Sold on Sacramento

Top 10 List of Real Estate Predictions in Sacramento for 2010

1.  Short Sales will continue to be the most viable way out for most underwater homeowners. New regulations will hinder the banks already slow process and what little bit of momentum that we have in getting these things done will stall. Three to Five month will be the norm. Sorry I just can’t lie.

2. Bank Owned REO properties will continue to be metered out to the buying public at a controlled pace. If you are waiting for a flood of REO properties and a double dip housing market keep dreaming. The banks will protect their assets by keeping the inventory short. Three month supply max.

3. Investors will continue to buy up prime rental properties. Savvy investors have realized that we are at the bottom or dang close. As long as interest rates hold around 5-6 % Cap rates should still be favorable for the buy and hold investor.

4. The Tax credit will be extended again. Why would they stop now?  Washington is having too much fun playing God with our economy. Government intervention will continue to prop up the market and provide financing options. The real question is how did Japan’s economic policy work out over the last two decade’s??

5. Mid to High end homes will be hit hardest by defaults and foreclosures as the upper middle class bleeds out. Most Mid to High end homes are owned buy business owners.  Small business is wounded in California. Between our states addiction to money and the declining economy California might just be the worst place to own a small business.  Expect past business owners to close their doors and walk away from it all.

6. It will become “In Vogue “to do a controlled foreclosure by strapped homeowners who feel that banks have done nothing to help underwater mortgages. Heck it might even take place on an episode of Desperate Housewives.

7. First time home buyers will get some amazing deals on homes that they can afford. It is undeniable that with prices where they are at and interest rates low, First time home buyers with solid employment will land their dream home!

8. Mass media will claim that the foreclosure crisis is over. As banks start to extend the mother of all sub-primes (Loan Modification) to homeowners the mass media will claim that the worst has passed. Remember what your Parents said about TV.

9. Commercial real estate will hit record lows as small business retracts. People do not have the money to spend and what little they do have they are saving.  Retail Strips will have large amounts of vacancy and defaults.

10. The reality of the long term period of no to slow growth in the market will hit the general public

Sacramento Homeowners HAMP’ERED

It has been a year since 99% of America became frustrated with the Federal Government and the TARP program. And as sure as the sky is blue it has not done much to help the common taxpayer. It has encumbered the current and future taxpayers with a debt that will take years to overcome.

The silver lining was supposed to be the famed HAMP Home Affordable Modification Program. Well I hate to be the bearer of bad news but this program just might go down in history as the biggest failure of this administration. Why? Because I believe that there are only two facts of this economic downturn that need to be addressed for us to move forward Unemployment and Toxic Mortgages.

Yes, thousands of underwater Sacramento homeowners have submitted the required documents and are in or are awaiting their “Trial Modification Program “. And are now going to be helped by their Banks with the Aid of the Federal Government……………………………………..

Now these homeowners who are having legitimate financial hardship one way or another are supposed to patiently pay a trial payment and wait for their re structured deal. The problem is that no one is getting final modification approval. I talk to no less that a hundred homeowners a week who are genuinely trying to figure out what the best solution is for their underwater mortgage and their family. Many of them have been on trial plans for 6-7 months. Remember these were supposed to be 3 month plans. I have yet to see a single loan re structured in such a way to truly address the fact that these Sacramento homeowners are severely underwater with their current mortgage. And I’m not holding my breath.

If not a modification what is the answer??  That is a tough one. The situation a different for every borrower. You should talk to a professional that can offer knowledge of the different options so that you can make an informed solution. I would recommend getting several opinions. If you have questions feel free to give me a call at (916)332-1292 and we can discuss your situation privately.

Understanding Sacramento’s Mortgage Crisis

While the events that led us to this Housing downturn are somewhat complex this short film does an outstanding job of explaining how it happened. Moving forward I hope that we can address these toxic mortgages sooner than later. The  economic recovery will be dependent on our solution.

http://www.vimeo.com/3261363

Fast Friday Snapshot of Sacramento Real Estate

Week of November 20, 2008

This is the first of a weekly market snapshot for Sacramento Real Estate.  In the coming weeks I hope to bring you the fast facts driving the Sacramento Real Estate Market by bringing you the market statistics in an easy to understand format.

Distressed properties are still the driving force in our market and I expect them to be for the next several years. Currently the Sacramento Housing market remains  very active at all price points up to 350K.  Above 350K is certainly moving as Buyers at this price point and above are snatching up some tremendous bargains on distressed properties. We have an 2.0 month supply of homes in the marketplace. A stable real estate market is considered to be a 6-7 month supply. For the last several months Buyers have struggled with the fact that there are multiple offer situations on available properties. Our current market is short of inventory, I do not expect this to change since the number of foreclosures continues to be slowed down by the various government and bank programs. Affordability is certainly back in our marketplace, it is anybody’s guess where the market will go from here. Unemployment will be the driving force in the economic recovery.

California Unemployment Rate :  12.5 % (  Ten Year High )

30 Year Mortgages Rate: 4.875 %

	1 month			1 year			15 months
	Sep 09	Oct 09	% Change	Oct 08	Oct 09	% Change	Aug 08	Oct 09	% Change
For Sale	3243	3325	2.5%	8038	3325	-58.6%	8280	3325	-59.8%
Sold	1642	1634	-0.5%	2154	1634	-24.1%	1949	1634	-16.2%
Pended	2286	2395	4.8%	2236	2395	7.1%	2244	2395	6.7%

Sacramento’s REO ” Shadow Inventory “

I have been missing in action from my blog for some time now. For the last 6 months I have been working more than full time and an active auction investor. It is a great time to be an investor and I have been enjoying the challenge.  Let me assure you that it is a challenge, every day.  I’m telling you this because I happen to know the secret behind the ” Shadow Inventory “…………………………………………………………………………………

Were you waiting for the secret ? Almost all Sacramento Buyers Agents and the Buyers that have been beat up and abused by this market, talk about the “Shadow Inventory”. This is the inventory believed to be waiting on the banks books to be released to market. It is commonly believed that thousands of distressed properties are out there. Buyers everywhere are sharpening their knives and preparing for the REO feast, and the poor banks that will have no other option than to sell them for pennies.

Sorry to keep you waiting. I have terrible news for you, there is no shadow inventory. That’s right no shadow inventory. Right now the banks are holding about 4 months worth of inventory here in California. It takes them on average 7.5 months to process an REO property. That means that the REO inventory will be fully disposed of by next spring.

Why ? The flood of REO’s has been plugged up and partially salvaged buy the various government programs and the Loan Modification programs. I wont get into those topics in this article but they have significantly slowed down the number of foreclosed properties. At this point I expect that we will see the number of REO properties made available to be less than consumer demand here in Sacramento.

The Sacramento home buyer currently serious about finding a home will need to be aggressive once they locate the right property. All of my listings are receiving multiple offers and typically the best offers are well above the asking price. The way the offer is structured is more important than ever. Your choice in lenders could be your most critical decision. I highly recommend finding an Agent that is up to speed with the current market and has a team of professionals that can make the deal happen.  If you would like to talk to me about successfully buying or selling in the current market feel free to give me a call at (916)332-1292.   Thanks, Nate

A Second Wave of Foreclosures for Sacramento

Over the last year we have seen a turbulent housing market and economy. The Sacramento marketplace has been slightly insulated due to the fact that the Capital city has such a large number of State and Federal workers with stable streams of income. As you recall I wrote about the state stepping in back in October and putting a 90 Day a moratorium on foreclosures. Shortly after that we had our general election of our new President Barack Obama. He has been putting his pen down on countless bailouts and economic stimulus plans and as a result the banking market has been in a holding pattern. Until Now!

Tracking the statistics (Yes, I am a closet Engineer) I am startled by the number of Notice of Default and Notices of Trustee Sale. It is climbing and fast. I am looking at the data as a sign that the Sacramento REO market will remain soft through the summer. The number of NOD’s is at 2,426 and the number of NTS’s is at 1,105. There is one statistic that leads me to believe that we will start seeing less REO properties moving forward. The ratio of NOD to NTS is down 46% today Vs 71% a year ago, that matches the fact that banks are working with some homeowners to keep them in their homes. If you are an investor or first time homebuyer that is on the fence id suggests that you look hard at buying. Each Sacramento region is different but overall prices have just taken another bump down, and interest rates are great. Combined these favorable terms with an $8,000 Tax rebate and you have a tremendous opportunity.

But Nate It is sure to go lower?

We simply do not know where this market will rebound or decline. I just put a property into contract this week in Bohemian Village for $75.00 Per SQ. FT.  ! ! ! Call any Contractor and ask what it costs to build an average home. I think you will be surprised that the cost to build exceeds the cost of most REO properties.

If you would like to discuss the Sacramento foreclosure market and how it affects your real estate decisions feel free to give me a call at (916)332-1292.

 

11967 Prospect Hill Drive. Gold River CA 95670

This great Gold River property just had a price reduction to $ 399,800.00. It is priced to sell and represents one of the cleanest properties in Gold River.

Please enable Javascript and Flash to view this Viddler video.

If you were wondering how the price compares to recent data in Gold River. Check out the Lundquist Appraisal Gold River page. I have found his data to be revealing of what the market is doing in specific markets.

If you would like to see this home or other homes in Sacramento please feel free to give me a call at (916)332-1292.

Sacramento Real Estate Investors Golden Pencil

Does that property pencil??

The Sacramento REO market a brought a keen group of buy and hold investors to town. Locating and purchasing an investment property can be complex, or it can be really simple. Depending on your plans and how many properties you intend to hold in your portfolio, you goals will differ.

Some of my clients simply want to buy a property that is distressed and damaged, bring in a crew rehab and hold it for maximum cash flow. Others are looking for higher end properties that are likely to appreciate faster on the next Real Estate cycle. The state of the economy and the direction of the current administration have some investors convinced that Section 8 is the ticket.

Regardless of what you long term goals are you will want that property to pencil. I use spreadsheet and software system to analyze the property. We can quickly adjust numbers to reach your goals. For example if you would like to reach a certain Cap Rate on a property we can use the numbers that are known and likely to be unchanged to determine the right purchase price.

There is a great amount of opportunity in Sacramento right now. We are expecting the banks to release more inventory this month. If you would like to join my preferred buyer’s network feel free to give me a call at (916)332-1292.

6706 Palm Ave. Fair Oaks, CA 95628

This is the hot property of the week! 6706 Palm Ave. Fair Oaks, CA 95628. This 3 bedroom, 2 bath house is in great shape. This one is not a REO or Short Sale, Listed at $189,000 it is priced right. This is a beautiful move in ready property close to Will Rodgers Middle School and Del Campo High School.

I cannot stress how clean this property is. If you would like to view this property or others I would be happy to assist you. Give me a call at (916)332-1292. Have a great weekend, Nate

Sacramento Schools and Real Estate Purchase

As a Sacramento area buyers agent I am aware of how important school scores are to young families. In real estate the old adage of “Location, Location, and Location” is still true today. However today we have to look at the entire package that comes with a property’s location. That includes schools and the community.

My cousin is the definition of super mom. She looks after her young kids and is highly aware of all of the factors that affect their education and upbringing. I was showing her some properties in Orangevale the other day and I asked her how she knew so much about each school. She was a walking encyclopedia knowing all about test scores, athletics, class size, and population. I was amazed that she had such a handle on vital statistics. So I had to ask where she was getting all of her information. She sited one resource that I have to share with you, GreatSchools.net

Great Schools highlights Sacramento area schools.

Great Schools has been at the top of the list for web sites that compile school data. They have an easy to follow layout and back up statistics with state averages so that you can get an idea of how the school looks from a statewide perspective. Great Schools won The Webby Award in 2007 for people’s voice.

If you are a young family thinking about buying real estate in the Sacramento area I would love to help make your dreams a reality. The market is great for buyers and interest rates around 5% have been common lately. Feel free to contact me at (916)332-1292.