Let’s take a quick look at some trends in different neighborhoods of Sacramento. Yes, property values have been increasing, but it’s important to sift data and trends in context too. Instead of putting too much weight on county-wide median sales price figures, for instance, it’s vital to look at data in each neighborhood to interpret change. I’ll touch more on this in a few coming blog posts, but for now I really wanted to take a tour of sales in various neighborhoods to highlight the market.
How do these graphs strike you?
Quote in SacBee: By the way, I was quoted in an article in today’s Sacramento Bee article, “It feels like a house ‘boom’, but is it?” Check it out and let me know what you think.
It’s interesting to note how tight the market was from the late 1990s through the “bust”, and how more recent sales in this Arden-Arcade neighborhood are a bit more segmented. Have you seen the price gap widen in different areas?
As you can see in most graphs in this post, The Boardwalk at Lakeside condos in Elk Grove have seen an uptick this year. This increase in value is seen almost across the board in the market whenever I make graphs. However, a 22% increase is not seen in every neighborhood, or with every property type or house size either (the median price was recently reported as having increased by 22% over the year by Zillow / SacBee). The key in valuation is to find recent sales that are truly competitive, and then give stronger weight to those sales instead of applying market-wide metrics that may not be reflective of a specific neighborhood or sub-market.
What do you see above in “The Rivers” in West Sacramento? There aren’t many recent sales, which sometimes makes it challenging to decipher current trends.
The condos at The Reserves at Galleria (as well as other neighboring condos) have been seeing an uptick after a steep decline. One of the interesting things about condos in today’s market is there are many cash purchases from investors in some developments because conventional and FHA buyers cannot qualify because of HOA issues or lending issues. At the same time, some condo subdivisions are being marketed in MLS as “owner occupants only”, which is a move by the HOA to get back to adequate owner occupied percentages so the condos can be marketed to a wider pool of buyers (who can obtain financing).
This graph shows all newer construction in the Rosemont area of Sacramento (built after the year 2000). There are a few subdivisions in the Rosemont area that were built out just before the “bubble” burst. There has been an uptick in these neighborhoods, but at the same time there are still some properties selling at lower levels for sure.
Property values are still lower than they were in 2008 and 2009 in Rosemont, but the uptick is still very obvious this year. This graph helps show a common thread in many Sacramento neighborhoods. There are far fewer sales at the bottom of the market in light of a decline in foreclosures and strong appetite by cash investors. In fact, 50% of all single family detached sales in Sacramento County in January and February 2013 were cash. We should definitely consider this factor as we interpret the market, don’t you think? Might rampant cash sales under $200,000 and vastly lower foreclosures help prop up median price levels? Yep.
The Madrone condo subdivision in Empire Ranch in Folsom tells a common story. Huge decline. Stabilization. Beginning signs of increasing values. These condos have been flying off the market as prices bottomed out last year.
When looking at 15 years of sales in the Sacramento area, we often see a mountain-ish image like the one above. One of the interesting aspects of the Suncountry PUD (55+ community) in South Sacramento is how segmented the market still is. For instance, there have been some foreclosures that sold recently at very low levels despite how “hot” the market has been (Jeff Grenz and I recently talked about this phenomenon). These properties may have not been in pristine condition, but they were still dumped on the market at lower price levels instead of given more time to have sold at a reasonable level. When many properties are selling between $115-130K, for example, having a couple foreclosures sell around $80,000 is just low.
Question: Any thoughts?
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I don’t have the other half of this graph, but trust me, you could pretty much flip the current trend since 2005 and it would fairly accurate. I wanted to include this one to illustrate how far the condo market has declined since the bubble burst. Older lower-end condos have particularly struggled in light of greater affordability outside the condo subdivision and sometimes 
In contract, more well established classic neighborhoods in the Sacramento have a much less defined “tree view”. In other words, while property values have still seen a hefty decline from the top of the market, values are still higher historically speaking than many surrounding areas. River Park is a good example as you can see values hovering well above 2002, where as many areas have property values deeper into 2001 right now.
The Curtis Park neighborhood shows a similar trend. The graph above isolates all sales with a GLA between 2000-2600. I put together graphs like this sometimes to help show context historically for my clients.
Lastly, here is “The Bluffs” condo subdivision in Fair Oaks. You’ve probably seen these condos when passing over the American River on Hazel Avenue since they overlook the river and sit right on top of the “bluffs”.
