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investors in Sacramento County

Jaw-dropping real estate stats (even if you don’t like numbers)

June 6, 2013 By Ryan Lundquist 3 Comments

Did you like math class as a kid? Or were you more of a literary buff or science geek? I was the type of kid who had a love-hate relationship with math depending on what we were learning and who my teacher was. Honestly though, I often wondered then how numbers or theories could really be used in the real world.

Today let’s look at some stats that are bound to leave an impression – even if you don’t like numbers. Let’s check out the amount of cash in the Sacramento real estate market under $200,000.

Graph of cash sales in Sacramento Placer and Yolo County under 200K - by Sacramento Appraisal Blog

Did you know that 50% of all sales in Sacramento County under $200,000 have been cash purchases for about eight months now? How does that strike you? If you’re like most people when hearing numbers like this, it’s astounding. This is only for detached units too. When we include condos and attached units in this figure, we see the percentage increase to 53.12%.  Sacramento County has a much stronger cash presence than Placer and Yolo County. For reference, there were thousands of sales under $200,000 in Sacramento County over the past 60 days, but only 80 in Placer County (so take Placer County stats over these past two months with a grain of salt).

cash fha conventional stats in 2013 Sacramento real estate market - by Sacramento Appraisal Blog

The turning point in terms of cash purchases really began in early 2012 as news of the bottom of the market hit and foreclosures began to dry up. But then it went to a whole different level when investors like the private equity fund Blackstone made a very strong entrance in August 2012 by purchasing over 1100 properties in eight months in Sacramento County.

Why does the $200,000 price level matter? This is important because the median sales price is barely above $200,000 in Sacramento County. Remember, the median price is the one in the middle, which essentially means half the sales in the county are above $200,000 while the other half of sales are below that level. Since cash purchases are basically driving the market under $200,000, it tends to have an impact on the entire market by boosting overall numbers. Additionally, one of the byproducts of enormous cash percentages is a decline in FHA loans, which makes it more challenging for many would-be owner occupants.

Question: Did you like math as a kid? How do these numbers strike you? Share them with someone today to see what type of response you get.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

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Filed Under: Market Trends, Resources Tagged With: Blackstone, cash in Sacramento market, Home Appraiser, House Appraiser, investment funds in Sacramento, investors in Sacramento County, numbers in real estate, real estate data, real estate market trends

Tour de Sacramento real estate in 2013

April 1, 2013 By Ryan Lundquist 2 Comments

One of the best trips I ever took was a European backpacking vacation after graduating college. A friend and I traveled through England, France and Scotland for two weeks, and it was simply incredible. In fact, I hope to get back there again in a couple of years as my wife and I have begun talking about doing something big for our 15th anniversary.

Unfortunately my wallet is not thick enough to take every blog reader to Europe today, but I can give you a “Tour de Sacramento” so to speak. Let’s make four quick stops to uncover some of the real estate trends during the first quarter of 2013.

Stop 1: Distressed Sales

Over the past year the market has seen a significant downturn in foreclosure sales. Bank-owned sales essentially have decreased by 20% since the first quarter of 2012, whereas short sales had been seeing an increase until this past quarter.

Distressed Sales in Sacramento County Foreclosures and Short Sales Graph - by Sacramento Appraisal Blog

The market has persisted to gain health as the total percentage of distressed sales has seen a decrease yet again over the past quarter. However, it’s also noteworthy that inventory has been at its lowest point in years.

Distressed Sales in Sacramento County - by Sacramento Appraisal Blog

Stop 2: The Cash Factor

Cash purchases have generally been up in 2013 so far. There are rumors of certain investment funds slowing down their purchasing, but the market is clearly still saturated with investors.

Graph of Cash sales in Sacramento Placer Yolo County 2012 and 2013 - by Sacramento Appraisal Blog

The stats below consider all single family detached sales in Sacramento, Placer & Yolo County. It’s amazing to see that 36.28% of all single family detached sales in Sacramento County were cash. However, when considering all single family sales including condos and halfplexes, 39.06% of all sales were cash in Q1 of 2013.

Cash sales in Sacramento Placer Yolo County 2012 and 2013 - by Sacramento Appraisal Blog

Stop 3: The Breakdown of Buyers

One out of every two sales under $200,000 in Sacramento County has been a cash purchase lately. No, that’s not a typo. It’s no wonder why financed offers have had to be more creative in hopes of getting an offer accepted. It’s become increasingly more common to see buyers make offers above list price, ask for no credits from the seller, offer to pay a certain amount above the appraised value or even remove appraisal contingencies altogether. Yikes! FHA offers saw a slight decrease, and I wouldn’t be surprised to see that persist so long as the climate of low inventory and high-volume cash persists.

Q1 Sacramento real estate stats - cash conventional fha - by Sacramento Appraisal Blog

Stop 4: Unemployment in Sacramento County

Unemployment dropped to 9.5% in Sacramento County as of February 2013. As you can see in graphs below, the jobless rate has overall been trending downward in Sacramento, California and the United States. For reference, the unemployment rate in California right now is 9.6% and the national unemployment rate is 7.7%.

February 2013 unemployment Sacramento County - graph by Sacramento Appraisal Blog

1990 - 2013 - February 2013 unemployment Sacramento County - graph by Sacramento Appraisal Blog

Unemployment in US CA and Sacramento 1990 - 2013 - February 2013 - graph by Sacramento Appraisal Blog

Questions: What stands out to you above? Also, what was the best vacation you ever took?

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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Filed Under: Market Trends, Resources Tagged With: cash purchases in Sacramento County, cash sales in Placer county, decline jobless rate, decline of foreclosures, decrease of FHA loans, FHA decline in Sacramento, foreclosures in Sacramento County, investors in Sacramento County, market trend graphs Sacramento, percentage of distressed sales, Sacramento County unemployment graphs, short sales in Sacramento County, Unemployment Rate, Yolo County cash sales

The Sacramento market in 2012 and a crystal ball for 2013

January 3, 2013 By Ryan Lundquist Leave a Comment

I don’t know about you, but I tend to not make predictions since I don’t own a crystal ball. After all, how many real estate predictions last year really nailed the market by predicting the story of shrinking inventory and incredible investor dominance? Let’s take a look at some stats and graphs for 2012, and then humbly wonder about some possibilities for 2013.

Graph of Cash Sales under 200K in Sacramento Placer and Yolo County - by Sacramento Appraisal Blog

All Sales vs Cash Sales in Sacramento Placer and Yolo County - by Sacramento Appraisal Blog

Cash FHA Conventional Sales in Sacramento County under 200K - by Sacramento Appraisal Blog

Blackstone purchases in Sacramento County in 2012- by Sacramento Appraisal Blog

months of inventory in Sacramento Region counties - graph by Trendgraphix

Unemployment rate in Sacramento County United States and California from 1990-2012 - by Sacramento Appraisal Blog

The 2012 market story: As you can see, the story of the market has been a decline in inventory as well as the unemployment rate, and an increase in cash and conventional loans. FHA loans also declined over the course of the year. Through all of this the median sales price level did see an increase over time too. Most notably, hedge funds and investors became a very dominant force in the market this year. It’s incredible to see that one hedge fund (Blackstone / THR California LLC) purchased 4.43% of the entire market on MLS in Sacramento County since August 1, 2012. Since the bulk of their purchases on MLS were under $200,000 though, they effectively purchased 6.87% of the sub-$200K segment in Sacramento County. Does that shock you?

Things that wouldn’t surprise me in 2013: These aren’t predictions, but things I wouldn’t be surprised to see pan out. Of course, anything can happen though (as we saw last year), so only time will tell. Nonetheless, here goes.

Increase of Investors: I would not be surprised to see more investors enter the market. Many industry leaders think the real estate market hit bottom over the past year, so everyone wants a piece of the pie now.

The Hedge Fund Factor: Anyone casually following real estate knows the name “Blackstone” by now, but I wouldn’t be shocked to see other hedge funds become well-known in 2013. Honestly, since Blackstone has been very aggressive in Sacramento County, what they decide to do will definitely impact the market – whether they pull back, move forward at the same pace, increase their purchases or expand into other counties. Think about it this way. If they stopped buying right now, there would be an instant boost to inventory since they purchased 4.43% of all sales on MLS over the past few months. How does that strike you?

FHA Struggles: I wouldn’t be surprised to see FHA buyers continue to struggle to get into contract as conventional loans and cash have been more preferable to sellers. Keep in mind FHA is still a factor in the market though.

Higher Property Taxes: I would not be surprised to see property taxes increase for a very large percentage of home owners in 2013 (new assessed values will be posted in July 2013 – I’ll keep you informed).

Low Inventory: I would not be surprised to see inventory continue to be very low.

Real Estate Industry: I would not be surprised to see some real estate professionals struggle or leave the business in light of less deals (particularly if their book of business is focused below the $200,000 price level). At the same time, I would expect other RE pros to make more money this year and many to enter the business too in light of an increase of home equity and other positive factors. There really is opportunity to thrive in real estate, but lower inventory and increased investor activity means it’s critical to diversify, add new tools to the utility belt, provide excellent service and work hard. Basically, it’s time to crush it in 2013.

Questions: What do you think 2013 has in store for the real estate market? What do you think the 2012 market would have been like without increased investor activity and historically low rates?

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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Filed Under: Market Trends Tagged With: 2012 real estate data, appraiser in Sacramento, Blackstone, hedge fund purchases, Home Appraiser, home appraisers Sacramento, House Appraiser, investment funds, investors in Sacramento County, real estate market trends, recap of real estate market in 2012, THR California LLC

Where is Blackstone buying in the Sacramento market?

November 14, 2012 By Ryan Lundquist 22 Comments

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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Filed Under: Market Trends, Resources Tagged With: agressive purchasing by hedge funds, appraisers in Sacramento, Blackstone, hedge funds, hedge funds in real estate, Home Appraiser, House Appraiser, investors in Sacramento County, map of Blackstone purchases, THR California LLC

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