9% fewer multi-unit sales in the region. When the pandemic started investors pumped the brakes, but the second half of the year was much stronger. 

4) Types of financing: Here is a deeper look at the type of financing involved in two to four unit sales. In recent years conventional has been dominant and cash has been declining. This is the same trend we’re seeing in the single family market because it’s just so cheap to borrow money. Look at FHA and VA though showing an uptick overall, which is telling of a growing appetite among many first-time buyers for multi-units.

5) X-factors to consider: One thing to consider while pulling comps these days is whether tenants are paying full rent in light of an eviction moratorium in place in California. The reality is some investors may expect a price discount in light of rent not being paid. Also, it’s important to keep watching to see any effects of rent control since we’ve now had one year of rent control under our belts.

I hope that was interesting or helpful.

Questions: What are you hearing from first-time buyers? What are you seeing in the 2-4 unit market? I’d love to hear your take.

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Filed Under: Market Trends Tagged With: 2-4 unit market, Appraisal, Appraiser, cash buyers, conventional buyers, Duplex, FHA, first-time buyer duplex, Fourplex, greater sacramento housing blog, rising duplex prices, Sacramento Appraisal Blog, Triplex, VA

Interview: The 2-4 unit real estate income market in Sacramento

April 4, 2011 By Ryan Lundquist 6 Comments

Part 2 of 3: I sat down recently with Sacramento real estate broker Joel Wright to discuss the 2-4 unit residential-income market in Sacramento. Joel specializes in working with investors and he knows his stuff. We hit on topics such as prices, inventory, rent levels and current trends with duplexes and fourplexes in the Sacramento area. Let me know if you have any questions and check out The Wright Report also for a very detailed analysis of the local market. View Part 1 of this interview series here and watch the new segment below.

Here is a graph of all duplex and fourplex sales in Sacramento County over the past three years. What do you see? Does anything stand out to you?

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.

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Filed Under: Market Trends, Resources, Videos Tagged With: 2-4 income properties, appraisal service in Sacramento, appraiser in Sacramento, cash flow, Duplex, Fourplex, investment properties, investment trends in Sacramento, investors in Sacramento, Lundquist Appraisal Company, market analysis, rent level in Sacramento, Sacramento Investment Market, Sacramento Real Estate Appraisal, Sacramento Real Estate Appraiser, Short Sale, Trend Graph of Multi-Unit Sales in Sacramento, Triplex, Wright Real Estate

Unpacking the real estate market in Sacramento: The Wright Report

March 7, 2011 By Ryan Lundquist Leave a Comment

If you want to understand the real estate market in Sacramento, check out The Wright Report. I am not aware of any other report in the area that is so comprehensive. The Wright Report is birthed quarterly by Real Estate Broker Joel Wright. The latest version is packed full of graphs and details to help the reader understand exactly what went on during the last quarter of 2010 in Sacramento’s four county region (Sacramento, Placer, Yolo, El Dorado). This is helpful for local agents, residents and anyone considering investing in the Sacramento region. I recommend downloading and printing the document since it is over 40 pages.

I’m honored to have contributed a few paragraphs at the beginning of the report too. Check it out below or see a full screen view or direct link).

What do you think?

 

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.

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Filed Under: Market Trends, Resources Tagged With: appraiser in Sacramento, appraisers in Sacramento, data and graphs, Duplex, Fourplex, Investment properties in Sacramento, Investment Sacramento, Joel Wright, Joel Wright Real Estate Broker, Lundquist Appraisal Company, multi-unit real estate market in Sacramento Region, residential-income market, Sacraemento Investor, sacramento appraisers, Sacramento Real Estate Appraiser, Sacramento Real Estate Market, Triplex, understanding real estate in Sacramento Placer Yolo El Dorado Counties, Wright Real Estate Sacramento

A triplex, the housing boom, and foreclosure twice

October 6, 2010 By Ryan Lundquist 5 Comments

While appraising a triplex in Sacramento I came across an interesting property history of another nearby triplex in the “Gardenland” area of Sacramento in the 95833 zip code. As you can see below, this property has changed hands quite a bit in the past five years, and it has gone into foreclosure twice too. This is actually a fairly common phenomenon because investors and first-time buyers purchased properties several years ago when property values had already come down since 2005, but then the economy took a turn for the worse. Property values decreased even more and unemployment increased dramatically also.

Sales History of a Triplex Property:

10/01/2010  $117,500 (sold on MLS as bank-owned)
08/11/2010  $60,376 (foreclosure transfer)
02/28/2008  $180,000 (sold on MLS as bank-owned)
07/25/2007  $306,000 (foreclosure transfer)
06/22/2006  $399,000 (sale – not on MLS)
05/27/2005  $360,000 (sale – not on MLS)

It’s remarkable to think this triplex once sold at $399,000 and yet closed days ago for $117,500. This property seems to tell the story of the housing bust and current economy, huh? What do you see?

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Filed Under: Market Trends Tagged With: 95833 zip code, Bank-Owned Property, bubble burst, Foreclosure, Gardenland neighborhood, Home Appraiser, housing bust, Lundquist Appraisal Company, multi-unit property, Real Estate Appraisal, REO, Sacramento, Triplex

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