Sacramento Appraisal Blog

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Cash feast update in Sac, Placer & Yolo County

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Here are the latest stats for cash purchases in Sacramento, Placer & Yolo County. When considering all price levels in 2012, there has been a huge increase in cash in Sacramento, but only a moderate uptick in Yolo County and no real increase in Placer County. Sales under the $200,000 level, however, have seen an increase in all counties (though Sacramento is much higher than Placer and Yolo).

One hedge fund bought 7.5% of the market: If you’re following hedge fund activity in the market, it’s interesting to note THR California LLC (Blackstone) has purchased 296 sales on MLS since August 1, 2012. This accounts for 7.5% of the market under $200,000 in Sacramento County during the past few months. It’s safe to say they are the dominant factor in the stats below when considering cash sales have increase by 8% from Q3 to Q4.

Any thoughts? I’d love to hear your perspective.

Cash Sales in Sacramento Placer and Yolo County through December 17 2012- Graph by Sacramento Appraisal Blog

cash in Sacramento County and Yolo County and Placer County Chart - by Sacramento Appraisal Blog - 530 pixels

Sharing: You are welcome to share these images on your blog, website or in a presentation. Please keep the image intact (unaltered) and provide a link back if online. Email me if you need a larger image. See my sharing policy for details.

Quote in SacBiz Journal: By the way, I was quoted in the The Sacramento Business Journal last week in their piece “Housing market benefits as more young families seek homes“. Check it out if you’d like.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

How can values be increasing when unemployment is so high?

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Does it seem odd to you to see the market so “hot” right now when unemployment is still so high? During the real estate “boom” in previous years, the unemployment rate was closer to 5%. Even though the current unemployment rate is 10.2% in Sacramento County, we are seeing values increase. On paper it would seem critical to see unemployment decrease to see the market improve exponentially, but factors such as historically low rates, incredibly low inventory and heightened investor activity are driving the market right now – despite needed job growth. This begs the question: How would the market really be doing without so many external factors giving it a boost?

Unemployment Graph by Sacramento Home Appraiser Blog

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

Unfolding trends and fresh stats under $200K in the Sacramento market

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Let’s unpack some fresh stats today to help interpret the market and see trends as they are unfolding before us. In the past month I’ve shared about hedge funds, cash and FHA, but let’s throw in conventional sales into the mix today. What is the quarterly percentage of FHA, cash and conventional sales in Sacramento County over the past few years? The chart below shows all sales under $200,000. Why have I been focusing on the market under 200K? This is why: 35% of all sales in Sacramento County this quarter have been cash, but 49% of all sales under $200,000 have been cash deals during the same time period. As you can see, cash has been devouring the market – particularly in Q4 so far. Conventional sales have seen a slight uptick from previous years. FHA deals have been suffering as cash has trumped the market.

By the way, last Sunday The Sacramento Bee wrote a solid piece on investment funds purchasing in Sacramento. I recommend reading it. You’ll see a quote from yours truly in the article too.  🙂

What else do you see? Does anything surprise you?

Chart of Cash FHA and Conventional Sales in Sacramento County - by Sacramento Appraisal Blog

Sacramento County Unemployment rate - Hostess - by Sacramento Appraisal BlogUnemployment Rates & Hostess: Jobs are an important economic indicator. When interpreting real estate stats, I tend to go back to how many people are working in the Sacramento area. This impacts people’s ability to purchase as well as how much house they can afford too. Click on the thumbnail image on the side to see the trend of unemployment in Sacramento County over the past few years. Do you think we’ll see lower numbers next month in light of Hostess closing its doors in Sacramento? Feel free to use the image on your own blog or website (please use according to my sharing policy).

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

Where is Blackstone buying in the Sacramento market?

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I mentioned last week how hedge funds have been a dominant force in the Sacramento market. THR California LLC (Blackstone) in particular bought nearly 3% of Sacramento County sales on MLS since August 2012. They are buying on MLS and on the court steps, and they’ve purchased 198 properties so far over these past few months.

Where is Blackstone buying? This is good to keep in mind if you or your clients are also competing for properties in these neighborhoods. Also, there will be more rentals in these areas in coming time, which will be an important trend to watch.

Blackstone Purchases in Sacramento County - by Sacramento Appraisal Blog

The map above shows all sales purchased by Blackstone in Sacramento County since August 2012.

The map above shows all sales in the Rosemont area as well as Rancho Cordova (there was only one sale in Anatolia). There is very little activity in the Arden-Arcade area and only three sales in Carmichael and one in Fair Oaks.

Elk Grove - Blackstone - by Sacramento Appraisal Blog

Mostly all purchases in Elk Grove were under $200,000, though some were closer to $250,000 and one slightly over $300,000.

Del Paso Heights - Blackstone - by Sacramento Appraisal Blog

Blackstone appears to be avoiding Del Paso Heights entirely, but they are definitely buying in older Natomas (there are very few sales in newer Natomas).

Oak Park and Tahoe Park - Blackstone Activity - Sacramento Appraisal Blog

Oak Park has also apparently not been a target for Blackstone so far. They are buying in Tahoe Park and throughout South Sacramento and Meadowview though.

Summary of Buying Philosophy (my opinion): Ultimately it seems the target property for Blackstone has been under $200,000 for the most part and in neighborhoods that generally have more stability. Many of the areas they are targeting are places very ripe for first-time buyers. The “move-up” more established areas like East Sacramento, Curtis Park and Land Park are being avoided completely. For further reference, THR California LLC (Blackstone) has 5 purchases in Yolo County, 7 in Placer County, 8 in San Joaquin County and 26 in Solano County (zero in El Dorado County).

UPDATE on 11/20/2012: Here is a Blackstone video shared on YouTube over the past week.

What else do you see? I’d love to hear your thoughts below.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

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