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.

Oh, baby!

While this is not the good news I was referring to in my earlier post, it certainly beats everything else right now! Yes, that's my (as yet) unborn daughter and I'm so thrilled to share the news with everyone. Will she be another Realtor and take over the family business? Hmm... who knows?

Are we looking at a future mogul? (mogulette?)

Have I Forgotten the Landlords?

Nope. In fact, Im spending the day working on that Landlord e-book I promised to get out this year. I'm still very excited about it.

I might even have some great news about it this week!

Sacramento Condos for February: the Numbers

Median price actually rose for Sacramento condos in February 2008. Yes, that's right - it rose. And even though this might be seasonal, I'll take my good news wherever I get it. So there.

Median price for condos in Sacramento was up 18.9% from January to hit $170,000.

Pending sales were higher as well at 116 over January's 93. Solds were at 59.

There are two things that stick out at me as I look at these numbers: For one, the number of pending sales do not equal the number of solds the following month. With the huge gap between the two, it makes me wonder if it is just the short sales that aren't going through that show up pending every month and cause problems with the stats, or if it really is people changing their minds. Too much choice can be pretty disconcerting for a lot of otherwise happy home buyers.

The second thing that I notice that is actually good news is the number of houses entering the market every month has dropped. If you looked at the numbers for single family residences in Sacramento posted Friday, it told the same story. For condos, new active inventory has dropped by 16.1% to 163 units in February.

That brings the Sacramento condos inventory to 11.9 months of inventory, lower than last month's 18.7 months'.

Can't get enough of the numbers? Read January's numbers; December's condo numbers, November's condo numbers.

Is there a condo you need to get sold? Click here to contact me or get a free market analysis.

Sacramento Real Estate Statistics for February: Single Family Market

Yesterday I wrote about how pending sales are higher all over the country and the National Association of Realtors expects a housing recovery beginning in sometime late 2008. Nice to know some of the statistics from Sacramento county tell the same story.

The latest numbers from the Metrolist MLS for the month of February:

The median price has steadied, it seems, at least for this month - $255,000 it remains, the same as January's median price.

2155 new listings were added to the market and 864 sold, pushing existing inventory to 8749, a smaller number than January's 9042 actives. This brings existing home inventory to about 10.1 months, down from last month's 11.9.

Here's another caveat, however. Pending sales were higher again - a total of 1474 houses went into contract in February - 21% more than January's pending sales, which were already higher than December's. I hear rumbling underneath the surface! If all these pending sales go through inventory numbers could look very different next month!

Also read: January's numbers; December's numbers, and November's numbers for Sacramento real estate.

Foreclosure Article

I've been telling you for a while that fear in the real estate market is driving a lot of people to run to the safety of their (rented) homes. Instead, read this article and decide for yourself if the foreclosure crisis is overblown.

If your home rose in value 53% in the last five years, really, do you have to worry quite so much?

New FHA Loan Limits for Sacramento Released

Just in:

New (increased) FHA loan limits for Sacramento

One-Family $580,000

Two-family $742,500

Three-family $897,500

Four-family $1,115,400

Check your area here.

Good News for Sacramento Real Estate?

Pending sales are up, which means more buyers are out looking at homes.

Could this be good news on the horizon for Sacramento?

First-time Home Buyer Mistakes: the Deadly Three

First time home buyers, as hard as it may be, try and stay away from these three cardinal mistakes I see repeated over and over again. These three mistakes are deadly to your home shopping and home buying experience partly because they can make you want to run to the comfort of your (rented) apartment, even if you have fully decided to buy a home this year.

Mistake #1: Looking for the Perfect Home
There is no such thing as the perfect home. Yes, you may quote me on that. In the years of homeownership myself and selling houses to others I have reached this one conclusion that there is no such thing as perfect. When you are searching for houses all you will get is good enough. It is what you make of it that makes it perfect.

Now I know there are some people that will walk into a home and know that it is absolutely the one they want. "It's perfect!" they might even say. But I contend that what these clients see is the home as it will become when they have moved in and had their way with it. No pun intended.

Mistake #2: Having too Wide a Scope
My first client to whom I showed a lot of homes, but didn't sell one because they got frustrated, looked all over Sacramento for houses. They went from Elk Grove to Folsom to midtown Sacramento and liked all the homes equally. Unfortunately, this was also at the time when houses were being snapped up in a day and they didn't get any of them. The problem was they liked all the homes equally - not doing enough research into the neighborhoods involved creates such a situation.

Unfortunately in today's market this problem is magnified. With all this choice and a great many homes to look at, home buyers just seem befuddled. They would like to live in a certain neighborhood they've been watching for a while but what if there's a better one out there? So they search and search and the home search itself becomes the end of their journey. Yes, there really is such a thing as too much choice.

Mistake #3: An offer that is way too low
Say you've skipped over the first two (lucky you!) and found the home you're looking for. Now comes the decision - what do we offer? Beware of mistake #3 - making an offer which will immediately get rejected as frivolous.

This is also a symptom of today's market. With prices falling / having fallen in many areas, the focus seems to be on how big of a discount on the asking price one can get. The focus should be on how much value you are receiving from the purchase. But getting sidetracked has cost many a good home. Once you have offered a low price, you are more likely to justify your offer and less likely to see the house objectively.

So happy hunting! And steer clear of these Deadly Three. If you do, you'll have done the almost impossible: bought a very inexpensive house in a buyer's market.