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Elizabeth Weintraub
The Shock of 12 Months: April 2018 Sacramento Real Estate Market
Once upon a time in a faraway land known as Sacramento, a potential home buyer dreamed about the April 2018 Sacramento real estate market. The year was 2017 and the month, April. Last year. In the April 2017 Sacramento real estate market. This buyer said to herself, I should buy a home in Sacramento, but oh, my, the prices are so high. Why, the median sales price is $326K. The days on market are 22. Not enough inventory for me to choose from — one month is too low. I should wait. Wait for a better market to buy a home.
Fast forward one year, and now that home buyer has saved up her 3% down payment. She’s ready to buy a home with a conventional loan. She takes another look at what is now the April 2018 Sacramento real estate market. Whoa. Her hesitation cost big time. Now the median sales price is $370K. Just 12 months later! Almost $50,000 more. The average days on market remain the same at 22, meaning demand is high, unchanged. Inventory edged ever so slightly to 1.3 months.
Did she miss the boat?
This home buyer’s solutions are either to change her options or pay more. Such as maybe not buy a 3 bedroom, 2 bath home. Perhaps she can now better afford only a two bedroom, 1 bath home. Or, choose a less expensive neighborhood. Maybe she can’t buy a $400K home and must settle for $350K. It’s not just market values that are rising; interest rates are also climbing. Every half point interest rate jump means a buyer loses about $25,000 in purchasing power. If her top sales price was lowered to $350K, that type of rate hike hammers it down to $325K.
It’s like a buyer is being hit by all sides.
But let’s not forget, Sacramento is considered a very affordable place to live in California. Interest rates are still below 5%, not the 18% interest rates of the early 1980s. It’s easy to predict that buyers want the most home their money will buy. However, some buyers will not budge from a faulty perception. They expect a turn-key home at short sales prices, and it’s not happening for them. So while they think they are in the market to buy a home, they are really just shuffling in and out of homes they don’t like.
The smart thing to do based on our April 2018 Sacramento real estate market statistics is to figure out a way to stop rising prices and stop interest rate hikes. Oh, right, you can’t. The only thing a home buyer can really do is buy the best house a buyer can find at what will be next year’s lower rates and make it fit particulars after closing. Buyers can always rent, of course, but rental rates are escalating, too. In some areas, it still costs more to rent than to buy.
Benefits of Working With Bay Area Agents to See Sacramento Listings
Not all Sacramento listing agents are happy to take on working with Bay Area agents, but it’s never bothered me. Probably because I do not care to double-end transactions. I would much rather let somebody else represent the buyer. My business is such I don’t need to squeeze every dime out of every corner of a transaction to make a good living for myself and my family. So, I do not have that problem that some other agents have when it comes to elbowing out, er, working with Bay Area agents. I will assist Bay Area agents anyway I can.
Now, it used to be that Bay Area agents did not have a Supra lockbox key so they could not access our lockboxes. But now there is some system where they can register to use it. I don’t know the exact specifics because I do not show property outside of my MLS nor go to San Francisco to show homes. But in the old days, listing agents in Sacramento could try to force Bay Area agents to turn over their clients to the listing agent in exchange for a referral fee. Because if they couldn’t show listings, that was a setback for them. Something is better than nothing mentality.
It hardly seemed fair. Besides, Bay Area agents have a right to sell outside of their area if they want to. Maybe some of them have even lived in Sacramento at one point? They do things a little bit differently in the Bay Area, however. For example, agents expect to get all of the disclosures upfront, which we don’t do in Sacramento. They might divide fees a little bit differently between sellers and buyers. But those are small issues.
The important thing that I see about working with Bay Area agents is . . . they have a buyer. That’s a huge benefit. It benefits my sellers and it benefits me. Further, those buyers are typically very well qualified. Many are paying cash. Will I ever tell an agent we won’t work with her to show a home to her Bay Area buyer? Hell, no. I’d have to be half insane to turn down that kind of situation.
It’s even better when after an open house on Sunday a Bay Area agent calls me. They typically say their buyer came through the open house and they want to know what they can do to help their buyers purchase the home. These are buyers who generally conduct little to no inspections, they understand buying AS IS, and they are sophisticated.
Further, in comparison to the price of a home in San Francisco, where the median sales price is $1.61 million, the median price of a Sacramento home is peanuts.
Read it and weep. Yup, the median price in Sacramento County for April of 2018 is $370,000.
But let’s look at the pros and cons. Now, we know that agent in the Bay Area did not show the property their buyer wants to purchase. Their buyer came through an open house alone, hosted by my team member or another Lyon agent. Downside. But the upside is tremendous. So, how motivated is that Bay Area agent to close a transaction in Sacramento? An agent who is doing little work apart from writing a contract? Well, I’d say very motivated. Which is yet another reason to love working with Bay Area agents.
If Bay Area agents can’t find a listing agent to work with in Sacramento, they are welcome to come over and sit down next to me.
What Buyers Should Do After Moving into a Home
Within the last week or so, I’ve been thinking about what buyers should do after moving into a home. It’s an assignment for The Balance. As my team members yesterday afternoon focused on our Elizabeth Weintraub Team Sunday open houses, I used that time to write an article for The Balance. Many of you might not know that I write for The Balance. That company had been About.com in 2006, which was owned by the New York Times, when I started working for that website on the side. Before that it was the Mining Company.
I know, you’re probably wondering how do I routinely sell $30 million a year and still find time to work a second job? Organization and passion is my response to that.
We were early pioneers. Since then, and especially from being a source others copied, meant that website has today morphed into many different things, with its 1,000 or so experts now split into vertical channels. All the SEO experts agree it better reflects what we are about. My position as the Home Buying Expert also entails other writing duties for the company. However, lately I’ve been toying with the idea of not writing for them anymore. I’m not compensated enough, not like I was initially. It’s a huge commitment to set aside huge chunks of my life to write. But then I love to write about real estate, and the topics they suggest are usually near and dear to my heart.
The latest article I wrote on Sunday is First Things to Do After Moving into a Home. You may enjoy it because I have unique perspectives, at least for a short time before somebody else plagiarizes my stuff. One of the things about that piece that really struck home for me was how people rarely change the locks after moving into a home. This is one of the first things after moving into a home that needs attention. I heard from a buyer’s agent last week whose buyers allegedly had personal items removed from the home. This resulted in a big problem after closing, presumably by a relative with a key.
You don’t know how many keys are out there. Petsitters. Housekeepers. Children’s friends. The neighbors, and let’s not forget the keys hidden in the yard just in case you get locked out.
It is very inexpensive to hire a locksmith. Just make an appointment with a locksmith the day prior to closing. The locksmith will meet you at the house. Your agent will remove the key from the lockbox and use that to enter the premises. Then, the locksmith, right there on the spot can change all the locks in the house to be used with one key. A different key. It takes about 20 minutes.
So while you’re walking through the house with your agent, marveling at all the space and discussing where you will place your furniture or the colors you will paint the walls, you could have brand new keys to secure the home in under half an hour. For about $100 or so. Prices will vary.
If you do nothing else when moving into a home, at least do this one important thing first and change the locks. Ask your Sacramento Realtor for a referral to a locksmith.
Elizabeth Weintraub Team Sunday Open Houses in Greater Sacramento
Seems like only last month the Elizabeth Weintraub Team Sunday open houses required two hands to be counted because there were so many of them. I mean, who needs an abacus when you have fingers and toes you can use? But April was such a hot sales month — even though I spent half of the month in Hawaii, I would not be surprised to see high rankings for us announced next week. Whenever I spend time working from our house in Hawaii, I seem to be even more productive. Must be the humidity.
So many closings and pendings, I’m getting to the point where I am running out of listings again. However I am happy to report the Elizabeth Weintraub Team Sunday open houses this week number four. All very different from each other. But then every listing is unique.
Not to mention, with the spring bug biting all of us, I bet you’re itching to buy a home where you can spend a lot of time in the yard. Enjoy this fabulous spring weather! We’ve got something for every budget.
Check out the Elizabeth Weintraub Team Sunday open houses below:
3804 Los Cerros Place, Davis, CA 95618, offered exclusively by Elizabeth Weintraub and Lyon Real Estate at $1,200,000. Situated in Lake Alhambra Estates in Davis, 4 BED / 3 BA, features updated kitchen with granite, four-season room, first floor office with built-ins, and this magnificent $200K+ yard with a pool, outdoor kitchen, waterfalls and fire pit. Open 1:00 to 4:00 PM.
1660 Headslane Road, West Sacramento, CA 95691, offered exclusively by Elizabeth Weintraub and Lyon Real Estate at $445,000. Situated in Southport Gateway, 2-3 BED / 3 BA, features a NEST thermostat, hickory-espresso flooring, and open floor plan, kitchen island and under cabinet lighting, and a spectacular pool and yard, drip system operated by B-HYVE app. Open from 1:00 to 4:00 PM.
985 Regatta Dr, Sacramento, CA 95833, offered exclusively by Elizabeth Weintraub and Lyon Real Estate at $429,000. Situated in the South Natomas school district of Twin Rivers, 5 BED / 3 BA, boasts over 2,000 square feet and is a whole house remodel. No expense spared. Truly stunning. Newer kitchen, first floor bedroom, solar is owned with backup. Open from 1:00 to 4:00 PM.
709 7th Avenue, Sacramento, CA 95818, offered exclusively by Elizabeth Weintraub and Lyon Real Estate at $399,000. This is a new price to generate excitement. Situated in Land Park, 2 BED + bonus room and 2 BA, also features an updated kitchen. Bonus room is a permitted garage conversion. Mature landscaping on drip system. Two covered patios. Storage shed. Open 1:00 to 4:00 PM.
Anything catch your fancy? If so, please call Elizabeth Weintraub at 916.233.6759 for more information.
The Trouble With Looking at Homes for Sale on Zillow
Because I have been a subscriber to Zillow since its inception in 2006, I am very familiar with looking at homes for sale on Zillow. I’ve participated in all of the changes on Zillow as it has evolved over the years. Watched it move from an inconsequential website with only a smattering of listings to receiving direct feeds from Metrolist. Making it a giant of websites. Then it bought Trulia, so properties feed into Trulia from Zillow.
But the trouble with looking at homes for sale on Zillow is that is not the best place to do it. You’re probably better off searching on Trulia, if you insist on using a non-Realtor website. And using a non-Realtor website is not the best way to search for homes online at all because you might not get all of the information you need. But sellers and buyers don’t always want to figure out how to find a Realtor-based website, so they go the easy route. Which is how they end up looking at homes for sale on Zillow.
Zillow presents a lot of interesting statistics, and if you have a good feel for comps, you can run your own comps. However, many users of the Zillow website struggle with its complexities. Users don’t know what a preforeclosure property is and they erroneously believe it is a home for sale. They do not realize it is simply an unsuspecting homeowner who fell behind on making mortgage payments. This is how a home could end up on a preforeclosure list without the homeowner’s knowledge. More than half of all of preforeclosures are redeemed. Almost all have equity, so few would ever go to sale as a foreclosure. Fairly worthless to track.
If a home does go to foreclosure, it will be sold on the courthouse steps to the highest cash bidder. You’ll compete with professional investors whose job is to buy homes sight unseen.
Users also struggle to figure out whether a home is for sale or for rent. Many Zillow users cannot tell the difference. It’s almost like Zillow needs a different website for rentals. Tenants will click that box that says “I own a home similar to this one and I would like to sell it.” Except they are a tenant. If you ask why they sent that email, they will say they don’t know. There was a box that populated a form with words, but they do not read words. It was a clicky thing, so they clicked.
Others, like the poor young guy who called me yesterday, found a pending sale. It states “pending” right on the listing, but hey, they’re not in real estate. How would they know a pending from an active listing? They all look the same to a consumer. He mentioned last talking to the listing agent during multiple offers. So decided to get prequalified while the home went under contract. They wanted to lie low and just “watch homes.”
Watch homes do what? Sell to somebody else? Because that’s what’s gonna happen when they’re looking at homes for sale on Zillow. In our tight seller’s market in Sacramento, home buyers need to be a pro or to work with a pro. One or the other. But this guy knows a cousin who just got her license and works part-time in real estate. He thinks he might want to work with his cousin. Fine, as long as he doesn’t expect to buy a house, that’s a good direction to go.
When he decides to get serious and become a contender, he needs to hire a professional Sacramento Realtor. I gave him my information and offered to introduce him to an exclusive buyer’s agent. Why a person would leave to chance the biggest purchase of their life or, worse, to inexperience, always floors me. But you can’t make people wise up. Some insist on learning from the school of hard knocks.
