I'm introducing a new feature to this blog. Once a week, I will be responding to questions that might be on the minds of my future clients out there - that's right! You - ask a question!
Do you have a burning question about some aspect of real estate? It can be as large as buying a vacation home for retirement or as small as what you can do to get your home sold fast. Then email me or write a comment to this post and check back next week to read "Ask Sacramento Real Estate Gal!"
Wednesday, September 12, 2007
New Feature Coming to Sacramento Real Estate Gal!
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4 comments:
Purva,
When will the average list prices get in-line with average incomes?
For example, you wrote the average price of those duplexes was $381,133. Assuming 20% down, that leaves a loan of $304K. Using 4x gross income as the affordability factor means you need an income of $76K. Does the average person is Sacramento earn $76K? I thought the median income in Sacramento was $42K.
(historical underwriting standards: 28 to 33 percent income to housing ratios)
thanks
I'd like to hear your advice for investors. Do you think it makes sense for investors to buy non-owner occupied RE in Sacramento?
If so, what sort of deals make sense to you?
You often say things like "Such and such was such a gret deal. I wish that I had bought it for my portfolio." So back this up with specific deals and/or strategies.
Anonymous,
Maybe never. As long as someone can buy a house at a certain price, that will remain the list price and sold price.
The average person does not shop at Nordstroms, for example, but it's still around.
Sometimes we get all caught up in averages and statistics when really we need to ask ourselves the question of does it make sense to me? If it makes sense to you financially to buy a duplex, go ahead and do it. If not, don't.
But here's what you've missed in your example: Renting the other side of the duplex can add $9600 - $14400 to your annual income.
Bogonflux,
Thank you for your inquiry. I will deal with it in detail next week.
Be sure to check back!
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