Keep it Real in Sacramento

Although the available inventory of Sacramento real estate homes on the market has remained steady for the past month and is down from where we were six months ago the median price for a home has continued to decline.

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From Realtor.org: Susanne Cannon, the director of the Real Estate Center at DePaul University, says that at a conference this month with other academics who specialize in housing, the consensus was that many buyers have been waiting on the sidelines until the market hits bottom and then plan to make their move.

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Borrowers with good credit but without 5 or 10 percent to put down are likely to be shocked at the rate they're offered, if they're offered a mortgage at all.  Lenders are eliminating certain products altogether as well as requiring higher credit scores and down payments, more extensive appraisals, larger savings accounts, and additional income verification.

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Looking a bit closer at the recent SacBee story, “Home sales seek bottom” we see that Placer County real estate may be looking harder for the bottom than some of the other local areas that make up the greater Sacramento real estate market.  The median sales price for existing homes sold in May dropped $10,750 from April to $437,750.  This is off 9.6 percent from a year ago.  This is the largest one year price decline in the four major counties, Placer, Sacramento, El Dorado and Yolo.  The good news in Placer County is sales volume. Including condos there were 512 closed escrows in May.  This is up sharply from 378 in April and is on par with May 2006 when there was 516 closed escrows. 

Hopefully we will continue to see buyers out looking, especially in Rocklin where I have a new listing.  Check out this great 4 bedroom, 3 bath home off of 3^rd Street on Willard Way.  It is a great home, with loads of extras and ready for a new family.  With almost 1,900 square feet of living area you won’t find anything this nice priced below $200 per square foot.

I thought it would be interesting to check on a few other local agents as see what they are saying about our local Sacramento real estate market.  Here is what they are saying:

·         In the short term expect to see a level of stabilization within the overall real estate market in California for the next three/four months. Ed Fitch

·         With summer, optomisum(sic), growth and renewal are in the air. Buyers are out looking and buying all the great properties that are on the market right now. Tammy Gallentine

·         Know this, things will get better. Land is scarce, the prices of raw commodities are high, permits are difficult to come by, and environmental hurdles will continue to restrict building. Your home will be an excellent investment over the long term. Hang in there!  Jimmy Castro

·         It is still an awesome market for buyers and homes are still selling if priced right! What an awesome summer it is going to be. Randy Hawley

·         Real Estate market is good in Sacramento area. As looking at the increasing inventory of houses for sale and the average time a house stays on the market before selling, it seems like the housing market is buyer's market.  Jack Dhaliwal

·         The month of May saw the real estate market continue to mprove(sic). Michelle Dinh and Julie Dinh Cooper

Okay, real estate agents are not the best spellers and tend to be optimistic when writing advertisements.  I found all of the above quotes at Realty Times. 

By the way, looking for a new home or a place to have some horses, check out our Current Listings.

Well, our quick trip to Anchorage is almost over.  We have a busy day with some last minute tasks over at the Lamplighter property, some errands to do and a final dinner with friends and family.   Been a great trip but we are starting to get anxious to be at home and get on with the final few weeks of school and then summer.

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At least on a national basis there are some analysts who are pointing to what is happening and claiming the current housing slump has bottomed out and starting to recover.  Check out my article and review of what Joe Kalish, from Ned Davis Research, has to say in a recent USAA article on the real estate market.  You can see my article, The Worst May be Over?, on the Real Estate News page or here in my column over at Rocklin & Roseville Today.

My column, “No March flowers for Sacramento real estate,” at Rocklin & Roseville Today, got a bit of play, when part of it was posted over at Sacramento Land(ing).  One comment posted there said, “If RE agents only took listings that fairly reflected current prices, and managed those prices throughout the listing period, I would bet their personal sales would increase 50%.”

I don’t know of any Realtors who actively practice setting prices significantly above the market value because when you do that, you are setting yourself up for failure in the eyes of your client, spending time and money on listings that have a low probability of selling and creating negative advertising with your name on a stale for sale sign.

My personal philosophy on pricing is to tell the seller what I think the home will sell for and provide information to support my recommendation.   I believe, seller’s who set a realistic asking price when they come on the market will generally get a higher sales price than those that come on with an above market price and then, over time, lower the asking price (see my article on pricing).  You get the most interest during the first week to 10-days the house is on the market so you want price to attract buyers, not chase them away. 

Although I support and encourage selling homes at realistic prices, I work for my clients.  It is their home and setting the price is their decision.  For the reasons above, I will NOT list a home with a price that is significantly over what I believe the current value is.  But I will list it at a price above what I recommend as long as we have a plan to reduce the price in a relatively short period of time.

There is nothing positive to report about the Sacramento real estate market in March.   Sales volumes are down, prices are not showing any strength, and inventory of available homes continues to grow.  Slice it and dice it anyway you want and I’m not sure who you are to find anything to feel good about.  Well, I suppose there are a few “bubblers” out there who seem to take delight in seeing the Sacramento real estate market in trouble.  Read the full story: “No March flowers for Sacramento real estate” on my Real Estate News page or in my column at Rocklin & Roseville Today.