www.lundquistcompany.com/blog Recap of 2009 Sacramento Area Real Estate Market

All sales over the past 36 months in Carmichael are listed below in blue and all sales in Fair Oaks are displayed in green.

It’s interesting to see an overall common trend for both Carmichael & Fair Oaks, though not ultimately surprising since the communities tend to overall have a somewhat similar appeal in the marketplace (though Fair Oaks has a slight edge as local Realtor Nate Sisam mentions below). Despite there being niches in both communities that may be superior to other areas, and a slightly higher median price level in Fair Oaks, it seems that the ups and downs of the real estate market over the past few years have been taken in stride for both of these communities. In fact, the median price level for Fair Oaks over the past year was only 2% higher than Carmichael during the first 6 months of the year, and 4% higher during the past two consecutive quarters. For reference, the latest unemployment rate in Carmichael as of November 2009 is 9.2%, whereas the unemployment rate in Fair Oak si 7.0%. The rate of unemployment in Sacramento County as a whole for November 2009 is 12.5%.

Sacramento Realtor Nate Sisam gives us further insight:

Fair Oaks and Carmichael are both established neighborhoods that offer people larger than overage lot sizes and diverse architecture. It has always been that Fair Oaks commanded a slightly higher price due to several key elements. Fair Oaks was one of the first established “Country communities” in the 20′s-40′s with a rich history in Olive and Citrus farming. Today that heritage is still evident when looking at property in Fair Oaks. Additionally the Fair Oaks Village brings the community together and adds to the charm of the area. From an accessibility standpoint Fair Oaks is slightly more freeway accessible. I would note that these communities are diverse and that pockets within each of them could be considered equal.

What do you think of the graph above? Does anything stand out to you? If you live or work in Carmichael or Fair Oaks, what do you enjoy about the community? If you had your choice to live in either of these areas, which would you choose? Comments are welcome below.

www.lundquistcompany.com/blog Riding the Same Wave in Carmichael & Fair Oaks

I know citywide graphs are not as descriptive as neighborhood-specific graphs or even if we looked at a specific square footage or age range in Fairfield. Just take the graph above for what it’s worth. It’s interesting to see six of the highest sales of the year over the past six months. Does it seem too that the lowest end of the market is a tad higher than the lowest point during the beginning of the year?

www.lundquistcompany.com/blog City of Fairfield Recent Sales and Pendings

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Plumas Lake is a suburban community, but it does have somewhat of a secluded feel because of the lack of commercial property and conveniences within the immediate neighborhood. The plan was to have developed many commercial parcels by now, but unfortunately little progress has been made beyond a Walgreens. By the way, kudos to Walgreens because they also built a store in the Anatolia area of Rancho Cordova, which faced a similar situation (a new neighborhood was built, but commercial construction lagged far behind residential construction due to the market bubble burst).

Anyway, let’s take a look at recent real estate market trends in the Plumas Lake neighborhood. The graphs below depict the past three years of sales, past one year of sales and current listings and pendings. 

What do you see in the graphs above? Does anything stand out to you? If you are a home owner in Plumas Lake, what is it you enjoy about your community? If you are considering buying a property in Plumas Lake, what is it that draws you to the neighborhood?

Your comments are welcome below. Please also contact me if you have any questions or a need for more developed research or my appraisal services. 916-595-3735 or ryan@lundquistcompany.com.

NOTE: Plumas Lake is located in Yuba County and so data is interesting. Since both Sacramento MLS and Yuba/Sutter MLS carry data for the Plumas Lake area, it’s important to look at and compare both sets of data to make sure to analyze all market activity. With that being said, the graphs above are based on Sacramento MLS for ease of use. Maybe a future post will analyze and compare both systems.

www.lundquistcompany.com/blog Taking a Dip in the Plumas Lake Real Estate Market

Let’s be honest, this one scatter graph is not meant to display anything revolutionary about the impact of Vallejo’s bankruptcy. Let’s save that for someone hired to delve into intense research to uncover that kind of information. This is purely recreational graphing out of curiosity. But isn’t it still interesting to take a glimpse at sales?

There is certainly a downward trend in the graph above, but that’s not an uncommon phenomenon for Solano County over the past couple of years, is it? The question becomes though, did the City of Vallejo’s bankruptcy impact the market at all, or is the declining trend simply a byproduct of the real estate market bubble burst and economy? 

Have you seen any tangible evidence that the city’s bankruptcy has negatively impacted home values or perception of Vallejo among buyers? If you are considering purchasing a home, is it a turn-off to you that the City of Vallejo filed for bankruptcy? Or is it no big deal for you? Feel free to comment below.

NOTE: All sales above are based upon information found in BAREIS for single family residential properties under $800,000. There were very few sales above $800,000, so it seemed most relevant to disregard a few higher sales because they were outliers.

www.lundquistcompany.com/blog A Trend Graph of Vallejo Since City Bankruptcy

Isn’t it amazing to see the impact of the housing bubble burst? Three years ago many quadruplex units in Sacramento County were selling between $400,000 to $600,000, but the bulk of sales lately have been easily hovering around $200,000 +/- or lower. With prices so low right now, many investors have understandably been purchasing 4-plex units. The ideal scenario would be to pick up a quadruplex, have postive cash flow, and then re-sell the property in a number of years when the market turns around.

I actually just finished a property tax appeal for an investor who purchased a fourplex in late 2009 for under $200,000, but the Assessor still had his property valued in the high $300,000s. He is scheduled to pay over $1,000 too much in property taxes this year because the Assessor’s records are not consistent with realistic trends in the marketplace. This is a common problem for so many properties that sold near the top of the market and are now re-selling in today’s market.

Let me know if you have any questions. Comments are welcome. Ryan 916-595-3735.

www. The Crashing of the Fourplex Market in Sacramentolundquistcompany.com/blog

Each neighborhood, niche, and location will differ in results, but generally speaking, like the data above seems to show for Rancho Cordova sales over the past 2 years, buyers tend to pay more for houses that are non-distressed transactions (notice how the red dots on the graph above tend to be located toward the top and NOT the bottom). When it comes to REO properties, it looks like the price level is a bit higher overall than short sales, though there are quite a few short sales on the upper-end of the market too. In fact, both Rancho Cordova and Sacramento County saw a 7% increase in short sales last year in comparison to the year before, so clearly there is a greater acceptance for short sales in the marketplace.

One important observation is that most of the sales at the bottom of the market are bank-owned. Why is that? Investors typically gobble up the lowest end of the market with all-cash offers because fixer-type properties at the lowest level will not qualify for conventional or government financing. This means first-time buyers utilizing conventional or FHA financing will usually need to look to a price level above the “all cash” market. In light of this segmentation, imagine scraping off the bottom layer of all-cash foreclosures. What would you find? You’d still see many REO properties, but you’d certainly see a good amount of Short Sales too. 

Overall, in my experience as a Sacramento-area real estate appraiser it seems the market price tier goes: 1) Arms-length sale; 2) REO; 3) Short Sale. This is common sense really, but it’s another thing to prove that by crunching numbers, making trend graphs, and observing data in the marketplace. But there are certainly cases and stories and sub-markets that might show a different order for whatever reason - especially depending on the supply of housing inventory and particulars of a given property. Interestingly enough, sometimes there is little to no difference between non-distressed sales and REO sales. For example, what does it do to pricing differences when 90% of all sales in a market are either bank-owned or short sales? In a case like this, since the market is clearly saturated with distressed sales, it’s probably a safe bet to assume foreclosure-pricing is indeed the market and will set the pace for what buyers expect to pay for properties (see a previous post on Patterson having 96.5% of all sales as distressed). In a case like this, there may be no verifiable difference between REO and non-distressed sales.

Let me know if you have questions or insight. Comments are welcome.

www.lundquistcompany.com/blog Is there a price difference between REO properties, short sales, and arms-length transactions?

The information above is based on all residential sales listed in Sacramento Metrolist over the past two years. Overall, it’s true that there were less bank-owned sales in Sacramento County during the last 12 months in comparison to the year before that. The foreclosure rate decreased by 5% overall, but the interesting thing is that short sales increased by 7% during this same time period. What do you make of that? Have short sales simply replaced what would have been a similar rate of foreclosure for this year? As a home owner or real estate agent, have you found banks to be more receptive to working with you to do a short sale? Comments welcome.

www.lundquistcompany.com/blog The Up and Down Dynamic of Foreclosures and Short Sales in Sacramento County

What do you notice about the graph above? It looks like the upper end of the market above $550,000 has pretty much disappeared during 2009. It’s also evident that in the midst of a downward trend over the past several years that there have been few sales under $300,000. What else do you see? If you are a local Realtor or home owner in Gold River, what insight do you have into your market, and why is Gold River desirable to buyers in the marketplace (as a real estate appraiser, I love to hear people respond to questions like this)?

Gold River Real Estate Market Data:

• 251 sales over the past 3 years
• 62 sales over the past 12 months
• 13 sales over the past 90 days
• 11% of all sales over the past 12 months were REO (bank-owned)
• 3% of all sales over the past 12 months were Short Sales
• 29 current active listings
• 13 current active short sale listings
• 6 current pendings

The lower Western portion of the Gold River area is comprised of a subdivision called “Gold River Station”. Since Gold River Station is not a part of the Gold River HOA, it was prudent to look at data separately from Gold River. Sometimes outsiders to the area get confused about Gold River Station and therefore lump it in with Gold River, but it’s not a part of the Gold River neighborhood.

It’s not hard to see that there is a big value difference between Gold River and Gold River Station. Whereas there are few sales under $300,000 in Gold River, it appears that most recent sales in Gold River Station sold under $300,000. What else do you notice when comparing the graphs?

Feel free to contact me at 916-595-3735 or ryan@lundquistcompany.com if you have any questions about the local real estate market or any appraisal needs.

www.lundquistcompany.com/blog Gold River Market Trends: Past 3 Years of Sales

The graph below displays all sales in Sacramento County for duplex properties. I know, Sacramento County is an enormous territory, but sometimes viewing large ares helps to see an overall trend.

What do you notice when looking at all duplex sales in Sacramento county? It seems the bulk of sales are well under $300,000, and that the median sales price level easily lost $200,000 or more over the past three years. Ouch. There certainly are an enormous portion of sales between $100,000 to $200,000 too, aren’t there? 

Let’s take a closer look at a specific area in Sacramento by viewing sales in North Sacramento in the 95815 and 95838 zip codes. No, that’s not a ski slope, but a trend graph of all duplex sales.

It’s interesting to see what looks like two markets at hand above: One market below $100,000 and another market hovering between $150,000-$175,000. Market segmentation (bifurcation) is common depending on condition, location, size, or even the nature of the sale – short sale vs foreclosure vs typical arms-length transaction.

One more. What’s happened in the city of Rancho Cordova’s duplex market over the past thirty six months? No surprises. It looks similar to the graphs above.

When it comes to duplexes in Rancho Cordova and surrounding areas of Sacramento, the majority of recent sales are reo properties (bank-owned). For example, in a recent duplex appraisal I just completed in a Sacramento neighborhood, 84% of all duplex sales over the past 12 months within this neighborhood were REO sales and 10% of all sales were Short Sales. It’s not an easy market when 94% of all sales carry some level of distress.

Contact me at 916-595-3735 or ryan@lundquistcompany.com if you have any questions.

www.lundquistcompany.com/blog The Bursting of the Duplex Market in Sacramento