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Comparing Four Months of Unemployment Rates in Sacramento County: May-August 2009

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022008ins 009aWhat’s been happening with Sacramento County unemployment rates over the past several months? Below are the most recent figures for unemployment during the most recent four months per the Employment Development Department. The rates encompass both cities and Census Designated Places (CDP) in Sacramento County from May through August 2009. Data for September 2009 has not yet been released (wait about two more weeks for that). 

As of August 2009, Sacramento County as a whole has an unemployment rate of 12.3% ( July was 12.0%, June was 11.6% and May was 11.1%). What do you notice about the data below? Does anything stand out to you or surprise you?

Arden Arcade CDP  11.9%  (July 11.7%, June 11.4%, May 10.8%)

Carmichael CDP  9.1%  ( July 8.9%, June 8.7%, May was 8.2%)

Citrus Heights city  8.6%  (July 8.5%  June 8.3%, May 7.8%)

Elk Grove CDP  10.0%  (July 9.8%, June 9.6%, May 9.0%)

Fair Oaks CDP  6.8%  (July 6.7% , June 6.6%, May 6.2%)

Florin CDP  18.2%  (July 17.9  June 17.6%, May 16.7%)

Folsom city  5.6%  (July 5.5%, June 5.4%, May 5.1%)

Foothill Farms CDP  15.6%  (July 15.3%, June 15.0%, May 14.2%)

Galt city  18.4%  (July 18.1% , June 17.8%, May 16.9%)

Gold River CDP  2.1%  (July 2.0%, June 2.0%, May 1.9%)

Isleton city  13.2%  (July 12.9%, June 12.5%, May 11.8%)

La Riviera CDP  6.7%  (July 6.6%, June 6.5%, (May 6.1%)

Laguna CDP  6.4%  (July 6.2%, June 6.1%, May 5.8%)

Laguna West Lakeside CDP  8.3%  (July 8.1%, June 8.0%, May 7.5%)

North Highlands CDP  18.0%  (July 17.6%, June 17.3%, May 16.4%)

Orangevale CDP  8.8%  (July 8.6%, June 8.5%, May 8.0%)

Parkway South Sacramento CDP  20.4%  (July 20.0%, June 19.7%, May 18.7%)

Rancho Cordova City  14.0%  (July 13.8%, June 13.5%, May 12.8%)

Rancho Murieta CDP  3.8%  (July 3.7%, June 3.7%, May 3.5%)

Rio Linda CDP  17.8%  (July 17.5%, June 17.2%, May 16.3%)

Rosemont CDP  9.7%  (July 9.5%, June 9.3%, May 8.8%)

Sacramento city  14.3%  (July 14.1%, June 13.8%, May 13.1%)

Vineyard CDP  5.7%  (July 5.6%, June 5.5%, May 5.2%)

Walnut Grove CDP  26.5%  (July 26.2%, June 25.6%, May 24.5%)

Wilton CDP  7.5%  (July 7.4% , June 7.2%, May 6.8%)

Every single category above, whether city or CDP, saw an increase in unemployment from July 2009 to August 2009. If there was a prize for lowest unemployment rate in Sacramento County, Gold River would be the winner at 2.1%. On the other end of the spectrum, Walnut Grove has the highest unemployment rate in Sacramento County at 26.5%.

Let me know if you have any questions about the latest figures. You are welcome to call 916-595-3735 or visit our company website at www.lundquistcompany.com

www.SacramentoAppraisalBlog.com Comparing Four Months of Unemployment Rates in Sacramento County: May-August 2009

Appraising Fixer-Type Properties

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It’s always interesting to appraise properties with big condition issues. There are so many factors to consider and look for, but often properties in “poor” condition (as opposed to “fair” or “good”) include some of the following: severe neglect over the years for whatever reason, additions without permit (usually with shoddy workmanship), unfinished remodeling, water or moisture damage of some sort, debris throughout the site, wood decay, or some other obvious failure such as a caved roof or sagging foundation.

fixer-property-lundquist-appraisal

Appraising a “fixer” is similar to any other valuation in that it’s necessary to find comparable properties with the same or similar condition issues. In some areas that is easier to do than others. For example, a 2-bedroom cottage “fixer” is usually not hard to come by as a comp in the 95817 zip code of Sacramento, but a 2-story 3500 square foot ten year old Roseville ”fixer” is a little more challenging. When a house is only a decade old, it’s usually not already in the “fixer” category, right? But imagine if a property was heading toward foreclosure, and the owner (or a vandal) turned on all faucets and stopped up the drains for four days before anyone found out about the problem. Do you think there might be some serious damage throughout the house? Yes indeed. I appraised a property like this within the past year in a different city and it was definitely an interesting valuation situation because there weren’t any other “fixers” with water damage (or similar damage) in the subdivision where the subject property was located. That made things a bit interesting for me to say the least.

Usually “fixer” properties in “poor” condition are attractive to investors instead of first-time home buyers. Investors have two things that many first-time home buyers do not have: 1) Cash to purchase the property outright or cash to cover a significant portion well beyond 20% down. ”Fixers” often do not qualify for conventional financing, so they tend to sell on the lower end of the market where cash reigns supreme; 2) Investors also have cash to fix the property and rent it out or re-sell it on the market in “average” or “good” condition.

www.SacramentoAppraisalBlog.com Appraising Fixer-Type Properties

Photos from the Field: Oak Park Vacant “Starbucks Building”

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I inspected a property in Oak Park yesterday, and while on the road I snapped a shot of the now vacant “Starbucks building” on Broadway. It’s been just about two weeks since the Oak Park Starbucks shut its doors. I know it can be popular in some circles to hate Starbucks, but this one felt a little different because it was connected to an exciting commercial renovation project for the community. Now it’s just another vacant building, one among many, in the current real estate market.

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Businesses starting and failing is a part of the cycle of capitalism, and that’s just life, but let’s hope for great things for the next company that moves in on this corner. If you are familiar with this project, how does the image above strike you? Does it make you sad? Or are you full of optimism for what is next? Feel free to comment above.

www.SacramentoAppraialBlog.com Photos from the Field: Oak Park Vacant “Starbucks Building”

A Look at Home Sales & Unemployment in Rancho Cordova

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I thought it would be interesting to take a look at Rancho Cordova sales over the past several years and simulataneously check out unemployment rates during that same time period. Is there a relationship between unemployment and the value of real estate? Generally speaking, the higher the unemployment rate, there is a good chance of lower home prices because the probability of buyers being able to purchase houses at higher prices decreases.

The trend graph below records all single family detached sales in the city of Rancho Cordova through Sacramento Area Metrolist. The unemployment figures are based on data provided by EDD. What do you see in the graph? Does anything stand out to you or surprise you about the sales (blue dots) or listed unemployment rate?

Rancho Cordova Sales and Unemployment Rates September 2006 to September 2009

Below is a view of the past 12 months of sales. As can be seen, the unemployment rate has risen sharply over the past year. It looks like overall the top of the market has seen a decline in property values. At first glance, when viewing a graph like this, it’s easy to gloss over the details, but when looking closely, it’s clear that there are less sales at higher levels over the past months, aren’t there? More specifically, there are few sales above the $400,000 level over the past 180 days.

Rancho Cordova Sales September 2009 and Unemployment Rate by Lundquist Appraisal Company

I don’t want to be misleading in any way by indicating that unemployment is the sole determining factor for property values. That’s not what I am saying. I think there is a relationship between unemployment and the housing market, but that unemployment is only one of the factors involved. This point is illustrated perfectly by a current phenomenon in many sub-markets in the Sacramento Region. Bidding wars, multiple offers, and higher prices have become more commonplace for certain price levels. Despite unemployment rising, the lower supply of housing inventory over the past months has really helped to fuel this phenomenon because there has been more willing buyers than available houses (and prices are very attractive too because of how far they have come down from several years ago). Other factors to consider that may impact the real estate market are supply and demand, governmental regulations, interest rates, consumer confidence in the economy, etc…

Please let me know if you have any questions. You can call me at 916-595-3735 or contact me at ryan@lundquistcompany.com.

www.SacramentoAppraisalBlog.com A Look at Home Sales & Unemployment in Rancho Cordova

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