Changes to Comments

Some changes are occurring at Sacramento Real Estate Gal! If you've noticed I am no longer allowing anonymous comments to this blog. I have also added a security feature which requires you to copy a word to be able to post a comment - this is all in an attempt to step up security on this blog and my professionalism in general.

Enjoy!

Greenspan Calls Housing Bottom

Alan Greenspan, former head of the Federal Reserve, has predicted that housing will hit bottom at the beginning of 2009 when the market absorbs the excess inventory. He is, of course, talking about housing prices nationally.

Sacramento might already have hit bottom. Anecdotally, I see a lot of pent up buyer demand for bank-owned homes. Once the excess inventory gets bought up, watch the prices rise!

"So, what's going on with the real estate market?"

"Dear Sacramento Estate Gal: What's going on with the real estate market? Thanks, Everyone You Know Who Isn't a Realtor."

Well, you might as well ask. What's happening isn't great - if I have to liken it to having a baby - and I do liken everything to it lately - it's a little bit like the first trimester. It makes you feel nauseated and not quite all right, you have no sense of the baby moving at all, so you don't feel pregnant, but it's still fun to wait and watch.

And then there's the worrisome AFP screening to get through, so you're praying everything will be all right in the end.

But seriously, here's why a lot of business has dried up:
- many buyers who want to buy can't - there are no zero down loans (for now)
- many buyers who want to buy and can can't make up their minds about prices and how much to pay
- too many buyers are interested in deep, deep discounts
- move up buyers (those who want to sell and buy) are stuck competing with foreclosures
- and lastly, those darn short sales don't help comps.

So now you know. (Need I remind you first-time buyers that I told you this would happen and that last year was the time to buy?)

But I'm still holding on to unshakable optimism that history will repeat itself and everything will be all right in the end.

Upcoming Real Estate Book Reviews

After reading and admiring much of "Retire Rich from Real Estate" and writing this review, I now have two other books I will be reviewing over the course of the next few weeks: "The House Flipping Answer Book" and "The Real Estate Investing Answer Book" both by Denise L. Evans.

Feel free to browse through and read them before the reviews!

Real Estate Lessons from a Baby Shower

Saturday was a whirlwind. And although I promised not to call it a baby shower (too many connotations) and wanted to go with the more non-traditional baby "party" it did turn out to be a wonderful and perfect day filled with some of my favorite people in the world. Sometimes you just have to sit back and count your blessings.

But as a blogger, and as a real estate blogger nonetheless, you also have to see how you can draw inspiration and meaning from it for the investors and the home buyers. So here are three of my bigest real estate lessons from the baby party-shower-whatever-you-want-to-call-it:

1. Invite people to share the joy, not to brag - I think too many people tend to gloat when they are successful. How many of us have heard about the investor who hit the good times with that one solid investment property and then bragged about it for the rest of his life? How different would it be if he just shared the joy of it with his closest friends and family?

2. You really can pick your neighbors - Sometimes you have no idea they're so wonderful, though. My neighbor did all the work for this party. And I mean all. She decorated the house, brought serving dishes, prepared some dishes, bought the baby cake, and cleaned up afterwards (and a million other things I can't think of right now). I don't know what I did to deserve her, but thank God for good neighbors!

3. Remember what's important - I have a very strong sense of time passing since we decided to have a baby, so I have no interest any more in wasting my time or thoughts on people and things that don't matter. In the past, I've engaged in conversations and arguments with real estate nay-sayers on this blog, but no longer. There are too many great people and beautiful things in this world and the time to enjoy them is too short, so I'm just going to focus on having a great time!

Sacramento #42 for Allergies

If you think you're imagining it, you're not. Sacramento was recently ranked at Forbes.com as the #42 worst city for allergies. And if you're new to this city and thinking, I don't know what the fuss is about, wait a year or three. It will get to you! I thought everyone around me was insane too when I moved to Sacramento from Bombay almost eight years ago. Now I know better.

Where is Sacramento Real Estate Gal?

If you've been wondering at the lack of posts lately, both here and at Sacramento-home, it's because I've been on a week-long vacation. The real estate business always promises to pick up around Memorial Day, so I thought now was just the perfect time to take a break.

Yes, I'm still on vacation (technically) but still writing. How's that for dedication?

So what am I doing? I went to Fresno for about three days to see some friends of mine that I will probably not see for a while, what with baby coming and all. And tomorrow, we're having a baby party.

For someone so tiny (she's apparently 2 pounds by now) she sure is commanding a lot of attention, stuff... and real estate in the house!

If you're Watching Mortgage Rates...

... this post over at the Mortgage Reports Blog might interest you.

Dan Green writes often about mortgage rates and his posts are almost always educational. Not a bad blog to add to your subscriptions!

Relocation Buyers: Have a Baby, Make New Friends!

What better way to feel at home when you buy a new home than to have a baby? That's what I've discovered anyway. Since we moved to Pollock Pines last summer, I've been longing to find a community and new friends where we live. And just lately, it's been a lot easier. Reason? I'm pregnant and beginning to show. And now I have friends everywhere. People have come out of nowhere to help and be nice.

Yes, having a baby changes everything. But just in case procreating isn't what you want to do to ensure you have more friends, check out these other options:

Talk to More People - Visit your local grocery store and talk to anyone who will listen. If you're in business for your self, this behavior is called networking. But you can always use it if you're new. People are extremely willing to show you around or help you with locating a store or services - if you only ask. Let them know you're new. Then watch them offer to help.

Throw a Meet and Greet Party for Neighbors - This one is fun. You can invite your neighbors to your housewarming party if you choose. Really, with food and drinks, who is going to stay away? And it's a great way to get to know your neighbors.

Check the Local Boards at the Grocery Store - Maybe it's because I'm a woman but I really do think grocery stores are huge socializing place. Some will have flyers and brochures on local events at the entrance. If they do, check them out - you might find ways to get involved in your new community and make some friends that way.

Check for Local Clubs - Volunteer or Otherwise Check online for clubs in your new neighborhood. You'll almost always find something. Some might be volunteer like the Rotary Club or Lions Club, a great place for establishing community friends. Others might be more specialized. Since my husband likes to brew beer, our local club - the Hangtown Association of Zymurgy Enthusiasts - HAZE for short - gives us an excellent opportunity to make more friends with common interests.

Whatever the strategy, it's important to talk to more people when you move. Do not stay home or just hide in your house, no matter how much you love it!

How Hard is it to Sell... Really?

I've always maintained with my real estate clients that they should be more interested in buying a property than me in selling it to them. If at any moment I notice that I am doing anything more than facilitating a transaction, I wonder about their motivation, and eventually, their passion for actually getting the home they claim to want.

Why the question? Because I went to get my snow tires replaced with regular summer tires today and I got a lesson in sales.

Amazing the places you learn things!

So here's what happened - I went over to Walmart Tire Service thinking I'd get it done cheaper than Big O. After waiting for about ten minutes while the staff bickered amongst themselves (well, you get what you pay for, so I thought, oh well...) a lady comes out from behind the counter to ask how she can help.

"I'd like to get my snow tires replaced with my summer tires."

After that, she proceeds to take down my phone number and name and then says, "I need to see what tires you have."

When we get to the car, she realizes that I already have tires and after a moment of staring at me blankly, says, "Oh, you want them changed out."

I guess "replaced" has been replaced with "changed out" in WalMart territory.

Anyway, she stares at the tires and says the tread looks bad... "and you're pregnant." As if that needed to be pointed out. So she calls another guy from the staff to look at them. He says they would need to be replaced soon, but they're fine for now. But Miss Sell-Me-Tires is adamant. The tread is bad; if it was up to her she wouldn't do it.

"Why don't you just come back when you want to buy new tires and we'll change them," she says. "Now it will cost you more."

Now, I'm dreading the idea of driving around in my snow tires any longer. And if the law says they're safe for now, they're safe for now! But by this time I'm so tired of the woman's holier-than-thou attitude that I decide to leave and head over to Big O, even at the cost of paying more.

Yes, this story does have a happy ending: Big O replaces my tires, no questions, no comments, no "let me run your life for you" attitude. They also give me a discount because I've been a customer there before - and the whole thing costs less than it would have at WalMart. How's that for wanting to save a few bucks?

The story also has a moral: Within the law, do what the customer asks you - don't badger her with a holier than thou attitude to act like you care. Contrary to popular belief, it's not considered professional behavior. It's annoying and downright interfering.

Finally...

... a post on Sacramento-home after my own heart.

Go here to read what John Lockwood has to say after months of optimism about real estate thrown at him! Good job, John - and thanks for the support!

Rental Available!

It's that time of year again... another fantastic rental available! Rent is $1050 per month - and with good credit, you could get the first month free!

Get the details here.

Decorating a Baby Room: Dos and Donts

Now that my husband and I are having our first baby, we're dealing with the issue of how to decorate the baby's room. There's also the baby shower and baby furniture and in the midst of all this - it seems like - is also the overall plan of remodeling the rest of the house. Whew! So here are a few pointers on what you should and shouldn't do to decorate the baby's room:

1. Keep in mind the overall plan at all times - It's easy to get carried away with the decorating, especially if - like us - you know the baby's gender. I have seen some houses on the market recently as REOs where the parents obviously got a little carried away with the paint. The room stuck out as a sore thumb. So if you have plans of moving soon, choose a paint that complements the color scheme of the rest of the house. Once the baby gets in there, it's very hard to paint again.

2. If you do decide to put in light fixtures, store the originals in a safe place - I'm sure babies love the carnival fan. You know, the kind with all the crayola colors on the ceiling. Same for the light fixtures that look like teddy bears or ducks or whatever. But keep in mind that your future buyers might not appreciate them as much. Now, there are buyers who like baby rooms, but you will be limiting the pool, not a good idea in this market. So retain the originals, and switch them out when the house goes on the market.

3. Above all, try to stay classic - Classic colors never go out of style. Try to get help and choose these instead of the traditional pink and blue for baby. That way, when it comes time to move and put the house on the market, you're not apologizing for your baby.

And he or she will be happy where Mom and Dad are happy. Promise. Regardless of the paint in the room.

Investors are here!

Something happened to the Sacramento real estate market over the last few days and I'm wondering if anyone has noticed. I've been working pretty closely with one real estate investor lately and he was interested in making a bunch of offers on properties that haven't moved for longer than 60 - 90 days. So off I went on to the MLS... only to notice that many of those properties were in escrow!

Now, you have to ask - after 60, 90, even 100+ days on market, why the sudden activity, almost overnight?

I personally believe if you haven't bought a house yet, you've missed the bottom of the market. But we're still pretty close to the bottom, so don't be disheartened.

Just know that the real real estate investors are here.

About time!

Adding Value to your Home Regardless of the Sacramento Housing Market - Tip # 7

Yes, another one in my favorite series of posts regarding remodeling small things to make your house have more value! And since you know they all relate to my personal designing predicaments, the latest one is a common one here in Pollock Pines: not enough light in the house. It's beautiful out on the back deck, but with all the trees around us, the sunshine never really gets to make it inside the living room. As a result, my orchids haven't flowered and the houseplants need to be set outdoors a few hours each weekend to ensure they don't die.

What's the answer?

This one my electrician husband came up with: metal halides. High intensity metal halides will make plants grow. What's more they'll probably put us in a better mood in the winter months because they are a full spectrum light. But, putting them in can be a bit of a challenge since they won't work in a regular light fixture. To ensure even lighting, we're considering putting them in recessed light fixtures as well.

The entire project should cost approximately $2000 if doing the work yourself. I'll have pictures when we finally put them in. Until then, I have to beat this dim living room and kitchen with fluorescence - yuck!

REO Single Family Residences

For those of you first-time home buyers still on the fence about buying a house, you might want to look at the foreclosures here in Sacramento. Either do the search yourself or follow this link to the foreclosure listings page. I've been showing a lot of these bank-owned properties to prospective investors and - mark my words - these are going to become future rentals.

A recent poll in the Sacramento Bee said that about 50% (or more - I don't have to exact numbers) of potential home buyers are staying away from buying right now, because they are afraid of falling home prices over the next two years. If you're only going to live in the house for two years, I can see being a little concerned. But if this is a house you intend living in for anything more than seven years, I think that thought is foolish, baseless fear. Do the math and see for yourself - also consider that Sacramento area real estate appreciates at about 6% per year on an average, in spite of the dips.

Spring Brings Cautious Enthusiasm

Thank goodness the weather has warmed up! Although Sacramento and Folsom have been beautiful for a few weeks now, uphill Pollock Pines got its first seventy degree plus weekend this last Saturday and Sunday. Flowers are finally beginning to bloom - and with them come the real estate signs. REOs are a rarity here in Pollock Pines and Placerville - and when they come on the market they sell pretty quickly.

In Sacramento though, the opportunity for investors is endless. There seem to be certain areas where REOs sit for a long time before someone buys them. One of these which I've been focusing on with one of my investor buyers is the Fruitridge area. 2 - 3 bedroom houses are selling there for right around $100,000 - an incredible rental if you can make it work. Rents range from around $900 - $1100, so potential for cash flow seems pretty good. The only problem with this area is the homes are older and some are in need of repair. Getting them updated (usually they don't have central air either) requires a cash investment.

The clients I'm working with now seem enthusiastic about buying a home at this time but are also cautious. It's a good idea to be cautious anyway - you do better due diligence that way. Especially with REOs since no one knows the condition of the property it is especially important to get all your inspections done.

If you're looking for a good cash flowing rental, go here. You might just be surprised.

Realtor not to Blame: Jury

For those of you following the Ummel vs. Little case that some blogger had so kindly deposited into the comments section of my blog, the verdict is in.

The Realtor is not to blame. The jury's decision was unanimous. Read all about it here.

I will say however that even though a buyer's agent is not technically required to disclose the appraisal report to you, the buyer, I always get a copy of it and send it over anyway.

Sacramento Condos for March: the Numbers

Condos seem to be getting a bad rap lately. I don't know if it's just me, but I see investors - who were very interested in condos for a while - seem to back away from them. I guess given the choice between having a backyard you can call your very own and paying condo fees, people choose the former.

Anyway, let's get right to the numbers. The median price for condos didn't fare as well as the median price for single family residences. It dropped 24.6% from February to stop at $138,500.

Sales were up however. Sacramento county saw 90 condos sell in March, an increase of 52.5% over February. Pending sales were higher as well - 130 over last month's 116.

202 condos came on the market as new listings in March, bringing inventory down to 7.8 months, an improvement over last month's 11.9

Also read: February's numbers; January's numbers.

How Optimistic am I about Real Estate?

As optimistic as ever. And perhaps will be more so when this market recovers, because then I will have been there, done it (or seen it).

I was talking to a potential real estate investor yesterday. One thing that always strikes me about people that have been investing in real estate for a while (a while = more than a decade) is that they seem very calm about what's going on in the market. They see prices falling and REOs and they realize it is only part of a cycle. What's more, they all insist it has been much, much worse.

I yearn to have that knowledge first-hand.

I am as invested in this market as ever. True, when we bought our rentals, we probably did not time the purchase perfectly. But we haven't panicked and sold them either. There is a method to this madness and it is this: TIME. What is debt today is equity tomorrow. And the houses are rented, so why sell anyway? What difference does short term fluctuation make except to my net worth and that too for a short while?

Real estate investing is all about learning and the learning curve can sometimes be pretty sharp. But life on the other side is worth it and I can't wait!

Some have criticized my "uber enthusiasm" (And for heaven's sake... Please stop using that U word - it's so pretentious!) for real estate, but I'm sticking to my guns. Even in a down market. I just wish I had seen it coming and had enough capital to buy more rentals at this time. Oh well, I'll be better prepared the next time.

Yes, as optimistic as ever! That about sums it up.

Market Statistics for Single Family Residences for March

Good news, everyone.

We have bounced off the bottom, even if it be ever so slightly. Here are the details on Sacramento county's real estate market recovery in March, 2008.

Median price remains steady (or almost steady) at $254,000. It has hovered around $255,000 since January.

2332 new listings were added to the market and 1006 sold. Existing inventory now stands at 8632, smaller again than January or February's. We now have 8.5 months of inventory on the market, a change of 15.84% over February and of 28.6% over January!

More good news - 2021 homes went in escrow in the month of March, a whopping 37% higher than pending sales in February, which were already higher than January, which were higher than... well, you get the idea.

So... median prices have steadied, inventory is down and sales are up! The Sacramento real estate market recovery has begun.

Also read: January's numbers; February's numbers and come back tomorrow for updates on the Sacramento condo market.

REOs, Asset Managers, Multiple Offers... Grrr!

I've written in the past about one of my clients who has been making offers on homes in the Anatolia area of Rancho Cordova and getting outbid every time. Well, yesterday was what seemed to be a historic day for both of us - one of her offers was accepted.

Mind you, she's been looking since January of this year.

Back to the story. After getting outbid each time, on new homes and waiting forever on a short sale, today was the last straw. I received a call from an apologetic listing agent saying that no, our offer has been rejected after all. Apparently, the asset manager in the bank changed and someone else took over the files and they decided to go with another offer. This AFTER my client has sent over good faith deposit cashier's check, and I had made an appointment for a property inspection!

In a span of 24 hours, I lost a great, motivated home buyer.

Thanks, asset managers!

A Sick Realtor is Better than None?

No, it isn't a case of the market blues - I have really fallen ill this week. Woke up on Monday after a hectic weekend and a hectic last week of showing homes in Elk Grove and Rancho Cordova and I seem to have caught my husband's cold. It the kind that drains you of energy and won't let you stand upright for longer than ten minutes... you know the kind.

So bear with me while I recover. And in the meanwhile, if you're searching for some great investments, you might want to search online for Elk Grove. I noticed some fantastic homes there - 3 bedrooms, 2 baths for right around $200,000 - some of them right in Laguna West!

Sacramento MLS Updates

Finally. Someone heard my prayer. The Sacramento MLS - Metrolist - has made some interesting updates that should help us Realtors when we are searching for just the right properties for our home buyers.

They have added cumulative days on market - huge help, thank you! And also active short sales. This way, when a real estate buyer says leave out short sales completely, we don't have to weed them out individually.

Excellent changes! And so much more helpful than the maps they keep bragging about!

Should Banks Just Foreclose?

I've been speaking with a great many frustrated real estate buyers in the greater Sacramento area lately and the one thing I hear repeated over and over is that they have been looking for houses for a while and not been able to buy any.

But it's a buyer's market, you say.

And I agree. However, there are certain areas where short sales are the majority of homes for sale. Which home buyers hate. Picture this: drive down a street and see every other house for sale. Asking price is about half of what the sellers paid for it about three years ago as a new construction. The homes look great, and there hasn't been much time for even normal wear and tear. The home buyers are thrilled. They call the number on the real estate sign.

Three months later, they're still driving by the house they've made a full price offer on, wondering what in the world happened.

What's happened is that the lender who needed to approve the short sale has not responded. At all. Not even to say that they have received the offer and are considering it.

Meanwhile, the asking price on every other house on that block has fallen even further, as frustrated Realtors try and generate some interest in the inventory.

Would this problem just be resolved if the banks decided to foreclose on these properties? Yes. Why aren't they doing it? Beats me. Maybe they are waiting to unload some of their existing REO inventory before taking on more. Maybe they're waiting to see what happens with the market like the rest of Sacramento.

Unfortunately, by waiting for the statistics, they're creating statistics. They're creating lower list prices, which is making other homes, including REOs harder to move. Now that's irony for you. Or karma. Depending on how you choose to see it.

Sacramento Market Heating Up!

I know, I've been going on about this lately, but I just want everyone to know. I've been manning the calls at Elite Properties lately and we're getting a lot of them. These are - by the way - interested real estate buyers, first-timers, investors, you name it - and not the tire-kickers we've been used to seeing in the last few months. (With apologies to all the serious buyers, I don't mean you. Obviously.)

Anecdotally, I went out to write an offer for a client I've been working with forever now. She's been looking in the Anatolia area of Rancho Cordova and was stuck on the waiting side of a short sale for a while now. Well, when that period finally ended, she decided to go after REOs and new homes. This is what has happened so far:
REOs: multiple offers
New Homes: multiple offers

So anyway, to get back to the story, I went out to Anatolia to write an offer. Since it's a new builder, I had to do it at the sales office. Can you believe the house had three offers and it sold (with a counteroffer) twenty minutes before I got there?

Now this is the kind of the market I remember!

Take my word for it, buyers - you wait too long, you're going to miss the deals. The asking price on short sales means nothing if you don't ever hear back from the banks.

Sacramento Real Estate Gal Is One Year Old!

The blog not the person (of course!) Yay!

Landlords - Pay Up!

That was just a little tongue-in-cheek title just to get your attention. Landlord Land Mines, the book with advice for all landlords all over is in its finishing stages. John Lockwood of Sacramento-Home fame and I are collaborating to get on various writing projects and this is our very first.

Interested in getting into real estate investing? Or are you already a landlord and want to brush up on the basics? Or perhaps you're a Realtor who works with real estate investors. Well, this might be just the e-book for you! Buy one for yourself, or package it to your clients with your custom imprint.

Here's what John has to say about it:

"As a real estate investor herself, Purva and her husband, James, went through their share of landlord horror stories. Landlord Land Mines is the book Purva wished they’d had when had when they were getting started. Landlord Land Mines is written both from her own experience and from the experience of many other landlords who she interviewed for the book.

"Forget the theory and the spreadsheets — Landlord Land Mines puts together decades of collective experience and stories from real investors, who teach you what you need to know and what you need to avoid."

Why not subscribe to Sacramento Real Estate Gal today so you're the first to know when the book is out?

REOs, Real Estate Statistics and the Pricing Paradox

The investors are finally jumping in. They are actively searching properties and buying up Sacramento's real estate. February pending sales are up.

And whether while this activity signals the very beginning of the end of the bad market is debatable, there is a bigger paradox that buyers should watch for and it is this - some REOs are still pretty hot properties which get picked up immediately for far higher than the asking price. Thus even though the listing price seems like a steal, the selling price shows prices stabilizing, even amongst certain low-priced homes.

Where are these properties? Really, they are all over Sacramento county - Natomas, El Dorado Hills, even Foothill Farms and Fair Oaks. I have seen some REOs disappear in a matter of a week or two, even two to three days. These REOs have some features in common: they are usually newer, priced toward the lower end of the range in a mile radius, and don't require much work to be considered livable. Mainly, they look like such a "deal" to buyers that some are paying a premium to buy them - offering many thousands over asking price and putting down hefty deposits.

It will be interesting to see how this plays out over the next few months in terms of statistics for Sacramento county. But one thing is for sure: there is still pent up demand for homes which is not showing up in pendings or sales. Every day, of the 40 - 50 unique visitors this blog sees, about 20% are searching for some form of these terms: "Sacramento real estate market statistics;" "Sacramento time to buy a home?" "Market update Sacramento real estate;" and so on.

Maybe it's time to quit waiting and start looking. The good ones really do go fast.

How in the World did I Miss This?

I've said it before. And now the Sacramento Bee says it too.

Maybe the next time you'll listen. :)

Federal Reserve cuts Interest Rate by 0.75%

Another rate cut came in today. The Fed cut interest rates by .75% down to 2.25% now.

If you are a home buyer wondering if this will affect mortgage rates, the answer is probably yes. But maybe not in the direction you are hoping.

Head on over to Dan Green's Mortgage Reports to get an idea of why.

Ask Sacramento Real Estate Gal Answers!

I received this email the other day and thought it would be interesting to answer it online. I know the recent foreclosures have created this problem for many tenants in the Sacramento area and all I can say is that my heart goes out to them. I have always emphasized that landlords treat their rentals as a business - an ethical business - and this is obviously no way to do so. Read on:

Sacramento Real Estate Gal,
We are renting a house in Fair Oaks. The mortgage went into default in December, but we continued paying rent through February. The landlord has denied any problem every time we ask her. My husband decided to withhold March rent because she definitely won't refund our deposit. She served us with eviction papers March 10th, we received a Notice of Trustees sale on the door March 11th. The sale is scheduled for April 1st. We have been told we have to pay rent, don't pay the rent...what should we do? - S.P.

S.P.,
My recommendation to you would be to start looking for another place right away. Serve the landlord with a 30 day notice and pay the rent. Then you can pursue your deposit in small claims court. California has very strict laws about returning a tenant's deposit. You can read about them here.

To the landlord involved: shame on you. It's landlords like you that give the rest of us a bad name. Unfortunately, you are who the tenants think we all are and so it seems to make it okay for otherwise law-abiding tenants to want to steal from their landlords.

For the rest who are considering becoming landlords, you might want to head over to Landlord Land Mines regularly to make sure you're not blowing your leg off!

HUD introduces changes to RESPA

HUD recently released some changes to the Good Faith Estimate to help real estate buyers better understand the loan they are getting. Read the details here. While these measures help, I believe there is no substitute for an honest mortgage person who makes sense of the numbers for you.