Doug Reynolds

Seven things to watch in real estate during a pandemic

April 14, 2020 By Ryan Lundquist 25 Comments

What’s the market doing? What can we watch right now to get a better sense of housing trends during the pandemic? Here are seven things I’m keeping my eyeballs on these days. Anything to add?

SEVEN THINGS I’M WATCHING DURING THE PANDEMIC

1) Listings: We often think about listings increasing as a way to see the market changing, but right now many markets across the country are seeing fewer new listings. So at times change is best seen with less of something rather than more. It’s not a surprise to see fewer new properties during a pandemic, right?

2) Pendings: When the number of pending contracts declines it’s likely a sign that buyers have begun to back off the market. Like many areas across the country, pendings are down 40% right now in the Sacramento region. There are simply fewer buyers willing to engage with the current market. Also, one of the things we want to watch is the gap between all listings and current pendings. If this gap widens it will soften prices and give buyers more power.

3) Sales volume: When fewer sales start to happen, it’s a sign the market has changed for some reason. This image below shows we are at the beginning stages of seeing sales volume dip due to the pandemic. In other words, the second week of April clearly saw FAR fewer sales compared to last year at the same time. From here on out it’s likely we’re going to see bigger changes in sales volume since many homes beginning to close got into contract over the past month during the pandemic.

4) Canceled / Hold: A market isn’t just about what is listed, but what used to be listed. There have been over 1,000 listings taken off the market in the Sacramento region over the past four weeks. The removal of these listings has helped the market feel much more balanced than had these listings still been active. Key questions: How many of these listings will come back? When will they hit the market? Will there be enough pent-up demand to meet the supply?

5) Word on the street: What are buyers, sellers, and real estate professionals saying? The stories of today become the stats of tomorrow, so paying attention to what people are saying is huge.

6) Other metrics: There isn’t one end-all metric to tell us everything we need to know about the market, so it’s important to pay attention to lots of little things such as days on market, changes in financing, the average list price, the sales to original list price ratio, price reductions, the number of multiple offers, changes in various price ranges, concessions offered by sellers, etc… Let’s remember the market isn’t going to be the same for every property type or in every price range or neighborhood.

7) Prices: In real estate we are so obsessed with prices, but that’s really the last place to look to see the market. What I mean is change happens first in the areas above before showing up in sales stats a couple months down the road. In short, for now the slower pandemic trend hasn’t infiltrated sales price figures as of yet in Sacramento. This doesn’t mean the market is stable in every price range and location. All I’m saying is regional and county stats don’t show price declines right now. Normally I pull monthly price data, but I’ve switched to weekly in order to see the trend sooner rather than later.

I hope that was helpful. And yeah, that was long. But hopefully it was worth digesting whether you’re local or not.

Okay, moving on.

A FEW RESOURCES:

New market video: Here is a fresh market update video. This is 30 minutes and perfect for the background while quarantining. Check it out below or here.

Q&A video: Here is a video I did recently with Doug Reynolds to talk about the market and appraisal stuff. I have many of these lined up and I’m glad to share them in the future. As a side note, I’m not an advocate for any brokerage and I’ll never take sides. I’ll do interviews with just about anyone as long as there is mutual respect and I have time to do so. I’ll share videos here only if the end-product is worth sharing.

Zoom with Grounded: I mentioned a Zoom meeting last week hosted by Grounded and some of you were able to join live (thank you). I have about four to five Zoom sessions per week these days, though most aren’t public. I look forward to doing these with many brokerages. Watch below or here.

BIG MARKET UPDATE (ON HOLD): I normally write a huge market update around this time of the month, but my entire life and social media feed has been one big market update lately. So I’m putting my typical format on pause so I can spend time on more pressing visuals.

I hope this was interesting or helpful. Thanks for being here.

Questions: What are you watching in today’s market? Did I miss anything?

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A hair stylist says we’re not in a bubble…

November 6, 2018 By Ryan Lundquist 22 Comments

Everywhere I go people are talking about housing. So it wasn’t a surprise to have a market conversation with a hair stylist while flying to Texas last week. We talked about real estate bubbles and mullets. Anyway, here’s a few quick takeaways and some thoughts after attending an amazing conference called AppraiserFest.

Of course I shared this conversation on Twitter:

TAKEAWAYS:

1) Opinions: Everyone has an opinion about what the market is doing or will do in the future. These days when I meet people I tend to ask them what they think is happening, and I’m always grateful and fascinated to hear responses. The truth is I like to hear opinions, but the bigger issue is an opinion without influence from local data isn’t that meaningful, whether it’s from a hair stylist, economist, or real estate professional.

2) Local data: The only thing that really matters right now is local data. What do the stats say the market is doing? What is the word on the street? What are we hearing from sellers and buyers? What is normal and not normal for a slower fall season? More than ever we need to pay attention and sometimes sift through the hype of doom & gloom real estate headlines too. This market presents us an opportunity to be objective, honest about not knowing the future exactly, and creative to find ways to describe what the market is doing. On a side note I’ll have my big monthly market update posted next week.

3) Mullets: Speaking of mullets, six years ago I helped coin the term “parcel mullet” to explain the phenomenon of having a short lawn in the front and a long lawn in the back. Either you think that’s hilarious or now you know I’m immature.

REAL ESTATE “ISLANDS”

I just got back from a conference called AppraiserFest. It was incredible to hang with nearly 300 other appraisers for a few days in San Antonio. I was honored to speak too. Anyway, here’s a couple of things on my mind that I wanted to share as an encouragement to real estate professionals.

1) Islands: It’s easy in real estate to go about things alone or be an “island” so to speak. But growing professionally and learning often involves intentionally being around people who will help us grow. I know this seems basic, but often appraisers are solo artists and completely isolated. That’s not a good thing, and it’s one reason why it was so powerful to see appraisers come together.

2) Finding people: With so much talk about the market changing, it’s critical to be surrounded by people who are accurately interpreting the market and helping us think through issues. My encouragement is to find others to help you think out of the box when it comes to real estate trends (and being successful in any market). I realize that’s a bit vague, but it’s something that needs to happen. As a side note I read Jonathan Miller’s Housing Notes every Friday without fail, and that’s one practical thing I do to help keep my mind sharp. For me Jonathan is one of those people who speaks into my life from afar and I’m better for it. That’s one reason why it was a real pleasure to meet him in person this past week.

I hope that was interesting or helpful.

Market update video: Here’s a video I did with Realtor Doug Reynolds a couple weeks ago to talk through the fall market. Check it out if you’d like. If you want to do something like this too, let me know.

NOTE about this video: Someone asked me how much I charge to share a video with an agent like the one above. In short, I will NEVER do that. I shared this because I was in the video and the content is worth digesting. I did this video for free with Doug and that’s what I do with everyone. I have a couple more video shoots on the docket and I may share those eventually too, but only if they actually fit with what I’m saying. If a video doesn’t add value or fit within what I’m trying to say, then it won’t get shared. Make sense? Hopefully so.

Questions: In what places are you having real estate conversations lately? What voices are you listening to right now that are helping you grow and think through the market?

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What 12 Realtors are Saying About Sacramento’s Housing Market

December 19, 2013 By Ryan Lundquist 11 Comments

What do you get when you ask 12 Realtors one question? I know it sounds like I’m setting you up for a lame joke, but I’m actually going to share some insider perspective on the local housing market. I asked a handful of Sacramento area Realtors to describe the market in just a few sentences. This is first-hand insight straight from the trenches, and I hope it helps paint a picture of how the market unfolded in 2013 and what is happening right now. Enjoy.

Any thoughts? How would you describe the housing market right now?

sacramento real estate market in 2013 - image by sacramento appraisal blog

Steve Ostrom – Roseville Realtor: The 2013 housing market was a roller coaster ride, with crazy turns the whole way, powered by years of government interference.

Barb Lebrecht – Realtor: It appears for now that the cash dragon is in hibernation. The decrease in competition and increase in inventory makes it a great opportunity for buyers that feel a little tattered from recent market conditions.

Jeff Grenz – Realtor: While we are looking at a little slow down, some of which is due to normal, but forgotten seasonal trend, I am encouraged when I look at the suburbs, where the dollar volume is pretty significant, average prices are almost double and are hitting 2004 levels (vs 2003 for Sacramento)…. I’m thinking it is due to a return of confidence and ability to get loans in the higher price ranges, not necessarily income growth but I’m speculating.

Angela Jones – Realtor: I felt like 2013 was headed for the same disaster of a situation we experienced in the mid-2000s. Huge price increases, investors beating out owner-occupants, double digit multiple offers creating a feeding frenzy! Glad to see the values for the most part stabilize.

Keith Klassen – Realtor: The market in 2013 began with a hopefulness and turned into an upward, turbo-propelled rocket. People who were upside down in their mortgage and investors who were hanging on for dear life, now could sell – and that’s what many did! During the later part of the year the mood changed as investors hit the brakes and many have pulled out of the market. It’s no secret, but at this moment at the end of the year, the savvy investors that have stuck around and are not too busy with holiday shopping may get some good deals. Busy-with-life home buyers will most likely get back on track come the end of January 2014. We are primed for more balanced, but slowly increasing market in 2014.

Doug Reynolds – Realtor: The market was in full sprint mode from January through July with prices skyrocketing, multiple offer competition, no inventory to speak of and cash buyers everywhere. As 2013 comes to an end, the market is taking a holiday breather where many cash investors have pulled back, inventory is trickling up and buyers are taking a bit more time to make a decision, as balance of power is being restored.

Erin Stumpf – Realtor: In 2013 the Sacramento real estate market started off with a high fever, and the only cure was higher interest rates and rising prices and waning investor demand. As 2013 ends, we have higher interest rates, higher prices, and lower investor demand — and a low fever but still solid demand. It’s nice to see your average joe have a legitimate chance to actually purchase a house!

Craig Dunnigan – Realtor: Investors dominated the residential market the first half of 2013….The last half of 2013 has seen the market returning to normalcy, with more “move up” and first time homebuyers.

Bruce Slaton – Realtor: Market had overcorrected, Hedge Funds saw increasing need for rentals, lower gains in stock market, housing undervalued.. Hedge buys until their internal data shows they may have priced themselves out, left to better markets…we captured equity, was best time to sell…2014 will be the year of no smoke and mirrors, the market will have to face reality and novel things such as Appraised Value, Condition, Pricing At Something Called Comparables…The difference between Listing Agents and Marketing REALTORS will be defined in 2014…looking forward to a medicated market in 2014…

Eric Peterson – Realtor: The market accelerated through the spring with higher than expected price appreciation across all segments. Unfortunately, on the 1st of July the market began to cool and once the numbers are in for the final months of 2013, I believe roughly half of the appreciation gained in the first six months of 2013 will have been given back in the second half of the year.

Gena Riede – Realtor: The real estate market in 2013 saw most homes in multiple offers with buyers willing and able to pay the difference in appraisal amount & buyer’s offer. By the end of 2013 with low inventory & freezing temperatures, buyer rush somewhat cooled with fewer multiple offers & some reduction in listing prices where sellers continued thinking prices were on an upward trend. Typically, this time of year more buyers are dealing with the holidays so I believe we will see multiple offers again in 2014 even though lending will be tighter and home sellers are preparing their homes for sale.

Lori Mode – Realtor: Although the real estate market in Sacramento has been challenging at times this year because of many changes and shifts in the market, I have great expectations for an incredible 2014. I see many more homeowners being able to move up or downsize due to added equity in their homes, which makes 2014 a very promising year.

As an FYI, here is a quick video I put together to talk through the image above. It’s amazing to see that the median price in Sacramento County increased by 53% over the past two years. That’s NOT a typo.

Closing Comments: Thank you everyone for your thoughts. I sincerely appreciate the array of insight and experience represented here. As an appraiser it’s my job to pay close attention to market trends in the Sacramento area, and a big part of that involves digesting what I hear from trusted Realtors who are riding the waves of the market with buyers and sellers. Thank you again friends.

sacramento realtors - by sacramento appraisal blog