New Listing - 3052 8th Avenue, Sacramento, CA 95817

Adorable 3 bedroom, 2 bathroom, 1,148sf home on .14ac near Curtis Park. You will love the modern amenities amongst the vintage charm! Offered at $239,900, subject to lender approval of short sale. For more photos and additional information, please visit 3052 8th Avenue, Sacramento, CA 95817.

Rent vs Buy a home in Sacramento...what makes the most financial sense?

The last couple of years around this time I have written blog posts detailing the monthly mortgage payments vs. average rent payments in certain neighborhoods in Sacramento. I thought I would start 2013 with a similar post, updated with today's interest rates, average Sacramento home prices, and average rents.

My phone has been ringing off the hook for the last few weeks. Who has been calling me? Prospective home buyers who finally have decided that now is the time to buy a home in Sacramento. In many areas, it is currently more affordable to buy a home in Sacramento than rent a home. Or in a similar vein, because renting is more expensive than owning -- some calls are from investors looking for cashflowing income properties. I have also received calls from several potential sellers who see this uptick in the market as a sign that it is an opportune time to sell and buy a larger home. Prices are slightly up from last year -- but still extremely low as compared to the market peak, and rents seem to have increased. If you don't believe me -- just compare this data to a similar post from around this time last year.

When you take into consideration the average home price and probable monthly mortgage payment in particular Sacramento neighborhoods vs. the average rent, often times the mortgage payment is less. Plus often times the 'average' home that is purchased is much larger or nicer than the 'average' home rented. Let's take a look at a few different areas...just for the sake of citing my information sources, for average home price (used to calculate mortgage payment scenarios) I am using most recent December 2012 Trendgraphix data, which is taken directly from MLS, and for average rent I am using the most recent Q4 2012 Homepointe Quarterly Residential Rental Survey. For my mortgage payment calculations, I am basing it on a 3.75% interest rate (which is actually slightly above today's average market interest rates), and including the full PITI - loan principle, interest, monthly property taxes, and monthly homeowner's insurance (and mortgage insurance where applicable).

Natomas - 95833, 95834, 95835
Average single family home sale price: $221,000
Average rent for a 3 bedroom home: $1,319
30-Year Fixed VA Loan (Zero downpayment): $1,340
30-Year Fixed FHA Loan (3.5% downpayment): $1,521
30-Year Fixed Conventional Loan (10% downpayment): $1,318
30-Year Fixed Conventional Loan (20% downpayment): $1,113

Elk Grove / Laguna - 95757, 95758
Average single family home sale price: $254,000
Average rent for a 3 bedroom home: $1,432
30-Year Fixed VA Loan (Zero downpayment): $1,540
30-Year Fixed FHA Loan (3.5% downpayment): $1,748
30-Year Fixed Conventional Loan (10% downpayment): $1,515
30-Year Fixed Conventional Loan (20% downpayment): $1,279

Rosemont / College Greens - 95826, 95827
Average single family home sale price: $181,000
Average rent for a 3 bedroom home: $1,235
30-Year Fixed VA Loan (Zero downpayment): $1,097
30-Year Fixed FHA Loan (3.5% downpayment): $1,246
30-Year Fixed Conventional Loan (10% downpayment): $1,079
30-Year Fixed Conventional Loan (20% downpayment): $912

Arden - 95821, 95825, 95864
Average single family home sale price: $257,000
Average rent for a 3 bedroom home: $1,308
30-Year Fixed VA Loan (Zero downpayment): $1,558
30-Year Fixed FHA Loan (3.5% downpayment): $1,769
30-Year Fixed Conventional Loan (10% downpayment): $1,533
30-Year Fixed Conventional Loan (20% downpayment): $1,294

Carmichael, Fair Oaks - 95608, 95628
Average single family home sale price: $283,000
Average rent for a 3 bedroom home: $1,478
30-Year Fixed VA Loan (Zero downpayment): $1,716
30-Year Fixed FHA Loan (3.5% downpayment): $1,948
30-Year Fixed Conventional Loan (10% downpayment): $1,688
30-Year Fixed Conventional Loan (20% downpayment): $1,425

Citrus Heights, Orangevale - 95610, 95621, 95662
Average single family home sale price: $197,000
Average rent for a 3 bedroom home: $1,305
30-Year Fixed VA Loan (Zero downpayment): $1,194
30-Year Fixed FHA Loan (3.5% downpayment): $1,356
30-Year Fixed Conventional Loan (10% downpayment): $1,175
30-Year Fixed Conventional Loan (20% downpayment): $922

South Land Park, Pocket / Greenhaven - 95822, 95831
Average single family home sale price: $222,000
Average rent for a 3 bedroom home: $1,318
30-Year Fixed VA Loan (Zero downpayment): $1,346
30-Year Fixed FHA Loan (3.5% downpayment): $1,528
30-Year Fixed Conventional Loan (10% downpayment): $1,324
30-Year Fixed Conventional Loan (20% downpayment): $1,118

Obviously there are other tangible and intangible benefits to home ownership as well...for example, a tangible benefit is the fact you can write-off your mortgage interest on your income taxes, and also deduct some other related expenses each year. An intangible benefit might be that as a homeowner, you have the freedom to paint the walls, decorate, plant a garden, remodel, etc.

So clearly these numbers are just a baseline to give you an idea of housing affordability in certain areas. You definitely need to consult a loan officer to see what type of financing is the best fit for you, and ultimately just how much you can afford - and there are several variables that will affect your interest rate and terms. You should also speak with a CPA or qualified tax professional regarding the mortgage interest and other tax deductions to see how it will affect your particular situation. If you need a good referral to either one, feel free to contact me and I can put you in touch.

New Listing - 2336 Rudat Circle, Rancho Cordova, CA 95670

Delightful 4 bedroom, 2.5 bathroom, 2,098sf home on .153ac lot with built-in swimming pool in Rancho Cordova! You will love this light and bright home that boasts a wonderfully remodeled kitchen and bathrooms. The pool and jacuzzi will be perfect for when the weather warms up. A whole house fan, dual pane windows and many other extras make this a great buy for such a well cared for home. Offered at $235,000 subject to lender approval of short sale. For more photos and additional detail, visit 2336 Rudat Circle, Rancho Cordova, CA 95670.

New Listing - 1152 Theo Way, Sacramento (South Land Park Terrace), CA 95822

Charming 3 bedroom, 2 bathroom, 1,443sf home in South Land Park Terrace on a large .23ac lot! You will love the wood flooring, updated kitchen with newer appliances, ceiling fans throughout, separate family room/den area, covered patio, and large backyard. Don't wait! Offered at $269,000 subject to lender approval of short sale. For more photos and information please visit 1152 Theo Way, Sacramento, CA 95822.

FannieMae and FreddieMac announce a few changes involving buyers and sellers of short sales...

Fannie Mae and Freddie Mac have announced the following key changes for all parties involved in a short sale. These changes apply to all Fannie Mae and Freddie Mac short sales, with an offer and without an offer. (To find out if you have a loan backed by Fannie Mae or Freddie Mac, click here. No matter which mortgage company(s) you make your payments to, your odds of having either a Fannie Mae or Freddie Mac-backed loan are pretty high.)

Title Transfer requirement change:

• The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.
• After a 30 day period, and until 90 days from the date of the deed, the buyer is further prohibited from selling the property for a sales price greater than 120% of the short sale price.

This applies to ANY buyer, not just an all-cash investor buyers. And the restrictions will run with the property. So investors looking to flip property -- there will be a deed restriction that pops up on your preliminary title report when you go to sell. You will not be able to get around this...so if you want to flip these properties for a profit of more than 20% you will have to wait until day 91 after the change of ownership to enter into contract to sell.

Here is their example on how to calculate the 120%:
-Purchase Price is $100,000.00
-120% of the purchase price would be $100,000.00 x 1.2 = $120,000.00

Relocation Assistance changes: The borrower/seller may be entitled to an incentive payment of $3,000 from Fannie Mae / Freddie Mac to assist with relocation expenses following successful completion of a short sale unless:

• The borrower/seller is required to contribute funds or execute a promissory note (this would be HIGHLY unlikely in California since legislation has prohibited that practice).
• The borrower has Permanent Change of Station (PCS) orders and receives a Dislocation Allowance (DLA) or other government relocation assistance.
• The servicer has knowledge that the borrower is receiving relocation assistance from another source other than the servicer. If the borrower receives relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer, the difference in the relocation assistance amount up to the $3,000 incentive maximum may be provided. If the borrower will receive relocation assistance from a source other than Fannie Mae / Freddie Mac or the Servicer and the amount is equal to or greater than $3,000, no relocation incentive will be provided.

Big fun in the ever-changing world of short sales! As an agent who lists a lot of Sacramento short sales, I keep up with all of these changes...

Bank of America -- no longer will delay foreclosure for a "Cooperative Short Sale"...

Just received this notification via email from Bank of America regarding their "Cooperative Short Sales" program:

"As of January 15, 2013, there will no longer be a temporary foreclosure hold during the Cooperative Short Sale property marketing phase. We may begin or continue the foreclosure process up until a submitted offer to purchase the property is approved by all relevant parties.  Any existing short sale will not be impacted by this change."

So, again, I can't emphasize to you enough that anyone considering a short sale should be pro-active and do not wait until the last minute (like once a Notice of Trustee Sale has been taped to your front door) to start your short sale. Bank of America will not delay a foreclosure in order for a short sale seller to start the process and market the home.

Sacramento County Median Home Price has Increased 20% in the Last Twelve Months in 2012...

Well...If you have been following my blog for a while, or are friends with me on Facebook or Twitter -- then you will already know that I over the last year I have been reporting some substantial changes to our Sacramento real estate market.

In past posts about the market dynamics and statistics, I have noted a decrease in the number of homes for sale on the market, and a huge increase in buyer demand.

Well you don't have to be an economics professor to know that a decrease in supply and an increase in demand will drive prices up. As I mentioned in an article I wrote for the "Masters Club" section that appeared in the Sacramento Bee and in Sacramento Magazine in May of 2012 -- the bottom of the Sacramento real estate market had passed. This graph should provide anyone in doubt some pretty concrete evidence that this is true. According to data in Metrolist MLS, in the last 12 months ending in December 2012, the median home price in Sacramento County has increased nearly 20%.

Now is a phenomenal time to sell (even if you must do a short sale). I'm experiencing multiple offers on all of my listings, which is definitely placing sellers in the driver's seat of the transaction; generally buyers are more willing to pay more, they tend to try to negotiate fewer repairs, and release contract contingencies sooner.

New Listing - 8020 Walerga Road, Unit 1016, Antelope, CA 95854

Classy updated second level condo in gated Antelope community - 3 bedrooms, 2 full bathrooms, and a private balcony with additional storage. You will love the remodeled kitchen with granite counters, separate dining area with breakfast bar, vaulted ceilings, spacious living room with fireplace, and ceiling fans throughout. Fresh paint, newer carpet, vinyl flooring, newer HVAC & water heater make this home move-in ready! Convenient to schools, parks, shopping, & freeway access. Don't wait! Traditional sale offered at $109,990 (HOA dues are $209/month). For more photos and information, please visit 8020 Walerga Road #1016, Antelope, CA 95843.