The Maloof family is still making headlines in Sacramento. I read in last week’s Sacramento Business Journal that Gavin Maloof, one of the former owners of the Sacramento Kings, recently sold his property in the Westlake neighborhood of Natomas for $1,112,500. I wanted to give some further market context to the sale, which I thought would be interesting to locals.
Measuring by Pro Sports Standards: The Maloof property is definitely on the larger side. It comes in at 5203 square feet according to public records, which is a bit larger than an NBA basketball court at 4700 square feet (94′ x 50′). Technically if this home was measured in basketball courts it would be 1.10 courts. By the way, it sounds better to use basketball court figures for measurement since this house would be 110% of a basketball court, but only 9% of an NFL field or 64% of an MLB baseball diamond.
Neighborhood Market Trends: As you can see, the Maloof property sold quite a bit above others in the neighborhood. However, there are definitely a few things to keep in mind. First of all, this graph only includes properties that sold on MLS, which means private transactions and sales directly from the builder are excluded. For instance, the Maloof home was purchased originally in 2002 directly from JTS for $1,008,000. Obviously it was one of the premium homes at the time since it sold far above others. Secondly, property values are easily somewhere in the 2002 range right now in this neighborhood and in most areas of Sacramento (sometimes we see 2003 levels, but most areas are still hovering somewhere around 2002 levels). I am not saying this house sold at market value for its most recent sale, but only that buyers have been willing to pay 2002-ish levels for many houses in Sacramento. Ultimately I’m not terribly surprised to see a higher sale for a custom home in The Shores at Westlake.
In case you are not aware, the Westlake neighborhood is located literally 2.5 miles from the arena. There are definitely multi-million dollar properties in the surrounding Sacramento area, where some of the other Kings players live (and I imagine a Maloof could have afforded), but nothing in a gated community as close to the arena as this neighborhood.
Property Taxes for the Maloof Home: What do you notice about the property tax history for the Maloof home in Natomas? Interestingly enough, it looks like property taxes saw an increase through 2008 despite the market showing a clear decline – especially from 2006 to 2008. Also, you may have heard property taxes can only increase by 2% each year, so why were there increases far above that level on this house? Here is how it works. The Assessor can only inflate taxes by basically 2% each year under normal circumstances, but for property owners who had previously received a reduction in assessed value under Proposition 8 (this is the tax Prop 8 – not the marriage Prop 8), their property taxes can be raised any amount each year so long as it is not increased above the original “base-year value” (also called the “Prop 13 value” – which is usually the original purchase price from years ago). Does that make sense?
By the way, these figures are all a matter of public record. Check out Zillow to get the past 9 years of taxation or the Assessor’s website for the past 2 years. If it’s relevant, you can read more here about how property taxes work in Sacramento.
I hope this was as interesting. Any questions, thoughts or insight?
Question: Would you pay a premium to own a house previously owned by a celebrity?
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Sure, $1.1 million might seem high for a home on a floodplain, former ag land that was valued at $6000 an acre not all that long ago. But let’s see, the City Council “forgot” it was a floodplain, and we voted to annex north natomas because it was going to be a walkable community (just like downtown!). So they built the gated Westlake and surrounded it with zero lot homes that would foSurerce our lazy kids to play in the streets just like in famous Brooklyn,New York. Dangerous? Perhaps, but character building. Then Sacramento zoned two shopping centers and two complexes of box stores — well there’s your “walkable”, once you’ve parked.
So the old Maloof place migth seem pricey unless you were at the America’s cup yesterday to watch the 50 to 100 illion dollar floating, carbon fiber laptops race amid the private yachts worth at least twice as much as the boatrace toys of the silicon valley warlords, and suddenly you realize that 1.1 million for a shack in the sticks and located between Sacramento intergallactic airport and your basketball team at Arco-Sleeptrain-Ex-Lax Arena
is probably a bargain.
Ricardo
Thanks Ricardo. The new owner is definitely going to be paying flood insurance until the levy issue is worked out. There would have been so many more houses built in Natomas over the past few years had flood zoning not essentially stopped construction.
One more thing. The America’s Cup races sure are a different world. You can just feel the money when watching.