Top 10 Favorite Appraisal Assignments of 2009

1. Facuets Left On:  I appraised a bank-owned property in Solano County. It was a very nice property, but unfortunately all faucets and spickets were left on (with clogged drains), so there was extensive water damage. It was unclear if the damage was done by the disgruntled home owner or a vandal.
2. Oak Park Fixers:  This year I appraised quite a few fixer properties in the Oak Park area of Sacramento that were purchased by an investment group, re-habbed, and then re-sold on the open market to first-time home buyers. It’s nice to be a part of a project where the end result is good for the community.
3. Vacant Subdivision Land in Sacramento:  Acting as a property tax consultant, I valued two parcels in Sacramento County under the supervision of an AG (Commercial Appraiser). These sites were scheduled to be finished out as a subdivision, but then the market burst and subdivision building virtually stopped.
4. Spring Water & Cesspool:  I appraised a house in Placer County that was on spring water and a cesspool (as opposed to a well and septic tank). Do you think this would have an impact on market value? How much of a price discount would it take for the typical buyer to look over an atypical feature such as this to purchase the property?
5. Dilapidated Fourplex:  This property was interesting because it had repeated damage from squatters. I had to climb through a window to inspect one of the units too, and I cut my finger on broken glass (that made me remember this property even more).
6. Upgraded Duplex:  The residential-income market in Sacramento saw a huge decline in value over recent years. All of the latest sales in this particular neighborhood were fixers. So what is a bright and shiny upgraded non-bank-owned duplex worth in a marketplace of REO fixers?
7. Rancho Cordova Property:  I’ll be honest. Since my office is located in Rancho Cordova, it sure is nice to get local assignments in the same city. I don’t mind at all driving to other counties, but it’s a great thing to travel a mile from the office to take care of business. My business in Rancho Cordova definitely increased this year.  
8. Divorce Appraisals:  I do work for home owners and attorneys during a difficult time of life. It was a pleasure to provide excellent service to home owners in need this year and at least make the appraisal process smooth in the midst of a challenging situation. I grew up in a divorced home and I know it’s not an easy time of life.
9. Pre-Listing Appraisals for Local Agent:  I am a huge fan of working with local Realtors and it was a pleasure to establish a new working relationship with a particular agent who began to rely upon my knowledge and services this year. This year I had more referral work from Realtors and that’s a wonderful thing!!! I am also really grateful to be more connected to some stellar local real estate agents on Facebook and Twitter too.
10. Ripon New Subdivision:  There was nothing terribly complex about this assignment, but I really felt like I did a solid job on this appraisal in Stanislaus County and my client was very happy with the end-product. It’s just one of those I remember putting in a good amount of time and really enjoying the finished product.

I appreciate all my clients and colleagues who made 2009 a fantastic year. This has been a trying year for the appraisal industry in light of HVCC, but I am grateful nonetheless for all the good things that happened this year. Thank you.

If you are a real estate agent or home owner, what was the best experience you had this year with an appraiser? If you are a real estate appraiser reading this post, what were some of your favorite assignments this year.

www.lundquistcompany.com/blog My Top 10 Favorite Appraisals of 2009

www.lundquistcompany.com/blog Photos from the Field: Christmas in Capital Village

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, the percentage of bank-owned sales dropped by 5% in both Rancho Cordova and Sacramento County, while at the same time the percentage of Short Sales rose by 7% in both Rancho Cordova and Sacramento County. Over the past two years Rancho Cordova had a 7% lower foreclosure rate than Sacramento County and a 2% higher percentage of short sales. 

www.lundquistcompany.com/blog Foreclosure and Short Sales Figures in Rancho Cordova Compared to Sacramento County

Together we can make a difference – even in this economy. Do you believe that? Thank you to local residents, businesses, churches and organizations that partnered together to put shoes on the feet of students in need. I stand in awe.

www.lundquistcompany.com/blog Wonderful Results from the Project 680 Shoe Drive

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

I know, I know, the following sounds like a shameless plug, but this is very important information to understand. As an FYI, here is a video we made regarding lowering property taxes in Anatolia. We have been able to help Anatolia home owners over the past several months put together very thorough valuation reports to contest the level of their property taxes (the report is not a full appraisal OR near the cost of a full appraisal). Keep in mind that the deadline for disputing property taxes in Anatolia is 11/30/2009. 

Keep us posted if you have any questions. You are welcome to comment above, call 916-595-3735 or email ryan@lundquistcompany.com.

http://www.lundquistcompany.com/blog Anatolia Neighborhood in Rancho Cordova: Sales, Pendings and Listings over the past 90 Days

I firmly believe we can find creative solutions to some of the problems we face in our society, especially as it pertains to local children in need.

Project 680 is a grassroots community effort to find relevant and practical ways to support local students in need. We are working closely with the Folsom Cordova School District Liaison for Homeless Services to support her yearly shoe drive for needy students, and our goal is to raise $1,500 to cover the cost of 100 pairs of brand new shoes. Project 680 is a volunteer team effort and we partner with local residents, individuals, households, organizations, churches, and businesses, to advocate for local kids.

There are many ways to get involved in the shoe drive as mentioned on the Project 680 website, but one specific and creative way that I wanted to make note of is to be a part of the P680 Bike Ride. On Saturday, 11/07/09, Project 680 is hosting a community bike ride as a creative and fun way to raise money for new shoes for needy students. Riders are invited to donate $5.00 each or $10.00 per household, or even put together a “Riding for Shoes” team.

Please have a look at the Project 680 website at www.project680.org and specifically under “Shoes” and “Bike” for information on the Shoe Drive and the Community Bike Ride. This is a short ride and very family-friendly. Even if you haven’t been on a bike for a few decades, you can do this one!!!

Thank you everyone for taking a moment to listen and for your support. Let me know if you have any questions!!!

http://www.lundquistcompany.com/blog Project 680 Shoe Drive & Bike Ride

The trend graph below records all single family detached sales in the city of Rancho Cordova through Sacramento Area Metrolist. The unemployment figures are based on data provided by EDD. What do you see in the graph? Does anything stand out to you or surprise you about the sales (blue dots) or listed unemployment rate?

Below is a view of the past 12 months of sales. As can be seen, the unemployment rate has risen sharply over the past year. It looks like overall the top of the market has seen a decline in property values. At first glance, when viewing a graph like this, it’s easy to gloss over the details, but when looking closely, it’s clear that there are less sales at higher levels over the past months, aren’t there? More specifically, there are few sales above the $400,000 level over the past 180 days.

I don’t want to be misleading in any way by indicating that unemployment is the sole determining factor for property values. That’s not what I am saying. I think there is a relationship between unemployment and the housing market, but that unemployment is only one of the factors involved. This point is illustrated perfectly by a current phenomenon in many sub-markets in the Sacramento Region. Bidding wars, multiple offers, and higher prices have become more commonplace for certain price levels. Despite unemployment rising, the lower supply of housing inventory over the past months has really helped to fuel this phenomenon because there has been more willing buyers than available houses (and prices are very attractive too because of how far they have come down from several years ago). Other factors to consider that may impact the real estate market are supply and demand, governmental regulations, interest rates, consumer confidence in the economy, etc…

Please let me know if you have any questions. You can call me at 916-595-3735 or contact me at ryan@lundquistcompany.com.

http://www.lundquistcompany.com/blog A Look at Home Sales & Unemployment in Rancho Cordova

I road an average of 15 mph throughout this brief ride and I tried the “continuous shooting” feature on my camera so that as long as I was holding the button down, my camera was taking photos.

I think the video got a bit washed out in the middle because of the sun. If you notice, when there are few trees along the bike path, the pictures look very bright. It was either that or evidence of my camera’s death since the last frame in this ride was the very last breath of life for my camera (bummer).

By the way, at the very beginning of the video there is a snake on the trail. Did you see it? A group of riders stopped to watch it cross the pavement.

I’m no photographer, but just a guy who loves biking and is experimenting with taking photos while on the road. This is my third “video” like this and I can only see my methodology evolving over time to capture some of the essence of the trails and how fun it is to ride them. The first “video” I made is much inferior to the second and third, but I’ll keep it up because that’s usually how experimentation goes. We tend to get better at what we do as time goes on. 

http://www.lundquistcompany.com/blog Riding my Bike on the American River: Round 3 – A “Video” in Black & White