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Predictive Analysis for Sacramento Real Estate in 2014
When it comes to the Sacramento real estate market for 2014 and NAR’s new focus group for Predictive Analysis, I say Predictive Analysis, my schmalysis. For starters, it’s sort of an oxymoron. For enders, it’s supposed to “solve complex problems in the housing industry,” among other remarkable features and benefits. It promises to help us all make better data-driven decisions.
If you want to know where the real estate market in Sacramento is going, you really don’t need to look any further than Trendgraphix and your own front steps, providing your home is for sale. As a consumer, you can read what the top-producing agents in the industry have to say about their business. Because I sell more homes than a good real estate agent on an average day, I see an abnormally high number of real estate transactions in Sacramento. We are the people media turn to when they want to know what’s happening in Sacramento because we have our fingers emerged in real estate every single day.
I use my knowledge to help my clients make decisions. I can pretty much accurately predict where the market is moving because I note trends. The secret is what happened yesterday is fairly certain to happen today, to more or less the same degree. And what happens today is more or less certain to happen tomorrow.
A spike is unpredictable.
To help our clients, what a Sacramento real estate agent (and agents everywhere in America) need to do to is a) listen to them, b) provide them with information to make educated decisions, and then c) make it happen. Just like we’ve always done.
But if NAR wants to call it Predictive Analysis and sell snake oil to us off the back of a truck, though, I’m predicting we’ll buy it.
Selling Homes in Sacramento Now or Wait for Spring?
Seems like a lot of sellers are asking this Sacramento real estate agent is now a good time to be selling homes in Sacramento? They are wondering if they should put their home on the market now or wait until spring. The only thing spring brings, besides spring flowers, is more buyers. But spring also brings more homes, so there is more competition. How many buyers do you need and how many competitors do you need? I say you need one buyer and fewer competing homes for buyers to choose from.
That’s why I’m telling you that right now is an excellent time to be on the market. Great market for selling homes in Sacramento. But only if your home is priced properly. Only one of out every 2 homes is selling because half are priced too high.
The other questions I’ve been receiving are from people who ask if the price increases in Sacramento mean they can ask a phenomenal price for their home. The thing is your home is worth only what it is worth. It’s not worth more than that and, in fact, might be worth less.
To sum it up simply, your home is worth more than last year. Might be worth more than next year. Prices are stabilizing a bit.
I’ve heard of sellers begging their agents to leave their homes on the market or hold an open house after they’ve received an acceptable offer. They are under the misguided impression that they are missing out on some unforeseen cash strewn at the side of the road. Makes me want to grab these people by their shoulders and shake them because their brains have gone haywire. If you’ve got a good offer, take it, because you might not get another offer.
Take a look at the chart above. At first glance, the uninitiated might say, whoa, look at the number of homes and pending sales that are declining in November and December. But what they are not realizing is those home sales were originally sold in September and October. It takes 30 to 60 days to close an escrow. Take a look at January and February sales. Those pending sale numbers exceed the number of homes for sale. That’s huge, huge, huge and extremely important to know that January and February sales are a result of homes going on the market in November and December.
Now is an excellent time to sell your home. Don’t wait for spring when interest rates might rise. Do it now. If you’re looking for a Sacramento real estate agent with her finger on the pulse of the market, call Elizabeth Weintraub, at 916 233 6759.
Chart: Trendgraphix
The Sacramento Real Estate Market Train
The fall real estate market in Sacramento is not at all how I pictured it would be. Usually, transitions are made slowly and you can see the danged train coming, but not this year. One day it was summer and the next, bare trees. This was a very abrupt change in the Sacramento real estate market. But like with all things in life, you’ve got to go with the flow and change with it.
Take home pricing, for example. Just a short while ago, a listing agent could advise her seller to price a home very aggressively. In fact, this Sacramento real estate agent would push ahead of the curve. Examine all of the comparable sales for the past 6 months, single out the best for the last 3 months, determine the direction they were moving, calculate the difference, pare it with the active listings to position and pad it a little. That strategy no longer works in today’s real estate market in Sacramento.
The reason it doesn’t work is because the attitude of buyers has changed. Buyers always drive the market, even if it’s a seller’s market. Today’s buyers are worried. They are worried that another bubble is around the corner, which it is not. They are worried about interest rates going up, as they should be concerned. They are worried about whether they’ll still have a job tomorrow and whether our government will ever get back to work.
Meanwhile, you’ve got REOs coming on the market at almost double the prices from last year. I just spotted another foreclosure this morning. This was a home that I had sold a year ago as a short sale, a cooperative short sale through Bank of America. We had the cooperative agreement signed from Bank of America and yet still the bank released the servicing just days before we were set to receive short sale approval. Bam. Now the file fell into the lap of Seterus, the seller no longer qualified for the short sale, and the home went to foreclosure.
Back on the market today, a year later, at almost double the cost. The comparables in that neighborhood do not support the price.
Today, it’s better to be sitting at the back of the train and watching where the train is moving. Catching glimpses of the front of the train going around the curve. That’s how a Sacramento real estate agent will know where the market is headed.
photo credit: White Pass Train at Skagway, Alaska, by Elizabeth Weintraub
Commission-Gate and the Sacramento Real Estate Agent
Who knew that selling Sacramento real estate was likely to turn into its own little Commission-Gate? Over my past 40 years in real estate, this was a first for me. Now, we know buyers are a bit desperate vying for certain homes, and agents can be all over the map when trying to help them buy those homes, too. But holy moley, you don’t throw a bag of money at the listing agent, for heaven’s sake. No, I don’t want to see the gold watches pinned inside your coat, button yourself up and get outta here.
Let’s set aside the fact that it’s against the law, probably violates the Code of Ethics, and it breaches an agent’s fiduciary relationship with her seller, and look at what buyers or their agent — hard to say where the idea originated — were coming from. See, Mikey here really wants this house, see. Poor Mikey and his dame, they just wanna buy a house, and they know it’s uncool to be packing heat. They don’t wanna wear no bracelets, much less end up in the stinkin’ meatwagon heading off to the Big House; so, instead, see, they’re just gonna sweeten the deal with moolah.
I can’t believe a buyer’s agent asked this Sacramento real estate agent yesterday to accept a kickback on the commission. She offered 25% of her commission to me as a bonus if I would just get her buyers into that house. What?
Yeah, my jaw is still hanging open. I had to tell her to hang on her to cabbage and just write the best offer that her buyers could write. I’m nobody’s stool pigeon but I’m kinda floored that she had the gall to ask such a thing. Is this Chicago? What’s next? No, I’m not going there because sure as crap somebody will try to do it if I say it. I’m not putting ideas into anybody’s head, not even as a joke.
This market is not bringing out the best in people. Some real estate agents are becoming forgetful. To some, the Code of Ethics is something dark and murky, in their past; they’re too busy crawling over dead bodies to get to that pile of gold. We simply cannot set aside our professionalism because the market is hard or inventory is low. I find this kind of behavior troubling because it reflects poorly on all of us.
Government Shutdown and Sacramento Real Estate
All over Sacramento, people are talking about the government shutdown, and how it will affect Sacramento real estate and selling homes in Sacramento. In fact, yesterday a reporter from KFBK called to ask for my opinion. You might wonder why would a reporter call a Sacramento real estate agent for her thoughts? A lot of media reach out to me because I write about home buying for About.com and consistently blog. Besides, often it’s better to go directly to the trenches to find out what’s going on over calling talking heads whose main missions are to increase net profits for their companies.
I was a little bit hesitant to give the reporter my views because controversy sells, and one never knows how her words will be spun. Television and radio personalities don’t always look for the same angles as print journalists. But I didn’t get where I am today by standing in the shadows. Even though I joked that the reporter will undoubtedly find some other schmuck whose opinion will be completely opposite, painting me like a moron, what the hey.
Then a client emailed last night to ask if selling her home would be a problem if the government shutdown. We haven’t yet put it on the market but will most likely do so in the next week or so. I hate to say this, because it sounds like I might not care about others who are affected by the government shutdown while I do care, but my life as a Sacramento real estate agent will be pretty much the same as it ever was, thank you, David Bryne.
People are yakking about FHA loans, but it’s the mortgage loan officers employed by banks and independent lending companies who are pushing that paperwork through. If you left it up to the government to process loans, we’d have a nightmare on our hands. The main problem with loans will be the 4506T submissions, but some mortgage lenders are already working on ways to close with just the form in file; you know how creative lenders can be.
It is possible, though, that a government shutdown might affect the attitudes of home buyers, who can become timid with the slightest uptick in rates; however, I imagine a significant interest rate hit will have a bigger affect on a home buyer than a government shutdown. Cash investors don’t care either way, and cash investors are still huge supporters of the Sacramento real estate market.
Yup, same as it ever was.
