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.