• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Sacramento Appraisal Blog | Real Estate Appraiser

Real estate appraisals for divorce, estate settlement, loans, property tax appeal, pre-listing and more. We cover Sacramento, Placer and Yolo County. We're professional, courteous and timely.

  • About
  • Appraisals
  • Order
  • Ask Ryan
  • Areas
  • Classes
  • Press
  • Trends
  • Share
  • Contact

job market in Sacramento

A flattening market, jobs and bathroom reading for Sacramento real estate

September 26, 2013 By Ryan Lundquist 2 Comments

If you’re looking to stay on top of the Sacramento real estate market, here are a few tidbits to check out. I hope this helps give you a sense of what is happening. If you have any questions or insight, feel free to comment below.

1) The Market is Flattening Out: Realtor Doug Reynolds posted a video two days ago about how the market in Sacramento has been flattening out. This is right in line with the way I’ve been describing things. It’s important to watch trends closely so we are empowered to employ the best strategies for business and be on top of our game for clients. This is worth a watch or listen below (or here).

It’s normal in real estate to see the market slow down in Fall and then heat up again in Spring. The only issue is that some locals are shocked to hear this since they have only heard the market is “on fire” or that values have increased by 30%. But when we take a closer look, the trend has shifted. We’re now in a new market, so let’s keep an eye on the past, but focus on the present and future.

Sacramento County price per sq ft - Sacramento Appraisal Blog

2) The Word on Unemployment: If you didn’t catch the recent news, the unemployment rate in Sacramento County is now 8.9% as of August 2013. It’s been hovering around 9.0% for a few months now, while the unemployment rate in California is currently 8.8% and it’s 7.3% in the United States.

Unemployment in Sacramento California United States - August 2013 - blog size - by Sacramento Appraisal Blog

Here’s my take on the interaction of jobs with real estate. The recent upward trend in values was very strongly influenced by forces external to the Sacramento market as opposed to our local economy. Now that interest rates are increasing and some investors have begun to exit the market (down nearly 8% over the past few months), the job market will stand out a bit more now that we are missing some of the outside power that gave the market a boost. Remember, there are many factors that impact real estate values, and jobs is just one of the “layers of the cake” so to speak.

The Wright Report3) Forty Pages to Explain the Market: This is the most exhaustive report I know of in Sacramento. It’s worth printing and reading in the bathroom (or wherever you do your reading) to help gain some context for what is influencing the local market. If you want to go green, just download and read it on your tablet or computer. It is 40 pages in length, so it’s not a quick blog style read (many of the pages are graphs). I contributed a page or two to this report as well as some charts, which is always an honor. Visit Joel Wright’s website or DOWNLOAD HERE (PDF).

Question: What are you seeing happening in the market?

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

Share:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)

Filed Under: Market Trends, Resources Tagged With: Graph of unemployment, Home Appraiser, House Appraiser, job market in Sacramento, market trends in Sacramento, rapid appreciation, real estate market slowing down, Realtor Doug Reynolds, Realtor Joel Wright, sacramento appraisers, Sacramento market report, Sacramento Real Estate Market, The Wright Report, unemployment rate Sacramento County, values are cooling off

The crazy market, bubble talk & crunching numbers

February 20, 2013 By Ryan Lundquist 6 Comments

The real estate market has been screaming forward at an incredible pace. It’s been going fast. Maybe too fast. In fact, The Sacramento Bee reported median prices saw a 22% increase over the past year in Sacramento County, and the Sacramento Association of Realtors reported the median sales price is now back up to $200,000 after over four years of being below that point (see PDF report).

A Housing Bubble? (Image purchased from 123rf dot com and used with permission)The market has certainly felt “on fire” lately, which has caused many to remember the “glory days'” of real estate a decade ago. I know when I’m making upward adjustments in my appraisal reports due to an increasing market, I can’t help but remember the “boom” years of 2003 and 2004. Yet at the same time we are starting to hear more talk about a real estate “bubble” forming. After all, there are definitely some elements helping to prop up the market.

Market Tidbits & Trends:

  1. Jobs: It’s interesting to note during the “boom” years a decade ago the unemployment rate in Sacramento County was closer to 5% compared to 9.9% right now. This begs the question whether such rapid appreciation is sustainable since the job market still needs strengthening. In other words, if value continues to increase quickly, when will buyers (non-investors) no longer be able to afford higher prices? Equally important, will renters be able to afford higher rents on the plethora of available rentals?
  2. External Forces: The market is being driven in large part by external forces (investors, low inventory and interest rates) rather than the local economy. Unemployment in Sacramento County has decreased from a high of 13.2% in July 2010, but 9.9% is still high, isn’t it?
  3. Blackstone: Since August 2012 the private equity fund Blackstone has purchased 461 sales on MLS according to Tax Records. This represents 4.28% of all MLS sales during that time period. Other sources report they have purchased 1000 properties since August, but I’m going with what Tax Records says for the time being.
  4. Crazy Pricing: It’s understandable to see price increases on listings, but it’s important to still look at other competitive sales in the neighborhood rather than simply apply a regional or county-wide metric to a specific property. After all, larger pools of data may not be indicative of trends in every neighborhood or every type of property either. Ultimately when we read that values have increased by 22% over the course of the year, we need to consider that ample investor flips at the top and a decline of foreclosure inventory at the bottom have surely helped boost up median price figures. Yes, the market has increased this year, but we cannot simply apply a 22% figure to each neighborhood without considering the aforementioned market dynamics that have given median price numbers a boost (this is especially true under $200,000).

Should this property be listed at $200,000? I recently came across a flipped house in Rancho Cordova that sold in August 2012 around $160,000 and is now pending at $200,000. It’s a sign of the times to see an investor wanting to flip an already flipped property in such a short period of time, yet when looking at the numbers, the market has not increased by nearly 20% since August. While I wouldn’t be surprised to see the property close well above $160,000, a $40,000 increase is still steep when considering the data.

Let me share some graphs with you as an example when considering price increases in Rancho Cordova (north of Highway 50).

All sales in Rancho Cordova - north of Highway 50 - by Sacramento Appraisal Blog

This graph shows an increase in the market, but can you also see how less sales at the bottom can make overall price numbers look stronger than they are?

Price for REO SS and Normal - north of Highway 50 in Rancho Cordova - by Sacramento Appraisal Blog

Prices in the neighborhood have increased over the year. That’s very clear when looking at data in the entire neighborhood. However, what do you make of listings being priced so much higher than the most recent sales? Is there justification for such an increase? Could the increase in list price be a result of legitimate market appreciation? Could some of the increase be due to fewer available listings as well as more listings in pristine condition? Might some listings simply be overpriced? There are so many factors to consider.

All listings in neighborhood market - by Sacramento Appraisal Blog

For further reference, here are all competitive listings to the property that previously sold at $160,000 (this property is slightly over 1200 square feet).

Rancho Cordova Sales - 1100-1400 GLA - North of Highway 50 - by Sacramento Apprasial Blog

The property that sold in August for $160,000 is slightly over 1200 square feet, so let’s take a look at all competitively-sized sales in the neighborhood. There is one recent sale at $200,000, but this sale is actually newer in age and not competitive to the subject property. Does it look like values have increased from $160K to $200K since August?

All Sales north of Highway 50 in Rancho Cordova - 1200-1400 GLA - Graph by Sacramento Appraisal Blog

This last graph helps illustrate a trend for a segment of properties over time. This is one of the ways I prefer to look at a neighborhood market because it helps give a picture for competitive properties instead of data from an entire county, city or zip code – which may or may not reflect trends for the property being appraised or listed.

What are you seeing out there? Anything you’d like to add?

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

Share:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)

Filed Under: Market Trends Tagged With: appraiser blogs, Blackstone, boom or bubble, externral forces in real estate, Home Appraiser, House Appraiser, investment funds, job market in Sacramento, low inventory, prices too high in Sacramento County, real estate bubble, real estate data, sacramento appraisers, THR California LP

Primary Sidebar

Connect with Ryan

 Facebook Twitter LinkedIn YouTube Instagram

Subscribe to Weekly Post

* indicates required

Search this site

Blog Categories

  • Appraisal Stuff (407)
  • Bankruptcy (3)
  • Divorce (4)
  • Estate Settlement (6)
  • FHA Appraisal Articles (56)
  • Internet (53)
  • Market Trends (482)
  • Photos from the Field (126)
  • Property Taxes (70)
  • Random Stuff (231)
  • Resources (566)
  • Videos (161)

Blog Archives: 2009 – 2021

Lundquist Appraisal Links

  • Appraisal Order Form
  • Appraisal Website
  • Rancho Cordova Appraiser Website
  • Sacramento Appraisal Blog Sitemap
  • Sacramento Real Estate Appraiser Facebook Page
  • Twitter: Sacramento Appraiser (@SacAppraiser)
  • YouTube: Sacramento Appraiser Channel

Most Recent Posts

  • How much have prices risen since 2012?
  • How long can this market keep going?
  • What is your housing persona?
  • Rapid price growth & the Gilmore Girls next door
  • Are first-time buyers targeting 2-4 unit properties?
  • Stale real estate headlines & buyers flocking to El Dorado County
  • My new sewer line adds huge value, right?
  • The housing market nobody predicted
  • Real estate trends to watch in 2021
  • You carried me & a spreadsheet for Christmas

Disclaimer

First off, thank you for being here. Now let's get into the fine print. The material and information contained on this website is the copyrighted property of Ryan Lundquist and Lundquist Appraisal Company. Content on this website may not be reproduced or republished without prior written permission from Ryan Lundquist.

Please see my Sharing Policy on the navigation bar if you are interested in sharing portions of any content on this blog.

The information on this website is meant entirely for educational purposes and is not intended in any way to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or any other potential real estate or non-real estate purpose. The material found on this website is meant for casual reading only and is not intended for use in a court of law or any other legal use. Ryan will not appear in court in any capacity based on any information posted here. For more detailed market analysis to be used for an appraisal report or any appraisal-related purpose or valuation consulting, please contact Ryan at 916-595-3735 for more information.

There are no affiliate links on this blog, but there are three advertisements. Please do your homework before doing business with any advertisers as advertisements are not affiliated with this blog in any way. Two ads are located on the sidebar and one is at the bottom of each post. The ads earn a minor amount of revenue and are a simple reward for providing consistent original content to readers. If you think the ads interfere with your blog experience or the integrity of the blog somehow, let me know. I'm always open to feedback. Thank you again for being here.

Copyright © 2021 Sacramento Appraisal Blog