If you’ve ever wanted to buy an island to feel like a king or queen, here’s your chance. This just might be perfect for social distancing too, right?
I wanted to start out on a light note today because news has been so heavy lately. Anyway, this 18-acre parcel is located in Stockton, CA and it’s listed for sale at $40,000. I’m guessing it’s going to get bid up, but we’ll see. The listing says the zoning is AG40 and you can use it for boating, camping, fishing, etc… Photos shared with permission by Realtor Monte Morris. WATCH video here.
I jokingly verbally offered $500 for this island, but I was laughed off. Haha.
Quick advice about land: If you ever do buy a big (or small) chunk of land, be sure you call the city or county to verify what zoning allows for the particular parcel. What can you do with it? Or in real estate terms, what is the highest and best use? I would definitely not rely on the zoning listed in Tax Records either as that might not be correct. I would 100% find out details such as allowable uses, whether it is buildable, how often it is underwater, etc…
Okay, now to market stuff.
Uncertainty in 2020: I put out a new video called Uncertainty in Real Estate to talk through recent trends and all the uncertainty we’re feeling right now. I unpack where we’ve been in 2020 and some of the things to consider right now during the COVID-19 pandemic. It’s about 30 minutes, so maybe listen in the background while working (or self-quarantining). Start the video at 12:00 if you want to get to more focused pandemic thoughts.
A new pending visual: Here is a new graph I’m going to be updating as often as I can. Do you like it? This visual only goes through the 12th of March so it doesn’t capture this past weekend yet. My sense is we need to wait about a week or maybe more until all data are present before trying to see the trend. Otherwise if we post too soon it can actually be misleading.
The market is still alive: Over the past weekend we saw strong pendings in the Sacramento Region. Pendings were just about the same as the previous weekend, but down slightly. I heard lots of stories about multiple offers too and technically 55% of all pendings had more than one offer according to MLS stats. As of today MLS shows 192 pending sales in the region compared to 210 the previous weekend. When I made this graph yesterday MLS showed 178 pendings, but I didn’t feel like updating this chart again. Yeah, call me lazy. For now pending sales have been higher in 2020 compared to last year, but the x-factor is what happens from this point forward.
UPDATED:
SPIKE IN CANCELLED LISTINGS: I just ran cancellations and it looks like there has been a spike in recent days. This is something to watch. Keep in mind some sellers will absolutely be taking their homes off the market. Some won’t. I wouldn’t make this the primary data point for what the market is doing, but it is a telling factor. Stay tuned. I’ll have more visuals soon. Per MLS “Cancellation of a listing means that the listing agreement is cancelled”. 3:00pm 3/18/2020
SPIKE IN HOLD STATUS: There has been a huge spike in properties on “hold” in MLS. This status basically means homes are removed from the market and they can be placed back Per MLS “Hold means that the listing contract is still valid, but the seller has requested that the marketing be temporarily suspended.” 3:45pm 3/18/2020
I hope that was interesting or helpful.
Questions: Would you buy this island? What are you seeing out there in the market right now?
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Great information and video Ryan. In the side of my business that offers services that help agents prepare for listings, coming into Monday we were booking over two weeks out. In the last two days, we have cancelled more orders than we have received. I hope this does not continue for long for the sake of everyone’s lives and livelihood.
Hi Gary. Thank you for pitching in. Yeah, I’m in a similar boat. I’ve cancelled all my work this week. Though I’m talking clients into adjusting the scope of work. I almost wrote about that this week and I may do so next week. Today I had a client take photos of the interior of a house and I’m doing Facetime with another client this week to “inspect” the interior. These are for private appraisals, but I really think lenders and AMCs need to get up to speed with different products right now. Here is a memo from Citi though that another appraiser shared with me. I appreciate the direction they are going and how they are adapting right now. https://twitter.com/SacAppraiser/status/1239735743674593281/photo/1
Okay Ryan try this on for size. While I still recover from surgery, I have spoken with now three appraisers who have been involved with purchase transactions where the borrowers walked from the contract. One lost his deposit, the other two walked during their due diligence. Now three ain’t a very good sample size, but this could lead to an interesting trend. Now also I realize that the borrower could have been running from something else, but I found it interesting that three different appraisers, two in my county and one in San Diego had this happen. That will need to be looked at. I plan on calling some agents and seeing what they have seen or heard. So I would look at pending trend as you mentioned but then what about this little issue. If true will it pass in a week or two??? Oh what joy it is to be an appraiser. Just got to love it. Course right now I guess I don’t have to worry about seeing borrowers, I guess my surgery was well planned. my wife is beating on me to stay locked up. That ain’t happening. Thanks for the great post. As always you do a great job.
Hi Brad. I’m so glad your surgery went well. I would tell you to rest, but I struggle with sitting still myself, so I’d be a hypocrite to tell you to chill out. Haha. Seriously though, I’m grateful to hear from you.
I have heard similar stories from agents, though I’d say for now they don’t typify the market in Sacramento at least. One buyer I heard of did cancel after his employer sent a notice of pending layoffs and I suspect we’ll see more of that in light of so many businesses suffering.
Hi Ryan,
That is great advice you gave about double-checking the zoning allowances before purchasing land. I think most people may just rely on tax records like you said but I can see the value in being sure. Great advice. I plan to buy land in the future after the market crashes and will keep your advice in mind.
Also, I had to chuckle at your last sentence in the paragraph in which you said to check “how often it is underwater”. I think that in regards to that Island listing you posted, that can be taken in a literal sense as well as the context you probably meant. With all this talk of climate change, I wouldn’t be surprised if that Stockton Island is actually (literally) underwater quite often. 😉
Thank you Brandon. I’m so glad you mentioned that. I see this mistake all the time where someone will say, “Zoning says…” based on Realist. That is definitely not the official source and zoning could be far different. Man, climate change and viruses… Intense topics these days. 🙂
Hi Ryan,
I truly enjoyed the message on land and making sure you check the number of times it’s been underwater…
Also, the video was very enlightening and I am grateful for the information. It was direct, concise and made me feel great about the market and where we may be going. I have heard a couple of stories here in my area where the buyer has backed out due to the coronavirus and the potential impact on their finances. However, not many which in my humble opinion is a good sign.
Thanks again for always being on top of the market and supplying great information.
With gratitude always,
Thank you so much Geanne. I appreciate your commentary. We are just at the beginning. It’s going to be interesting to see where things go. I think as cities and areas go on lockdown, that can be a huge difference-maker too.
I have some more things on my mind to share and I’ll do another video soon (it won’t be 30 minutes though).
I have also heard of buyers backing out, but so far those stories don’t seem to typify the market.
Please keep me posted with what you are seeing and let’s keep watching…
You brought me up to date with an experts point of view. Thank You
Thank you Johnny. I appreciate it. Let’s stay in touch and please reach out any time.
For any onlookers, I’m normally very close to the real estate community, but I’m listening especially close right now. Keep me posted with what you are seeing in escrows and what you are hearing from buyers and sellers. The stories of today become the stats of tomorrow.
Thank you Ryan. Great valuable information. I am looking forward to your next week’s blog.
We had our first virtual office meeting today at KW Roseville. Someone asked if it was hard finding an appraiser to appraise a property right now. I saw your comment on how you are doing your appointments at the moment.
Stay safe
Thanks Lourdes. I appreciate the kind words. I’m glad your office is going digital too. I was actually scheduled to speak there very soon but cancelled in light of everything happening. We have something on the books again for August though now.
I may address appraisal stuff next week since that seems to be on people’s minds. Some lenders are starting to come around and changing things up to have appraisers focus on desktop valuations or drive-bys. I hope that catches fire in a major way this week. I loathe how some AMCs (Appraisal Management Companies) are carelessly asking appraisers to enter homes. I find it ironic that they ask appraisers to identify health and safety issues in their reports but simultaneously have little care about exposing appraisers to actual health issues right now.
Anyway, keep me posted with what you are seeing out there. Thanks for any insight.
Thank Ryan, great video with many valuable and viable components; well worth my time in viewing!!
Lulu Silva-Manuel
American Heritage Real Estate Professionals, Inc.
El Dorado County
Thank you very much Lulu. I appreciate it.
Ryan, reading your posts always feels like insider info (or at least the straight dope)…you’re the Snopes of RE. We’re looking to sell our house and put a deposit on a townhome in a small development being built – just got sent the Purchase Agreement, meaning we’d lock-in on the price. I don’t want to be “that guy” who plays into the panic – BUT… it might be ready in Fall or…2021? If it was built we’d do the deal tomorrow because our house is an easy sell…but locking in at their price and contingent on us selling at some point in the future feels crazy. Any Magic 8-Ball wisdom?
Hi Tommy. Thanks for the kind words. Ha, I’ve never heard Snopes. That’s funny.
It’s so hard because there is so much uncertainty right now in the market and we are simply at a place where we’re not sure what will happen in the future on multiple levels. Here we are going on lockdown in Sacramento County soon too. Of course we might have some pent-up demand in early April after this finishes, but it’s hard to predict the future.
I guess if you are concerned I would recommend reading the contract closely just to be sure about the market. That way you can know what you would lose if you decide to back out. So if a buyer was in a situation where the market declined significantly and it was only a matter of losing a $2K deposit, then so be it. But if you have to fund the loan before this happens that’s a different story because then you are more invested. What do you need to put down to make this happen?
Thanks for the response Ryan. We put a $5000 deposit and now it’s 50% down on all options/upgrades. So we could easily be in $20k and can’t sell until we have a real finish date for move-in…and that could change at a moments notice if one construction worker gets quarantined. Not worried about selling our house (it’s below $400k and nothing WAS lasting more than 2 weeks in Arden Arcade) – but locking in feels….ugly.
I hear you Tommy. Hang in there and let me know if you have pointed questions. You are welcome to email me also.