One of the intriguing parts of appraising is visualizing data through making graphs. I know that might sound really dull to some, but I actually get a kick out of it. Here are some recent graphs I’ve made during the appraisal process. I hope they help give a window into a few neighborhoods in the Sacramento area.
This is the Del Paso Heights area of Sacramento for all properties with two houses on one lot. A quick rise, very sharp decline and current lower prices around $100,000 all stand out to me.
It’s astounding to think 67% of all sales in the 95824 zip code have been cash sales over the past two years. What will be the impact to rents in the area over time with so many new rentals? Do you think they’ll increase or decrease?
It’s easy to see many sales in “The Ranch” in Wilton have hovered around $500,000. Some of these are distressed, so they sold lower than they could have, but minus one sale at $700,000, there has been very little activity above $600,000. Property values have obviously seen a huge decline since this JTS neighborhood was built, but that’s how most of Sacramento looks. Current values are easily about 50% of what they were during the peak in most neighborhoods.
Last but not least, here are sales in the Madrone condominium complex in the Empire Ranch area of Folsom.
I hope this was helpful to maybe give you some context into a few different areas of the Sacramento market. Do you have any questions or further insight about these neighborhoods? I’d love to hear from you in the comments below.
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The Del Paso Heights graph really stands out. It’s a perfect representation of the real estate market before, during and after the bubble. The Ranch in Wilton graph reflects this as well, although not to such a dramatic degree.
Thanks Alex. I appreciate your feedback. It’s amazing how some graphs end up looking like a mountain due to an increase, peak and then decline. It’ll be curious to see how things unfold this year.
Ryan, I’m an RE graph nerd too. Well laid out post. I’m sure your nerdy habits translate to great service for your clients.
Keep it up!
Good to hear, George. I’m glad we’re in the same camp. It sure does help clients visualize the market. For instance, I recently appraised a property that was VASTLY overpriced as a private sale. The graphs I used in my report though made it painfully obvious where true value was though. It really can help clients. Best wishes on your listings. I see you’re in The OC (I’m down there about one month each year visiting family).
One note on the purchases by investor groups: many of these had been purchased by investors in the first place, and then went into foreclosure when the market crashed. (That’s why 40% of the foreclosures over the last few years were tenant-occupied.) John Gilderbloom at the University of Louisville did an interesting piece on foreclosures in predominantly African-American neighborhoods, and found that many of those facing foreclosure were investors from the suburbs. This meant, of course, that the residents bore the brunt of the foreclosure crisis. The article on the study is here http://www.huffingtonpost.com/john-i-gilderbloom/white-speculators-black-a_b_956662.html
Thank you for the link. I’ll check that out. You’re right that investors in lower-income areas rarely live in the neighborhood. They’re in the ‘burbs as you say. It’s a sad dynamic, though there are also some good investors who do take care of their properties and honor their tenants.