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Elizabeth Weintraub
The Fall Sacramento Real Estate Market Update
Say what you will about the down Sacramento real estate market years of 2005 through 2012, but the best thing to hit Sacramento real estate is the fact that period is over. This spring marked the turnaround in real estate. We have a little bit more inventory this fall than we did last spring; however, by all practical standards, it’s still a seller’s market, yet buyers are really the deciding factor. So, is that a seller’s market? Based on inventory alone? I don’t believe so. I believe it’s a buyer’s market disguised as a seller’s market.
You know what I see when I look at this chart? I see twice as many homes for sale and half as many selling. The sold numbers have dropped below the pending sales. But the market is still relatively stable because the pending sales are about the same over the past 15 months. This means buyers have choices.
You can look at what the giant investment firm Blackstone accomplished in Sacramento, buying up some 1,500 homes and turning them into rentals, and you can say that was a bad thing for communities. Now, Blackstone has turned those rentals into securities and leveraged their investments by selling off 75% of its value in the form of bonds to pension funds, or so they say. Hard to know how they are establishing market value. They might have decided that their investments have grown by 25% and are leveraging 100%.
It’s similar to what other investors in Sacramento have done by buying homes supposedly for cash and then converting those offers into hard-money financing. I’ve had to counsel investors that writing an offer for cash when the intent was hard money is not a cash offer. It’s a hard-money financed offer. Cash is cash. I would suggest they include the option in the offer to convert to financing, and many did just that.
Of course now, the investors are pretty much gone. I have a fixer in South Sacramento that has not yet sold and, last spring, this home would have had multiple offers with buyers fighting over it.
Most homebuyers in Sacramento who intend to occupy a home, well, they want that home in turn-key condition. They don’t want to have to make any improvements. Many want their homes to be new or remodeled, with all the bells and whistles.
In closing, I spotted a survey by NAR the other day about the types of things that buyers wanted in a home. Top of the list was energy-efficient improvements. Never have I heard a buyer say that energy efficiency was a #1 concern. I wonder if the utility companies or manufacturers of energy efficient appliances sponsored this survey? Or, maybe they interviewed only buyers from Davis. Nope, Sacramento buyers want those granite counters and stainless appliances. Energy efficiency is welcome, but I doubt it’s a #1 motivating factor.
What it Means to Be a Motivated Seller in Sacramento
It’s not unusual for sellers to ask a Sacramento real estate agent to please tell buyers that they they are motivated sellers. They think that the term “motivated seller” is a code phrase for something important and immensely material to their marketing. I suppose they get this idea because they see the words “motivated seller” in other agent’s listings and think we speak some kind of silent language to each other.
They’re not completely wrong. Agents do engage in conversations with other agents that sound completely foreign to the public. We burn sage and dance naked under full moons, too, but I’m not telling you where. However, the truth is most sellers have no idea what “motivated seller” really means. It doesn’t mean what they think.
First, let’s look at why they think they have to say it. Some sellers believe that even though their home is on the market, some buyers and their agents might wrongly presume that the sellers don’t really want to sell. The reason that buyers and their agents might presume a seller might not want to sell is because the price of that home could be unreasonable or, in some instances, absurd. So, sellers want to assure buyers that they are not unreasonable, they are not absurd, and they really do want to sell even though it might not appear that way because, guess what? They are motivated sellers.
Every seller on the Sacramento real estate market is motivated or they shouldn’t on the market. An agent who slips “motivated seller” into a listing is typically telling other agents in that agent-speak-code that their seller is priced too high and will not reduce the price. It is the agent who is desperate. The agent desperately wants an offer, any offer, even a lowball offer, so they can take that offer to the seller and beat the seller over the head with it until the seller lowers the price.
It could mean the motivated sellers are stubborn, cagey and inflexible. The listing agent might be hoping that other agents will shock the seller into reality.
A motivated seller who is motivated to sell presents his home in the best possible light, and chooses a sales price a buyer is willing to pay. He doesn’t have to advertise that he is motivated because his home listing and sales price will say it for him.
Crooks and Real Estate and the Internet
My husband used to cover criminal courts as a beat newspaper reporter in Chicago, and he says crooks get caught because many crooks are stupid. Can’t say that I know very many crooks, if any, but my personal feelings are if a person is stupid enough to be a crook when the other choice is to not be a crook, it seems likely that the person is stupid enough to make a stupid mistake.
I’m not talking about the people who are starving for a baloney sandwich and nobody will give them any money as they stand begging at the corner of the freeway, so they swipe a loaf of bread from the corner grocery; I mean the guys who would knife you in an alley and grab your wallet, along with your wedding ring. Or, kick in the door of your home and run off with your big screen TV after pulling out all of your copper plumbing.
Speaking of which, another seller in Sacramento just had his AC unit stolen from the yard while selling his home. I mentioned this to sellers yesterday as I listed their home in Elk Grove. Some people install cages over their exterior AC units. But this couple have a neighbor who kind of sounds like Gladys Kravitz, so they will probably be OK. I have neighbors like that in Land Park, and one of them is a retired police officer. There was once a time when you didn’t want anybody poking a nose into your business, but not so anymore.
Which brings me to the point, and I apologize for the long-about way I went to get here, that not only are we dealing with real-life crooks in Sacramento who are in our faces, but we have crooks who run amuck all over the Internet. These people don’t think of themselves as crooks, which makes it even more challenging. However, they swipe content that belongs to the person who wrote it and post it on their website as original content. That qualifies for crookism.
Now, I think it’s bad enough when a Sacramento real estate agent, for example, hires a professional writer to write a blog for that agent, because that’s not what blogging is about and it’s misrepresentation in my book, but it’s a hundred times worse when they intentionally swipe content.
Imagine my surprise this morning when I came across a response in Trulia that was copied and pasted by an agent in San Francisco, and it was my words that this agent swiped. Not only that, but it was my words from a response to another post I made on Trulia. So, he stole the content from the same website that he plagiarized. Where I, the original author, would likely spot it.
I noticed it because I recognized my own words. Most people don’t write like I write. I string phrases together and use certain words in a way that other people don’t. It’s one of the reasons why About.com hired me. I have a unique voice. And when somebody tries to take it from me, I will put a stop to it.
You can’t take photographs or words or articles that you find online and republish them. Everything online is copyrighted, and to reprint, a person needs permission. You can’t just give credit to the person who wrote the piece, either without obtaining permission. Getty Images is suing a real estate agent because she re-blogged (with permission), another agent’s blog (not mine), and the image in that blog belonged to Getty Images.
The moral to all of this blathering is help the hungry, don’t swipe AC units, and don’t steal online material.
Can You Buy a Preforeclosure Home in Sacramento?
Lots of preforeclosure buyers contact this Sacramento real estate agent because I post my goofy-ass face on other real estate websites and often participate in online discussions about homebuying in my spare time. My husband doesn’t understand why I do it. He thinks I should do something else with my free time like going out to dinner or hiking in the foothills or searching the Internet for great airfares to Iceland. But then he didn’t understand why I agreed to be on a House Hunters show about short sales, either.
Most normal people, when they are away from work, focus on other things, stuff that is more fun to them. They lead what is known in some circles as a balanced life. Then there are those of us that belong to that special breed of craziness, those of us who are actually doing a job we completely love to the point that it’s totally fun and not work. We are passionate about our work. If that work also involves short sales, foreclosures and preforeclosures, it’s just that much more interesting.
Any person with reasonable intelligence (and some with less than that) can be successful in real estate and sell a home. Some of us go a step or two beyond because that’s what buyers want from us. They want us to possess the skills to buy a foreclosure, buy a short sale or buy that terrific preforeclosure home they saw advertised on another website for some ridiculously low price.
The problem with that is the pre-foreclosures are not for sale. These are homes made public because the sellers are in default. It’s not that easy to buy a preforeclosure but it can be done under certain circumstances. It’s recognizing those certain circumstances that make the difference.
For most Sacramento home buyers, though, buying a preforeclosure will never happen. That’s because they don’t really want a pre-foreclosure, they just think they do. What they want, what they really, really want is a good deal. That’s not necessarily a preforeclosure.
Why Sacramento Listings Are Withdrawn, Canceled or Expired From MLS
Not to have a single withdrawn, canceled or expired real estate listing in today’s Sacramento real estate market is completely impossible among top producers, yet some websites rank agents by percentage of listings sold. If a Sacramento real estate agent had only two listings a year — and that’s about the number of listings that most agents list — and she sold one and the other seller canceled, the agent would show a 50% ratio, which is really bad.
There are many reasons why a home listing in Sacramento might not see its way to closing, and most of those reasons are out of the agent’s control. Let’s take a look at withdrawn or canceled listings, for example. This is excluding a canceled listing that comes back on the market with a new MLS number to reset the days on market, or is off the market for a spell during a winter vacation or improvement project. Typically, 3 things cause a canceled listing:
- Insanity
- Exhaustion
- Overpriced
Insanity. When an agent deals with a large cross section of the population, she is likely to encounter a few sellers who suffer from sort of mental incapacity. They could be completely psychotic or simply bipolar but not every seller is balanced. Is it the agent’s fault that she doesn’t have time to administer the Minnesota Multiphasic Personality Inventory test prior to accepting the listing?
Exhaustion. This happens more frequently during short sales because these types of transactions take much longer than other types of home sales. If the buyer, for example, drops dead or buys another home (same thing to the seller, basically), thereby canceling, the short sale can start over. There are many reasons for short sale rejection, and sellers need patience to eventually close. Some sellers give up the fight and choose foreclosure.
Overpriced. This is the most common reason for a withdrawn, canceled or expired listing. It is the worst mistake a seller can make, but sellers choose the sales price. When a home doesn’t sell due to price, sellers become angry at themselves and some of that anger ends up hurled in the agent’s direction, too, because who wants to squirm in their own hostility all by themselves? Misery loves company.
There is a guy in my real estate office who makes a very good living by working with withdrawn, canceled and expired listings. He spends all day in a space about the size of a phone booth calling these sellers. Can you imagine his phone conversations? The guy has got to be an armadillo in disguise or a saint, I’m not sure which.
In any case, all of these canceled listings can affect an agent’s percentage performance on some websites, and percentage of listings sold is not an accurate indicator of the agent’s actual performance.
