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Where Are the Home Buyers in Sacramento?
If you’re wondering where the Sacramento real estate market is moving right now, then this blog is for you. Because I list and sell a lot of homes in Sacramento, I can easily spot trends — if I’m paying attention and not hanging out with Myrl at The Dive Bar late at night. The trend now is buyers are in no big rush to buy, and inventory is lingering on the market. It doesn’t mean that a home won’t sell, it will just take a little bit longer and there might not be multiple offers.
I see some sellers are dismayed when they hear they might not receive multiple offers, but geez Louise, how many buyers does one seller need? A seller needs one committed and dedicated buyer who loves that seller’s home. It’s all about loving that home. It always has been. You just need to find that special person among home buyers in Sacramento.
A seller contacted me yesterday for an update on selling a home in Natomas. I had sent him a comparative market analysis last spring when the market was a frantic hotbed of activity. At that time, the home he wanted to sell could have listed for $225,000 and probably received multiple offers, which would have driven up the price a little bit. Today, that same home should be listed a little bit more conservatively, closer to $219,000, and he will most likely receive just one offer, and that offer might be for a little bit less.
This doesn’t mean prices are falling; it just means the strategy to sell is a little bit different. I suspect prices will stay fairly stable and probably rise again next spring, depending on where interest rates move. The thing about interest rates is movement doesn’t remove buyers from the marketplace as the economist at NAR predicts. A rise in interest rates simply lowers the purchasing power of the buyer. A half-point increase in an interest rate knocks down a buyer’s sales price by about $25,000. A full-point increase? $50,000 less. Home buyers in Sacramento should grab these historically low rates while they can!
I am including a chart below from Trendgraphix which shows the last 15 months of average sold sales prices by month versus the prices of homes for sale. You can see the average for sale price is higher than where the demand for homes lies. This doesn’t mean that sellers are asking higher prices and buyers are paying less, so don’t get confused about that. It means that the average sales price is higher than the average price most buyers can pay. There are more sales in the lower end. But look at that increase. That’s a 142% jump in our average sold price since summer of 2012, and it’s continuing to go up.
My conclusion is buyers can demand a little more and sellers will give it to them. Even in a market of limited inventory. Our inventory has almost doubled but it sits at 1.8 months. That is still incredibly low, and not a buyer’s market, unless we have no buyers. Where are the home buyers in Sacramento? I’ll tell you one agent shared with me this morning that her buyer has a list of 100 homes that the buyer wants to see. Who looks at 100 homes?
The Sacramento Real Estate Agent Who Shows 3 Homes
Not every home that comes on the market these days is a highly desirable home in a hot location. Some of them are ordinary homes in Sacramento, owned by sellers with a little bit of equity who might need every scrap of equity they can squeeze out. Every once in a while, one of these sellers might be close to short sale status but would be willing to pay a couple of dollars just to close the transaction. These homes seem to be overlooked by buyers or possibly used by real estate agents as “the home not to buy.”
Back in the old days, and quite possibly even today as I type, real estate agents used to show 3 homes:
- A home the buyer cannot afford
- A perfect home that meets the buyers’ needs
- A home so horrible nobody would ever want to live in it
And they would show the 3 homes in the above order. Because when the Sacramento home buyer falls in love with the first home, it can be heart-breaking to realize that it’s just a dream, and the buyer can’t really afford to buy that home. It’s similar to the concept that HGTV uses on House Hunters, except 2 of those homes are often not for sale. After the buyer’s heart is broken, it’s on to tour the home that’s perfect.
The buyer can’t believe her good luck. Everything is exactly the way she thought it would be. The living room is in the front, she walks through the formal dining — past the two rooms she will never ever use in her lifetime — and into the kitchen with the Wolf 6-burner stove — a stove she will never turn on, but wow, it looks magnificent. Which reminds, did you hear that Burger King is now delivering to select areas in Sacramento? Yes, it is true.
While the buyer is salivating over the perfect home, the agent takes her to the home nobody would ever live in. Maybe it’s nestled next to the train tracks, or under the freeway, or across the street from a graveyard, by a school, or maybe the home is just a mess inside, with torn-up carpeting, Corian counters and half-chewed cabinet doors in the kitchen. Most buyers do not want to buy a fixer these days and, if they do, they will discount heavily for repairs that they have no idea how to undertake or what the repairs will actually cost.
So, then the buyer goes to the agent’s office and triumphantly declares she will buy house number two.
Sometimes, though, your number just comes up. Sometimes, in this limited inventory marketplace, we run out of the homes that are too expensive and the homes that fit a buyer’s every requirement. Sometimes, all that is left are the unique homes with a defect. Did your agent show 3 homes? Think about it.
And that’s when we’ll get three offers in one day on the same house.
Pricing a Home in Sacramento Ahead of the Curve
Pricing a home in Sacramento ahead of the curve is the strategy a few select Sacramento real estate agents are offering to today’s sellers. It means pricing a home where you think the market is heading and not where the market is now. This strategy doesn’t work so well if the home is difficult to sell or is unique. It works well in areas of high demand where buyers are lined up the minute a home goes on the market — in places like Natomas, Elk Grove and Lincoln.
In Elk Grove today, you can pretty much walk the line of buyers with an order pad and pen, asking each what they will pay for this home in Elk Grove advertised at $185,000. Guy first in line might say $200,000. Tear off a ticket and write $200,000 on it. Woman behind him will smirk and promise she’ll pay $220,000. Tear off a ticket and write $225,000 on it. Couple behind both of them will trump those offers and, my goodness, they’ll pay $250,000. And so it goes. Throw your pad and pen in the air. Nobody has any regard as to whether the home will appraise when push comes to shove. They’re just thinking about their mortgage payment.
Why? Because every $10,000 increment at 3.5% interest equates to an additional $45 per month. If the home would appraise, a buyer could increase an offer by $50,000 and pay only an additional $225, less than, say, an HOA fee. Buyers don’t know how real estate works. They don’t understand that an appraiser will need to find solid comparable sales to justify a price that is $50,000 higher than any other home near it. And if they do understand, they are hoping that when the appraisal comes in less, the seller will lower her price.
A price ahead of the curve might be $225,000. Because in 30 to 45 days, there might be comparable sales at that price. Of course, you won’t get a ton of buyers. You probably won’t get multiple offers. None of that excitement. But you might get 2 offers, and one of those will be an offer you can take. All you need is that one offer from one committed and qualified buyer at a price that will close escrow. If you need more information on pricing a home in Sacramento, call Elizabeth Weintraub at 916.233.6759.
Two New Home Listings in Sacramento
Before I tell you about new home listings, let me share that I am sitting here in the waiting room in the basement of Mercy Hospital in East Sacramento. The hospital has WiFi. I am thrilled. My husband is here for a routine procedure, and I am not allowed to tell you anything about it. In fact, I’m not even sure he would want me to say that we are at the hospital. He says under no uncertain terms am I to say anything about his medical health, his checkups, his medical history or any kind of procedures that he may or may not be having.
Unlike woman, you know. We share everything with people. We go into excruciating detail. You wanna see photos? We’ll show you photos. Nothing is all that sacred. When the nurse poked her head through the door to inform me that my husband was comfortable and I could visit with him at bedside, I had my yogurt on my right, my cellphone at my left, my diet Pepsi on the chair rail and my laptop in my lap. Nope, I’m good. She picked up the Sacramento Bee from the floor and said he preferred to read the newspaper anyway and, besides, she looked at me sideways with that kind of smirking grin like she knows something I don’t, and added: “You’re addicted to that thing anyway,” and she marched away.
It would seem that my husband can talk about me and my quirky habits, but I am not allowed to discuss anything about him. Therefore, I am not going to talk about why I have to sit in the hospital waiting room as I type my morning blog, I’ll just get right to recent events.
I have two new listings that came on the market this morning. There is also an article that I believe will be published in the Sacramento Business Journal tomorrow that should feature some kind of insight from me and a photo of me with my Fair Oaks seller in his kitchen. It’s something about the market and the direction it is heading. I don’t really recall the interview because I talk to so many people every day. I just hope I said something intelligent that was selected for print and not one of my more doofus types of statements. I hope one eye doesn’t look bigger than the other in print, which sometimes happens to my eyes in photographs. Makes me look like an orangutan.
My Fair Oaks seller’s kitchen is beautiful, though. He just installed new granite counters, to complement the rest of the remodeling. The home is beautiful, but it’s the magnificent view of the forest in the back that will cement the deal for you. It will be open on Sunday from 2 to 4 PM. The address is 4552 Wawona Circle in Fair Oaks, and it’s offered for $359,000.
My second new listing is at 2636 Dobbins Way, just north of El Camino near Business 80. It’s located in a pocket of newer homes on a quiet cup-de-sac. The home features 4 bedrooms, 3 baths and was built in 2006. Best of all is the fabulous price of $159,000, and there is no HOA! It will also be held open on Sunday from 2:00 to 4:00 PM. If you would like information on new home listings, just give us a ring at 916.233.6759.
The One Tool a Sacramento Real Estate Agent Needs
Besides a charming personality, which certainly helps a Sacramento real estate agent to get along with people, the number one tool an agent needs is a cellphone. But it goes beyond that. You can’t just buy a cellphone and stay in business. To stay in the business, you’ve got to actually answer your phone. It sounds so simple, so easy to do that people might scoff at this and believe anybody can answer the phone, even a trained monkey can answer the phone, and they would be wrong. There are many real estate agents who don’t answer the phone.
I know this because when potential clients call this Sacramento real estate agent, the first thing they say is: “Am I talking to a real person?” or “I can’t believe I have a live person on the phone.” For that reason alone, I’m getting the business and not some other agent in Sacramento. I’d like to think that people are working with me because I’m witty, fun to be around, smart, I’ve got years of experience, and I care about them, but no. They work with me because I answer my darn phone.
Yesterday, I held 6 open houses in Sacramento. It’s hard enough to believe that I have six homes for sale in Sacramento that have not yet sold, but five of those have not been on the market for very long. It was National Open House Weekend. It was also Lyon Real Estate’s Extravaganza Sunday. Ordinarily, open houses do not sell houses but they don’t hurt the sale process, either. It’s good to let people know the inventory is there.
Two hours before an open house was scheduled to begin on a brand new listing that just hit the market on Friday, the agent called to say she was sick. Because she was so ill, she couldn’t hold open the house. My commitments conflicted with the Open and could not be changed, but I would be danged if I would let down a client to whom I promised the home would be open. None of my Elizabeth Weintraub Team members could do it because they already had open houses scheduled. If push came to shove, I decided, I would find a way to be in two places at once. But first, I called my back-up open house agents, those who are eager to meet and greet the public.
I called 21 real estate agents. Of those, 3 answered the phone. A fourth called me right back because she was with a client at another open house and could not answer her phone. Another returned the call a few hours later when she noticed that a person had hung up who had called her, and she wondered who it was. I left messages for four of them and not one returned my call. The 3 who answered the phone had other commitments themselves that afternoon, but I noted the fact that they answered their phone. If I’m ever in this pickle again, they are the agents I will call.
The fourth agent who was busy with a potential client is the agent who agreed to hold the home open. She finished her early open house just as mine was about to start. She rushed over and there were already people on the front porch waiting for her to open the door. I will call her again, too. She has all the marks of going far in this business. In my book, she’s my go-to open house agent. The one you can count on in an emergency. When you need something done, you call a busy person. When that busy person answers the phone, you’ve come to the right place.
If you’re looking for a Sacramento real estate agent, call Elizabeth Weintraub at 916 233 6759. I’m a busy agent who answers her phone.
