Sacramento Appraisal Blog

Market trends and real estate appraisals for divorce, estate settlement, loans, property tax appeal, pre-listing and more. We cover Sacramento, Placer and Yolo County. We're professional, courteous and timely.

You can’t do a short sale if you’re tall

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We’re seeing more distress in the housing market. It hasn’t been a tidal wave of carnage like the online doom narrative often suggests, but there are changes happening, so let’s talk about underwater mortgages, short sales, and delinquencies. Today, I have some really interesting data that I’ve not shared before, and I hope you get something out of this post. 

UPCOMING SPEAKING GIGS:

7/8/26 NorCal REI Meetup (RSVP here)
7/13/26 LPT Realty Zoom 
8/6/26 PCAR Auburn
8/25/26 Elk Grove MLS Meeting 8:30am
9/1/26 ROG Talks
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH

NOTE: I’m not intending to be mean-spirited about short sales. I’m making a dad joke, which is a play on words. These stats represent people who are struggling. Let’s always remember that.

HOW MANY OWNERS ARE UNDERWATER ON THEIR MORTGAGE? 

Some markets across the country have experienced sharper price declines, so they have 7-10%+ of homes being “underwater” so to speak (home is worth less than the mortgage amount). In most of California, the percentages are very modest around 1% or lower. Nationally, about 1.5% of mortgages are underwater according to ICE Mortgage Technology. Image from ResiClub (click here for an interactive map).

SACRAMENTO MORTGAGES UNDERWATER

Locally, about 0.8% of all mortgages have negative equity according to ICE Mortgage Technology. Here’s a look at how various years contribute to the overall percentage, and it’s not a surprise that homes sold after 2022 are contributing greatly here. Overall, this is very minor, but we are seeing some growth as it was 0.5% in April 2025. Click here to view 100 metros. 

NOT A DISTRESSED MARKET, BUT WE’RE SEEING MORE DISTRESS

A good way to describe the trend is we don’t have a distressed market, but we’re seeing more distress. In other words, we’re no longer at pandemic lows, and we’re starting to see an uptick in delinquencies, foreclosures, and short sales. This is to be expected as we weren’t going to stay low forever. I find the housing doom side of things inflames this growth while the rosy real estate club ignores it. My advice? Take this in, but stay grounded. Stats from HUD. 

FHA IS STRUGGLING MORE THAN OTHER LOAN TYPES

FHA is more delinquent than other types of loans, but it’s important to recognize FHA is about 15% of all loans in the United States. Locally, FHA loans have been about 10% of the regional market lately, though there are some neighborhoods in Sacramento County where FHA is over 30% of all transactions. Stats: MBA. 

IT’S NOT A MARKET OF LOW-PRICED FORECLOSURES

In today’s market, there just aren’t that many distressed sales, so buyers need to adjust expectations. There is strong attention on homes that check all the boxes and low-priced fixers, so it can be surprising how competitive it feels for certain properties. This is where I think there is a disconnect between the actual market and the online narrative. 

WHY ARE FHA BORROWERS DELINQUENT? 

If you work in real estate, know what people are going through and be available to assist some who are carrying too much weight right now. The one category I removed was national emergency since it’s been incredibly minimal in recent time. I made this visual from HUD data.

WHERE HAVE FHA BUYERS PURCHASED?

I thought it would be interesting to look at the top locations for FHA purchases since 2022. This is based on reported financing in MLS. Roseville might surprise some since Placer County doesn’t have too much FHA, but keep in mind Roseville has many more sales than Citrus Heights and Rancho Cordova. So, if I did this as a percentage of FHA sales, Roseville definitely wouldn’t be in the second position. There were over 8,300 single family detached sales in Roseville since 2022, but Citrus Heights and Rancho Cordova only had about 3,000 each. Can you see why Roseville makes this list since it has significantly more sales? For perspective, FHA only represents 6.2% of sales since 2022 in Roseville, but it’s 17.9% of sales in Citrus Heights. Anyway, I hope you dig this list. 

SHORT SALES ARE GROWING

Short sales are not much of a factor in the market today, but it’s something we want to keep on the radar because we are seeing some growth. I do expect to see more short sales ahead since prices have been so flat or down.  The visual below represents January to June every year. I find people either minimize the growth or they zoom in to get sensational. 

BE CAREFUL OF SENSATIONALISM

We could say there were 31% more short sales between 2025 and 2026, and while that’s technically true, we’re only talking about twelve sales. When dealing with small numbers, be careful of sensationalism. Or we could say we’ve seen over 1,500% growth since 2022 in short sales in the Sacramento region. Again, true, but very sensational. I’m not saying this to minimize any growth. All I’m saying is we want to look at both percentage and number change in real estate so we can understand the trend AND credibly convey what is happening. My advice? Be realistic about the stats, cultivate objectivity, and ignore people who inflame real estate stats with sensational percentages based on tiny numbers. These people are likely spinning a narrative, so be careful about getting sucked in. 

HOW IS FHA SPREAD THROUGHOUT THE REGION?

Here’s a breakdown of FHA purchase volume in the Sacramento region since 2022. By far, Sacramento County has the bulk of volume at a whopping 72% of purchases. 

Anyway, I hope that was helpful. Thanks for being here. 

Question: What sort of conversations are you having right now with your sphere about economic carnage, short sales, etc…? What did I miss? Anything else you would add?

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Are appraisers giving bigger condition adjustments in 2026?

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Condition is such a big deal in today’s housing market. It’s not like buyers ignored it in the past, but buyers today are really scrutinizing homes, and they’re going to wait for the right house rather than act out of desperation. Let’s talk about it. 

UPCOMING SPEAKING GIGS:

6/24/26 Windermere Sierra Oaks Q&A
7/1/26 Wisdom Wednesday in Elk Grove
7/13/26 LPT Realty Zoom 
8/6/26 PCAR Auburn
8/25/26 Elk Grove MLS Meeting 8:30am
9/1/26 ROG Talks
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH

BIGGER ADJUSTMENTS FOR CONDITION

I can’t speak for all appraisers, but I find myself making bigger adjustments for condition right now. It’s not that I’ve arbitrarily decided adjustments should be larger in 2026. Nope. What I’m noticing is there is more of a price premium for properties that are dialed-in, and market appeal has shrunk for dated homes. So, the price disparity between a pristine home and a dated one could be larger today than it was in the past. I find buyers are simply paying closer attention to what they are purchasing, and they’re NOT ignoring any defects or issues. 

ARE BUYERS GOING TO WANT TO PAINT THIS HOME?

So much love has been put into this Antelope home that is currently listed for sale, and I appreciate the artistic expression, but it’s also very user-specific. I have to think this isn’t something the market as a whole is going to want because we don’t tend to see stuff like this. So, buyers are likely to be discerning about the cost to paint or cure some user-specific elements. Ultimately, the market gets to decide, and we’ll see what happens. One thing I’ve learned through the years though is it doesn’t matter what the internet or Zillow Gone Wild website thinks. What do actual buyers say? That’s what matters most in the valuation space. 

ADJUSTMENTS CHANGE AS THE MARKET DOES

All I’m saying is adjustments can grow or shrink as the market changes, and condition is having a moment right now, so appraisers should reflect that in their reports. As an example of change, during the pandemic, buyers in general in many locations were willing to pay more for built-in pools compared to previous years since a pool became a bigger asset as people were stuck at home. Of course, the cost of a pool also skyrocketed, and that could have played into buyer behavior also. 

WHAT IS DRIVING THIS HYPERSENSITIVITY?

Buyers are extra-discerning about what they buy since they’re having to fork out so much money for a home right now. This means buyers are likely to pay closer attention to an old HVAC, an aging roof, the cost to paint the interior, and dated flooring. A lack of affordability has bred hypersensitivity among buyers about condition, location, and price. Moreover, buyers are extra picky about getting into contract, and they’ll walk if sellers start playing games. This is one reason why there can be so much quick attention for a home that is dialed in, but a tired home can linger on the market. I think many sellers are doing an okay job pricing today, but there are still many that maybe don’t believe what I’m talking about either. 

NOT DESPERATE LIKE 2021

It’s not that buyers were totally ignoring condition when the market was really aggressive in 2021, but they were much more forgiving about defects and dated elements. They wanted to get into contract to lock in their incredibly low rate, and money was so cheap to borrow, so they just didn’t scrutinize properties as much. Today’s buyers simply aren’t going to overlook older elements as they count the cost of purchasing today, so they’re patient instead of desperate. 

FIXERS ARE HOT THOUGH STILL

All that said, fixers are still a hot commodity for investors as long as they’re priced reasonably. I find fixers under $400,000 in particular can generate quite a few offers. 

CLOSING THOUGHTS ABOUT COMPS

The best comps don’t need adjustments. If you’re trying to figure out what a remodeled home is worth, find some examples of homes with similar remodeling. If you’re looking at a fixer property, find other fixers. If you want to know what a home with a pool is worth, find some homes with pools and let those set the pace for value. I wanted to mention this because in a market with limited comps, sometimes people start comparing homes to recent dissimilar sales, and that can be a big mistake. Remember, it’s okay to use older more similar sales and adjust for how the market has changed. Here are some tips for choosing comps in 2026. And regarding condition, we technically don’t really have to think much about adjustments if we’re looking at other homes that have the same issues. So, I’m currently looking for some comps in South Sac that are completely dated because that’s what the subject property is like. Original roof, original HVAC, original AC, original kitchen, original bathrooms…. The best comps are going to have similar issues. Know what I’m saying?  

CLOSING THOUGHTS FOR SELLERS

One more thing. Sellers, price reasonably and don’t underestimate how important condition is right now. It might help to go to a mortgage calculator to see how much it costs to buy your home (this is why buyers are so sensitive0. You might also consider taking care of cosmetic issues before you list if it’s within your power to do so. And lastly, negotiate with buyers throughout escrow. Be ready for some buyers to offer lower or ask for repairs (or a credit for repairs). This is a market of leaning toward buyers rather than trying to exert power over them. 

Anyway, I hope that was helpful. Thanks for being here. 

Question: Have you been noticing any change with buyer perception about condition? What did I miss? Anything else you would add?

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Buying a private island & prices are now higher than last year

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A private island listed for sale last week in the local market, and it’s getting viral attention, so let’s talk about it. Also, price metrics are now HIGHER than one year ago. What does that mean? Has the housing market started to rebound? Are we so back? Let’s get into it.  

UPCOMING SPEAKING GIGS:

6/24/26 Windermere Sierra Oaks Q&A
7/1/26 Wisdom Wednesday in Elk Grove
7/13/26 LPT Realty Zoom 
7/14/26 Elk Grove Presentation TBD
7/15/26 Stockton Presentation TBD
8/6/26 PCAR Auburn
9/1/26 ROG Talks
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH

TOP 10 REASONS TO BUY AN ISLAND

  1. Bragging rights. “Bro, I own an island.”
  2. Throw a big party (Sacramento Fyre Festival).
  3. Finally, you have privacy.
  4. Become an Instagram island influencer.
  5. Open a drive-through coffee shop for boats.
  6. Move far away from any HOA.
  7. Use the parcel to film season nine of Love Island.
  8. Helicopter landing pad.
  9. Create a vacation destination with Airbnb potential.
  10. Buy and rename the island after your business.

MY ANKLE INJURY

By the way, I injured my ankle last week. I don’t think it’s broken, but if you see me hobbling, it’s from a skateboarding mishap. Here’s a video in case you want to see the moment it happened. Haha.

HERE’S WHAT THE ISLAND LOOKS LIKE

This 5.6-acre island is listed for sale at $39,000, and it is located along the California Delta at 13301 W Eight Mile Rd (Stockton, CA). Do you see any potential here? What would you want to do with it? 

Q&A WITH THE LISTING AGENT

I asked Monte Morris a few questions via text message about his island listing, and here’s what he had to say: 

Ryan: This property has gone viral over the past week. What’s it been like to manage that?

Monte: I called news outlets, and asked them to write articles. Those conversations were with SacBee, SF Gate, and the New York Post’s California arm. As soon as those were published, my phone just started blowing up. This is the third island that I’ve listed, and other news outlets have jumped on board and written their own articles. It’s almost been too much! My phone has been ringing so much that while I’m talking with someone and answering questions, I miss five or six other calls so I can’t keep up with all of it.

Ryan: What advice would you give to anyone wanting to buy an island?

Monte: I would say act fast and do your due diligence. The local authorities are the ones to ask for your specific intended use. This part can be a little frustrating because these agencies don’t move very fast.

Ryan: What type of interest has there been in this one? Who has been interested?

Monte: I’ve had everything from marijuana grows, commercial rentals, marinas, residential, lots of hunting clubs, and everything else you can imagine. You just have to call the appropriate authority like fishing game, planning, or Building, etc.
 
 
CLOSING THOUGHTS: 
 
I think Monte is 100% correct about understanding what you can do with the land, and this rings true whether we’re talking about an island or any parcel. Value hinges on what zoning allows (or will allow maybe). Bottom line. I would recommend not relying on the listed zoning in Tax Records either, which is AG-40. This one little zoning description in Realist may or may not be correct, so get on the phone with the planning / building department and start asking questions to verify zoning and what is possible. If you’re thinking about value, you can try to find some other comps because interesting stuff like this does sell from time to time, but this is a cash purchase, so at the end of the day, ask yourself how much it’s worth to you personally too.
 
 
ARE PRICES REALLY UP FROM ONE YEAR AGO? 
 
Yes, they are. Technically. But the comparison today is starting to get weird because the market peaked early last year, and we’re now starting to compare today’s stats with a dull market in 2025. Ultimately, I wouldn’t get too hyped over this. This is only one month of data, and so much of the price reading comes down to what the market was doing last year, which was peaking early. But don’t get me wrong. Like I talked about in recent weeks, price change has been compressing. What I mean is prices have not been growing more negative lately. 
 
 
LOOK BEYOND JUST THE MEDIAN AND AVERAGE
 
I’ll report on other price indexes from Zillow and Freddie Mac as soon as they become available, and my guess is they’re not going to be up for May, but they won’t likely be down by much either. 
 
 
 
SERIOUSLY, LET’S UNDERSTAND THE COMPARISON
 
Do you see how the green line (2026) ticked up from April to May? That’s not uncommon to see at this time of year as other lines show. But last year in 2025, the blue line went down earlier than expected. So, we’re starting to compare a more normal trend this year with an early peak last year. And this makes a difference in the stats. Many people aren’t going to understand this, but those who watch closely will sound like badass experts. It’s going to be interesting to watch this line in coming months too. 
 

YEAR-OVER-YEAR RECAP IMAGES:

Enjoy recap stats for twelve counties. Please take smaller counties with a grain of salt. Stats can bounce around all over the place, so don’t be rigid about the change from month to month. In fact, I think I’m going to switch some of the smaller areas to quarterly by next month because they’re too chaotic (Nevada, Yuba, Sutter, etc…). 

RECAP DESCRIPTION: 

In most areas, we’re starting to see price metrics are slightly higher than one year ago, and the housing market has been a little more competitive too. Closed sales volume is pretty flat compared to last year, and most areas showed more homes selling above the original list price. In coming months, I expect the stats today will be more competitive as the market got pretty dull last summer. So, be ready for those comparisons. The number of active listings has shrunk a bit in most counties lately, and that’s due to slightly stronger pending volume and sellers starting to back off the market too. Anyway, I’ll keep talking about the market on my socials every day, so let’s keep the conversation going. 

Anyway, I hope that was helpful. Thanks for being here. 

Question: Would you ever buy a private island? What do you think of the island above? And anything else to add about price stats right now?

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Shrinking housing supply & stop obsessing over rates

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The big news lately is housing supply has been shrinking. Some of this is due to more buyers in the game right now, but we’re also seeing sellers step back from listing homes. Some new visuals today as well as thoughts on wasting energy on obsessing over lower rates.

This post is designed to skim quickly by topic or digest slowly. 

UPCOMING SPEAKING GIGS:

6/24/26 Windermere Sierra Oaks Q&A
7/1/26 Wisdom Wednesday in Elk Grove
7/13/26 LPT Realty Zoom 
7/14/26 Elk Grove Presentation TBD
7/15/26 Stockton Presentation TBD
8/6/26 PCAR Auburn
9/1/26 TBA
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH

THE LOWEST & HIGHEST PRICES IN 2026

Where are buyers purchasing? Here are the top areas in 2026 so far at the lowest and highest prices in the Sacramento region. Let me know if you like these visuals. I thought it would be cool to show things this way. 

SELLERS HAVE BEEN SHRINKING BACK LATELY

This is big news. It looks like increased uncertainty this year is starting to affect seller behavior. Think Iran War and inflation. What I mean is sellers have started to not list homes as much in 2026. This was a problem last year where sellers really stepped back during the second half of 2025. Yet, sellers started coming back to the market, and that’s why we saw five months in a row of finally being back above 2024 levels of new listings. But then May 2026 sunk back below 2024 levels again (doh!!!). This isn’t a drastic change, but I think it’s been enough to make the housing market feel a little tighter since there isn’t as much supply out there. Frankly, this is a step in the wrong direction for affordability. If we want the housing market to heal, we need more listings. 

Here’s a different way to look at it. The low point of seller activity was 2023, and we’ve improved since then, but sellers backed off in mid-2025, and both April and May 2026 have been lackluster. The longer these lines remain subdued, the longer the housing market feels stuck. 

GIVING UP LOW RATES

It feels like sellers will never give up a low rate, and some won’t, but we’re starting to see more owners list their homes despite a low rate. About 15% of all current local listings have sold previously on MLS between 2020 and 2025, and there are definitely some low rates mixed in there. 

NOT AS MANY OPTIONS FOR BUYERS

Sellers aren’t flooding the market. That’s often the narrative online, but here we are with sellers actually pulling back a little. The number of active listings is down 6% from year ago, so there aren’t technically as many options for buyers. Yet, part of this number being lower is about more buyers getting into contract (more on that below). 

HIGHER BUYER DEMAND DESPITE RATE HIKES

Some good news here. Mortgage rates went from 6% in January to above 6.5% lately, but it hasn’t really phased buyers. I’m not saying this uptick is not meaningful, but we’ve had more pending contracts in recent months despite rates rising. This is why we’ve had slightly higher closed sales volume so far. It’s only slightly more volume, but that’s on brand for 2026. The goal is to see the housing market a little less stuck. 

WASTING TIME & ENERGY ON RATES

Think about all the attention spent on rates increasing since January and how that could squash buyer demand. Yet, here we are with a little more buyer volume nationally and locally despite the uptick. I’m not saying rates don’t matter because they do, but if you work in real estate, maybe focus your attention on building relationships with people rather than obsessing over daily rate changes. Backing up, the message over the past four years has been that rates would be coming down soon. Trust me bro. But here we are with rates that are still pretty similar to what they were four years ago. At some point, I guess we need to recognize all this worry and attention spent on rates hasn’t made much of a difference. There is a lesson in there.

One more thing. It’s really difficult to accurately predict mortgage rates. Almost nobody gets it right. This doesn’t mean I don’t want to hear what people think. Loan officer friends in particular, I want to hear your take, so please keep sharing. Let’s just concede that predicting rates isn’t so easy since there are so many moving parts. And let’s be real that some real estate professionals get sucked into a narrative that fixates on rates, and that can be limiting. 

A LITTLE MORE DISTRESS IS THE VIBE

In most local counties, I’m seeing a slight bump in short sales. Here’s something from a presentation last week in Solano County. Ultimately, we don’t have a distressed housing market, but we are seeing a little more distress. And we should expect to see more distress ahead since we’ve bottomed out after the pandemic and we’re seeing an increase in mortgage delinquencies. A big issue here is prices have been pretty flat for years, so if someone bought 4-5 years ago, it’s possible there hasn’t been much growth (or maybe it’s worth less). This is where low-down FHA and VA borrowers are more prone to have to do a short sale. 

NOTE: I find people either minimize the growth since it’s nothing compared to what it used to be like, or they get sensational and say short sales increased 900% since 2024 (don’t do that). My advice? Let’s just recognize a little growth and keep things in context. 

“I’M NOT SEEING THE EXTRA VOLUME AT ALL”

I had a great conversation recently from someone who said she just wasn’t seeing all this extra volume I’ve been talking about, and others have felt the same too. Well, I’ve only ever mentioned that we have a little extra, so let’s be clear about that. To date, volume has been 2% better this year. Here’s a good way to think about it. If someone gained or lost 2% of their weight, would you notice? Probably not. It’s similar with the housing market. Yet, just because you don’t notice doesn’t mean it hasn’t happened. This is where we want to be careful to see the forest through the trees. Sometimes our subjective experience gets in the way of seeing the trend. 

WHERE IS THE EXTRA VOLUME?

We’ve seen about 2% more closed sales volume this year in the four-county region, and Sacramento County has been the culprit for the most change so far. Moreover, it’s extra buyers between $400K to $500K as the largest category of growth. It’s honestly too early to pull closed stats for May, and the numbers will look a little better next week when I finalize the stats.

More at the bottom. And a little more at the top. Preliminary stats for May.

Anyway, I hope that was helpful. Thanks for being here. 

Question: What are you hearing from buyers and sellers right now? Have you felt the market tighten in recent months? 

If you liked this post, subscribe by email (or RSS). Thanks for being here.

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