Monday, January 14, 2019

Quoted in a Sacbee article about the 2019 Sacramento real estate market forecast...

I was quoted in a Sacramento Bee article this weekend - Tony Bizjak interviewed a panel of Sacramento real estate experts including myself, appraiser Ryan Lundquist, and a few others to get our thoughts on the 2018 market and what we foresee for 2019.

I was not surprised to see that our answers were all fairly similar. And none of us predict that our market is in a "bubble" right now. That seems to be a popular question right now after increasing home prices for the last several years, since the bottom of the market in 2011.

I hate being asked the "are we in a bubble" question because I think most people associate the word bubble with what happened in the real estate market back in 2005-2007 when the real estate market literally exploded and the bottom dropped out of home prices. I do not believe we will experience a situation similar to that era anytime soon. The longer answer is a little more complicated. 

I think psychologically, a lot of people see that home values are approaching where they were in 2005 and fear a bubble. While it seems like yesterday, that was over 13 years ago! According to Trendgraphix, Sacramento County's median home price at the peak of the market in August 2005 reached $395,000. December 2018's Sacramento County median home price is $365,000. The reality is that the value of money changes over time, and when adjusted for CPI inflation, Sacramento's median home price would have to be approximately $507,000 today to be equivalent to the 2005 peak. When I earned my masters degree in public policy, the concept of adjusting for inflation and making values equal in today's dollars to be able to compare apples to apples was really beaten into us. I think this idea is absent a lot of analyses that I see.

Part of the run-up in prices from the previous peak was fueled by bad lending products like stated-income (non-qualifying) zero-down, interest only, or negative amortization loans. Those previous buyers hyper-extended themselves and could not actually afford those homes, and when the market declined many had to short sell or were foreclosed. We actually do not have those artificial lending products anymore, and buyers have to qualify for loans. Your average buyer today can not get a loan without verification of income, assets (for a 3-5% downpayment at a minimum), good credit, income and/or employment. Generally with unemployment rates low, interest rates still relatively low (and having dipped a little in the last month), and home prices still relatively affordable for California, I just do not foresee a bubble. And when the market does eventually decline -- because prices can not go up forever, and someday it will -- we will not have the same hyper-extension and level of buyer default that added gas to the fire before.

What I think we do need to be aware of is that incomes have not risen commensurately with sales prices, and we are likely approaching a saturation point where affordability becomes an issue. I believe that this is what will lead to stagnation of home values in Sacramento. But not a bursting bubble. There was an article this week in Comstock's Magazine that is a pretty good read that reviews the history of past real estate cycles. It is interesting to note that in past market cycles, the bottom did not drop out of prices the way it did during the Great Recession. Anyway, I am off to a super busy 2019 and I look forward to a solid year of helping both home buyers and sellers.

Friday, January 11, 2019

A great start to 2019 - honored by the Sacramento Association of Realtors for my work in real estate advocacy...

It's nice to be recognized for my efforts, and last night at the officer and directors installation event at the Sacramento Association of Realtors I received an award for my efforts in political affairs. I imagine this is due in large part to helping orchestrate association's the "Yes on 5, No on 10" campaign locally during the election cycle, among other activities I help with as a member of the board of directors for the California Association of Realtors. I do not think many people are aware, but the Realtors associations are among the only advocates for private property rights and homeownership. I love being involved in our advocacy endeavors. Onward!

Tuesday, January 1, 2019

2018 - review of my real estate transaction statistics and how I compare to Sacramento market averages...

I ended last year with a bang, and had a busy start to 2018. I can't believe the year is over already! And what a year it was...it was one of my busiest years ever in my 13+ years in Sacramento real estate and did so while finishing my master's degree.

I like to track the statistics of my transactions, and toward the year end I always reflect on what I have done, how I compare to the rest of the agents in the market, and how I can improve. So as a follow up to my similar post last year, I thought I would publish some statistics and my thoughts on the coming year. Keep in mind, I am not a part of a "team" and this is all my own production. This year, all of my transactions are in Metrolist MLS, so this information is easily verifiable (although one sale was erroneously attributed to me that is not included in here)...in 2018:

-I closed 36 transactions and closed $14,473,000 in volume. My lowest transaction was $190,000, and my highest transaction was $749,900. The average was $402,028 and the median was $376,050.
-41.67% of my transactions were past/repeat clients (which is amazing to me!) 58.33% were new clients.
-94.4% of my transactions were residential properties (condossingle family homes), 5.6% were multi-family properties (duplexestriplexesfourplexes), and 0 were other (commercialland).
-58.3% of my transactions I represented the seller, while 41.61% of my transactions I represented the buyer.
-My typical residential listing sold for an average of 100.56% of its original listing price (meaning, 0.56% over the original listing price) in just 17 cumulative days on the market. The distinction of original and cumulative is important...original means even after a price reduction from the initial listing price, and cumulative means even if a property is re-listed or comes back on the market.
-My typical multi-family listing sold for an average of 108.7% of its original listing price (8.7% over the listing price) in just 2 cumulative days on the market.
-My typical listing had an average of 4.14 buyer offers on it! (For further disclosure though, one listing really skewed this statistic and had 23 offers on it alone...removing that one, then it becomes an average of 3.2 buyer offers)

Comparing my production statistics to the overall Sacramento real estate market averages, my clients and I had another stellar year.

For one, to qualify for the Sacramento Association of Realtors Masters Club, a realtor must close $5M in transaction volume and a minimum of 8 closed transactions. Clearly I blew those numbers out of the water. I would guess that with 36 closed transactions and nearly $14.5M in volume I am likely in the top 1-2% of all agents in greater Sacramento.

My clients are all over the spectrum from first-time buyersmove-up buyers (those who sell their home and then purchase another home), investors, sellers of property they inherited via a trust or probate, sellers retiring and moving out of the area, sellers divorcing, etc. My average and median transactions at $402,028 and $376,050 are basically in line with the average and median home prices in the Sacramento region according to Trendgraphix data. My high and low range indicates I work with a broad economic client spectrum as well, from those working with downpayment assistance to those among top-income earners in the region. I closed just one short sale listing in 2018, and I also did list one foreclosure/bank repo. Distressed properties are a very small part of the marketplace right now though 5 or so years ago they were the bulk of my transactions.

My listing statistics are also excellent...according to Trendgraphix for Sacramento County, the lowest average days on market for a single family listing in the last 14 months was 23 days on market (with a high of 41 days on market), versus my listings at 17 cumulative days on market. My original listing price versus final selling price ratio is also outstanding as my listings sell for 100.56% above original listing price on average, versus the highest month of the last 14 months at 100% (lowest at 96%). I think these numbers are indicative of my strategic approach to listing property -- complete with pre-listing inspectionsstagingrepairsprofessional photography3D virtual tours, TV ads, and multi-faceted marketing.

Comparing 2017 to 2018, the market went from crazy nuts to a little more balanced between buyer and seller. This, as far as I am concerned, is a welcome change and brings a slightly more equitable transaction between buyer and seller. Sellers need to price according to the market, and buyers won't have to offer their first born to actually have their offers accepted.

 It is a good thing for buyers not to be faced with such intense competition from other buyers -- though don't get me wrong: properly marketed, appropriately priced, good homes still sell with plenty of competition and offers.

Of course I hope to improve these numbers this year in 2019...so we shall see how that shapes up! If you think we would be a good fit to work together toward your next property sale or purchase, I welcome your contact via phone or email.

Thursday, December 27, 2018

Quoted in a Robb Report article today about the new California mandate for new construction homes to have solar panels...

I was quoted in a Robb Report article today about the new California mandate for new construction homes to be built equipped with solar panels. Renewable energy sources and energy efficiency are great things, and California is definitely leading the way and setting a new standard in the US.

All policies have impacts though, and when California generally also leads the nation with the highest median home prices (statewide median home price is over $550,000 and $365,000 in Sacramento as of November 2018), imposing a requirement to install expensive solar panels on every new construction home in the state could lead to higher home prices as builders look to recoup the extra costs of solar arrays.

The market may very well be able to handle a $10,000 - $15,000 increase in a new home's price. However, If the market cannot handle price increases from the additional costs of solar on new homes (e.g. fewer people buy those homes - perhaps buying less expensive resale homes instead, new home prices decrease, etc.) it may drive builders out of the state to build elsewhere. There are other states with fewer of these mandates, and Texas, Arizona, and Idaho for example are all experiencing building booms. We shall see in the coming years if this has an impact on the volume of new housing construction in California. 

Monday, December 17, 2018

REALTORS® awarding housing assistance grants to homeowners and renters affected by the Camp, Woolsey, and Hill fires...

Thanks to a generous donation of $1 million by National Association of REALTORS® Relief Foundation, as well as California Association of REALTORS®, other state and local REALTOR® associations (including Sacramento), and other contributors, C.A.R. is awarding housing assistance grants to homeowners and renters affected by the Camp, Woolsey, and Hill fires. Households can apply for up to $2,000 to provide assistance with mortgage relief or temporary housing, such as payments on the mortgage of a primary residence that was burned in a fire, lease, or rent payments on replacement housing, or payments to a temporary shelter.

If you or know anyone who has been affected by the fires and would like to apply for a grant, please apply online here or email disasterrelief@car.org.

Friday, November 30, 2018

In the Top 2% of over 50,000 NRT Agents Nationally!

It’s not everyday I get a letter from the President/CEO of the company with congratulations for being in the top 2% of over 50,000 agents nationally. Cheers to another busy year ahead!

Thursday, October 25, 2018

New Listing - 1710 27th Street, Sacramento, CA 95816

Here is your chance to live in a stunning 2 bedroom, 2 bathroom, 1,337sf remodeled home in a highly-sought Midtown Sacramento location! You will love this bungalow's light and bright open layout, hardwood floors, formal dining room, classic built-in hutch, remodeled kitchen with quartz counters and custom wood shelving. It offers an amazing master suite with a walk-in closet, an impressive en-suite bathroom with dual sinks, quartz counters, and a walk-in shower. Enjoy a quaint backyard with lots of sunny space for your garden. It features a freshly painted interior and exterior, newer roof, newer dual pane windows, central heating and air, and a partial basement. This is a sensational location within close proximity to all that midtown has to offer including the R Street Corridor, Winn Park, light rail, breweries, bakeries, coffee, wine tasting, grocery shopping, downtown and more! Don't wait! Offered at $549,900. For more photos, 3D virtual tour, and information please visit 1710 27th Street, Sacramento, CA 95816.


Tuesday, October 23, 2018

Tips for storing items in your home while preparing to sell...

When I meet with potential home sellers, frequently sellers ask me how best to prepare the home for photography and showings. Often, sellers are inclined to remove belongings from the home and just cram every closet full of stuff. Or they throw everything into the garage or the basement. While this is an adequate solution to thinning out what is inside the home, homeowners must be strategic and intentional about how items are stored. While readying the house for photography and showings is super important, filling every spare nook and cranny in your home can really hamper a buyer's ability to do inspections or appraisal. So here I offer a few tips when it comes to storing items.

Tip #1: If filling your garage or basement with items, arrange things neatly in the center of the space. If you stack things up against the walls, you create "inaccessible areas" for termite and home inspectors. Most astute buyer's agents will request you make these areas accessible visually and physically, so if you pile boxes and furniture up against the walls, you will end up creating more work for yourself and just have to move items again later. If you arrange things neatly in the center with an accessible walkway around the perimeter (like in the photo), this is the best way to leave the garage or basement accessible for inspection.

Tip #2: If filling closets, be sure not to stack items on top of a crawl-space access door. Often in homes with raised foundations, the access to the crawl-space is in the floor of a closet. Termite and home inspectors must be able to have access to the sub-area of the home. Depending on the buyer's loan type, appraisers need crawl-space access too. So please do not send everyone on a hunt for access to the underside of the home by covering it. Inspectors and agents will not move items from a closet to create accessibility.

Tip #3: Again, if filling closets, be sure not to block attic access doors. Often, attic access doors are also in closet ceilings and sellers tend to stack items so high that the attic door is blocked. If there is an upper shelf installed blocking access to the attic door, you should remove it to provide unobstructed access. Again, inspectors and some appraisers will need access to the attic.

Tip #4: Have a garage sale and get rid of items! Selling and moving can be a great time to purge unused or unwanted items. Rather than stash things in the garage or closet, if you have time on your side have a garage sale so you don't end up storing or moving stuff you won't use.

Tip #5: Get a storage unit. You will need to pack things up to move them into your next home anyway. I know, I know...you aren't excited to move things twice. But you probably have a friend with a truck who can help you remove things from the house completely. I have a truck and occasionally have helped my clients relocate items as well. Just sayin'.

Most people do not roll out of bed one day and decide to sell their homes, so with a little planning and strategy you can make things easier on yourself...