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rapid appreciation

Rapid price growth & the Gilmore Girls next door

February 10, 2021 By Ryan Lundquist 28 Comments

It’s unbelievable to see how much prices have risen lately. Today I want to share one quick visual to show you exactly what I mean. Then I have a couple photos to share based on a conversation my wife and I had about the Gilmore Girls.

BIG POINT: The median price is about $40,000 higher than it should be.

RAPID APPRECIATION: This visual helps show the median price rhythm throughout the year. Normally we see prices go up for about half the year and then they soften during the second half of the year. Well, 2020 was abnormal because there was an uncharacteristic price dip in April (beginning of the pandemic) and then prices basically went up in the fall instead of softening like they should have. In short, if we had a normal year in 2020 it looks like the median price should have been closer to $445,000 for January 2021, but it’s now $485,000 (orange line).

Crazy growth, right?

IT’S THE GILMORE GIRLS NEXT DOOR

The other day I was walking with my wife and we were admiring a brand new contemporary listing in the middle of an older neighborhood (Fair Oaks Village). Then when seeing a Craftsman home on the adjacent lot, my wife said, “Look, it’s the Gilmore Girls next door.” This made me laugh because she doesn’t work in real estate, but she clearly recognized the contrast in design.

Here is a brand new contemporary listing in an older neighborhood.

The contemporary home is located next to much older homes.

SOME QUICK TAKEAWAYS:

1) Gilmore Girls: First off, sorry if you don’t get the Gilmore Girls reference. My wife has been streaming this show over the past few years, so I know quite a bit about it (don’t judge me). Anyway, this show is about twenty years old and it took place in a fictitious town called Stars Hollow. This town is older and has many Victorian homes, which is why my wife made the comment she did. By the way, Sebastian Bach, the lead singer of Skid Row (80s hairband), was actually an actor on the Gilmore Girls.

2) Eclectic neighborhoods: Some areas are eclectic, which means it’s completely normal to have a variety of housing designs. Thus it’s acceptable to see brand new contemporary units mixed in with stuff one hundred years old. It’s like vintage and new coexist and people are good with it.

3) Contemporary vs modern: The words “modern” and “contemporary” are often used interchangeably, but there is actually a difference. Here is a Houzz article if you want to read more (and maybe still feel confused). This blog post is also worth reading and maybe a little easier to understand. In truth I was torn whether to call this home contemporary or not, but I went with contemporary because it seems to blend some styles. Let me know what you’d call it.

4) The principle of conformity: There is an idea in real estate that homes ought to generally conform to the design of surrounding units in order to maximize value. In other words, when a home is so different it could lead to a lower value because it will stand out like a sore thumb. In many cases we accept this as a market fact, but it’s really not true all the time. For instance, in Fair Oaks Village there are many different types of units and the market embraces the diversity. Also, in Midtown we see a variety of newer modern units mixed in with Victorians and buyers are okay with that. Obviously in a cookie cutter stucco box tract it could be awkward to see something else, so it’s possible in some situations to see a negative reaction to different architectural types that just don’t fit. All I’m saying is it’s easy to assume a property takes a hit to value because it’s different, but that might not always the case.

I hope that was interesting or helpful.

Questions: Does someone in your household watch Gilmore Girls? What’s happening in your area with price growth?

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Filed Under: Market Trends Tagged With: Appraisal, Appraiser, contemporary, Fair Oaks Village, Gilmore Girls, housing blog, housing trends, median price 2021, modern, rapid appreciation, rapid price growth, Real Estate Market, sacramento housing market, sacramento regional appraisal blog, trend graphs

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?

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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

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