sacramento real estate
What Home Buyers Can Now Expect in Sacramento Real Estate
One thing to get straight right up front about what home buyers can now expect in Sacramento real estate is the market is not crashing. Our market is definitely not a bubble waiting to burst. Too many owners have too much equity and a higher number of sales have no loan at all. The scary no-doc loans given to any person with a pulse is absolutely not happening. However, what home buyers can now expect in our housing market is softer pricing. There are no smart sellers hoping for “my way or the highway” anymore.
Instead, smart sellers are viewing the competition with an eagle-eye lens. They are making their homes better priced and more attractive than the competition in hopes their home will sell faster. Oh, there are a few sellers still looking for that needle in the haystack, that unicorn buyer, but I definitely see that sort of attitude quickly changing.
What home buyers can now expect in Sacramento real estate is more negotiation. Prices are no longer firm. Many sellers are willing to help pay closing costs, too. There are not as many multiple offers for median priced homes, so buyers aren’t always getting beat out by cash buyers.
Another nice benefit for buyers is sellers are putting more work into getting their homes ready for market. Except for the flipper homes, for the most part, buyers can expect new paint, maybe new flooring and newer appliances. If a home isn’t up to their standards, they have 5 more that fit their dream list. And really, how many homes does a buyer need to buy, but one?
Typically, moving into Thanksgiving, our real estate market in Sacramento slows down for the winter. We are not likely to see a change in activity until probably March. This means home buyers have an excellent window of opportunity to find the home of their dreams, that perfect home in Sacramento. Interest rates are predicted to land in the 5.5 region next year, but for right now, they are hovering around 5%. Everything points to the best time to buy a home in Sacramento is over the next few months.
You can call the Elizabeth Weintraub Team at 916.233.6759. We’d love to help you find a home.
First-Time Home Buyers Will Love a Home in Rio Linda
If you want to love a home in Rio Linda, this is the perfect place for qualified first-time home buyers. First, it is affordable, and qualifies for FHA and VA financing. Maybe a buyer is using down payment assistance, which means the down payment might be zero if the buyer qualifies for certain programs. Second, the location is lovely. It’s located in a cul-de-sac, surrounded by neighbors who are crying at the moment because the present owners are moving away. Everybody seems to know everybody else. And third, the home is ready to move into. No work to do.
Well, saying there is no work to do can be subjective, depending on what a buyer wants. Let’s say they want new cabinets in the kitchen or maybe different counter tops. It’s not unusual for a buyer to want to customize her own home and make it fit her vision, not somebody else’s. In that case, there are also affordable renovation loans offered by Guild Mortgage, and they are easy to get. Guild streamlines the process so the renovation loan is rolled into the mortgage loan. How easy is that? Plus, you can still close on time, no delays necessary.
There is no reason not to love a home in Rio Linda like this. It features hardwood floors throughout, except for the kitchen and family room. Although the family room is a bonus room and not included in the square footage, the floors in that room are wood-like laminate. In addition, there is a floor-to-ceiling rock fireplace in that room. Makes for perfect TV viewing. The sellers are willing to leave some of the furnishings for the buyer at no cost or consideration nor warranty, of course.
This home has 3 bedrooms, 1 bath and a large fenced yard. It could incorporate RV parking if a buyer so desired, but it’s also perfect for dogs. There is a covered patio on the side of the house, too. If you are a buyer who wants to love a home in Rio Linda, you will not be disappointed.
6130 De Anza Ct, Rio Linda, CA 95673, is offered exclusively by Elizabeth Weintraub and Lyon Real Estate at $260,000. Call Elizabeth at 916.233.6759 for more information or a private tour.
The information in this advertisement, including, but not limited to, square footage and/or acreage, has been provided by various sources which may include the Seller, the Multiple Listing Service or other sources. Lyon Real Estate has not and will not investigate or verify the accuracy of this information. Prospective buyers are advised to conduct their own investigation of the Property and this advertised information utilizing appropriate professionals before purchasing this Property.
Tips for Helping Sellers in Sacramento to Understand our Real Estate Market
When I take a listing, in turn I am helping sellers in Sacramento by providing accurate data and being painstakingly honest. Part of my directness, undoubtedly, comes from being raised in the upper midwest. My mother always called Minnesota the upper midwest and not just the midwest because I presume she didn’t want to be confused with Missouri or Kansas. Like she lived in Upper Manhattan and not the frozen tundra of Minneapolis. But I grew up believing the only way to relate to others was to be honest and direct rather than embellish or, worse, make up things you can’t remember.
If people don’t like it, they aren’t a good prospect for me. In that photo above, you can see my sisters and brother on the front steps of the first house my parents ever bought. I am on the right, grinning in a red tafetta dress and my fancy saddle shoes. My sister, Kathryn, on the left lives in Robbinsdale, Minnesota, and long ago, without reason, cut off all ties with the family. My brother John died from sarcoma two years ago, and my little sister, Margaret, is still in Minneapolis. We talk every Sunday.
Look at us. No safety railing on those steps. Probably asbestos in the siding. Ha! Lucky we didn’t all die, riding bikes without a helmet.
Yet, now that I’ve been in the real estate business for 40+ years, I’ve learned that being direct is still the best policy. Never deviated from that factor. Although, I am cognizant of what other agents might say to sellers. I won’t go so far as to say they lie, but they don’t always tell the truth. If you ask a listing agent if this a good market in Sacramento to sell, you’d be hard pressed to find an agent who will say the market is softer and demanding. They tend to paint rosy pictures because they don’t want a seller to get discouraged. They also know that sellers tend to gravitate toward those who make them feel good.
But that’s not my method. Maybe that’s why I’m so successful when I’m helping sellers in Sacramento sell a home. I spoke with a potential seller yesterday about selling a home in Citrus Heights. She said it was worth about $300,000, and I know instinctively she pulled that number from Zillow, which is often incorrect. Then she told me it needed work. No updates. She bought it in 1998. Well, there are only two ways an older home in Citrus Heights without updates will sell.
Either you update the home or you reduce the price accordingly to account for condition. Nobody thinks about “condition” when they live in a house. It functions. What’s not to like? But buyers have plenty to say about it, and they will pass you by. This seller’s solution was to either a) sell AS IS or b) remove the carpeting and install ceramic. How do you tell a seller that ceramic floors are a thing of days long gone past? With compassion and empathy, that’s how.
She also thought she could come up with a number that it would cost renovate the house and then deduct that amount from the sales price, and a buyer would hop on it. So, I had to explain it doesn’t work that way. If faced with house A, all fixed up, at $300K or house B, needing $30K of repairs and priced at $270K, which would a buyer purchase? Why, House A, of course. House B would need to be priced around $250K or less to sell. Buyers expect compensation for the hassle.
This seller also did not understand that the $300K homes were much larger than hers. Square foot cost? She never heard of that computation. To her, a 1,500 square foot home would sell for the same as an 1,100 square foot home, except they don’t. Well, I probably talked her out of selling all together, but that’s what helping sellers in Sacramento is about. Helping them to come to their own decisions and making informed decisions.
If you’d like to talk about selling your home, please call Elizabeth Weintraub at 916.233.6759. My full intent is to sell your home at maximum profit potential for you. You can rest assured I won’t tell you what you want to hear, but I will tell you what you need to know.
A Look at Average Days on Market in Sacramento Real Estate
The average days on market in Sacramento are edging up as we move further into our slower season of the year. I see it in my own listings. Homes that would have flown into escrow a year ago are taking much longer to sell, especially in the $750K to one-million market in Sacramento.
My thoughts in examining that particular segment is it is the luxury market. This segment seemed to do better last year. Further, our average state workers in Sacramento, including first-time home buyers, are often reluctant to spend that amount of money for a home.
I took a look at the last 30 days in the $750K to one-million price ranges in Sacramento County. This is how it breaks down:
Activity $750K to 1 Million over the last 30 Days in Sacramento County:
- 270 homes for sale
- 174 Active
- 52 Pending
- 44 Sold
The average days on market in Sacramento for the sold homes in our luxury market show 52% sold at slightly more than 100% of list price within 30 days. My professional opinion is those homes were either priced under market or they were renovated. The other 48% sold between 60 days and 120+, dropping off list price by about 1% for each month on the market.
Now, in contrast, the under $500K market in Sacramento is a different story. Here are the statistics I extracted from MLS:
- Number of homes: 5,067
- Active 2,378
- Pending 1,488
- Sold 1,201
Since so many pending sales blow up lately, I don’t put a lot of credence in the pending numbers. Too nefarious. Prefer the hard cold stats of sold. However, the average days on market in Sacramento for the under $500K market is 60% sold within 30 days at an average of 99.62% of sales price. Another 23% sold within 60 days.
What all of this means is sellers need to be priced right at inception. Don’t put homes on the market to see what kind of activity you will get because it’s a waste of time if it’s not priced right. To sell, you may need to be under market or renovated.
Even though the average days on market in Sacramento may be growing, it also gives plenty of ammunition for buyers to use. We have enough inventory that everything is not selling. In the under $500K market about 1 in 4 homes sold. In the luxury market about 1 in 6 homes sold.
Buyers will be hard pressed to find a better market as we move forward into the new year. Prices are still moving up, interest rates are going up, too. When homes do not sell, eventually sellers will take them off the market, and when inventory drops, there will be fewer choices.
The Advantages of Owner Occupant Buyers vs Investors
The pendulum has finally swung in favor of owner occupant buyers vs investors in Sacramento. For years, first-time home buyers played second fiddle to investors. Losing out on offer after offer during multiple-offer situations. Investors often presented short closing time periods with cash or hard-money offers, and buyers struggled mightily to compete. When sellers considered, for example, a first-time home buyer using FHA financing and down payment assistance, they said no way, Jose.
It’s not that FHA loans are bad, but they do require certain repairs, no peeling paint, might have to clear a pest report. Not to mention, with down payment assistance, the qualifying is so restrictive that sometimes buyers who have been told they can buy find out they cannot. Not every lender qualifies buyers by closely scrutinizing finances. In fact, some just run the file through desktop underwriting and call it a day.
However, the good news in our new Sacramento real estate market — and make no mistake, this is a new market — is owner occupants rule. When it comes to choosing between an owner occupant buyer vs investors, sellers will often select the buyers who will move in.
For several reasons. First, an owner occupant, a person who will live in the property, often develops an emotional attachment to the home. When buyers are emotionally involved, they tend to overlook smaller defects and will forgive imperfections; whereas investors are typically more analytical. Second, an owner occupant is not trying to make the property “pencil” i.e. provide a specific rate of return on cash invested, like investors. And third, not every occupant feels they must underpay, so lowball offers are not as prevalent.
This attitude is especially apparent in probates and successor trustee sales. In these types of transactions, often there is a sense of loss for the person who died. Heirs want to do pono (right) by the deceased. When presented with owner occupant buyers vs investors, they will often take the buyer who has developed feelings for the home and will carry on an affection for the property. As compared to an investor who will strip it, flip it or turn it into a rental.
In fact, I just closed a sale like that yesterday. A client who moved to Abu Dhabi asked me to sell his father’s home in North Highlands. It didn’t take me long to figure out he needed a probate lawyer because he was the executor, so I referred him to a probate lawyer. This delayed listing the home for 4 months, but it also gave the seller time to clean it out.
First go-around we received four offers ranging from $150K to $180K from investors. We listed at $195,000. This meant I had to endure long conversations with well meaning buyer’s agents who tried in vain to persuade me that the home was priced too high for them. Well, my job is to maximize seller profit potential; it is not to appease guys who want a deal. We accepted a full-price offer from an owner occupant and got all the way to closing before the buyer canceled. Cold feet, I suspect.
No Sacramento Realtor likes selling a home twice and getting paid once, but it happens.
Second go-around we received another four offers. These ranged from $159K to $180K, with an FHA buyer at $190K who changed his mind, and then, YES, another buyer who offered $200K. Guess which was the owner occupant? The guy who offered $200K. We had a couple of small delays but we closed escrow yesterday at $200K.
The seller grew up in this home. The only home he ever knew as a child because his parents never moved. You can bet he is thrilled that another buyer will raise a family in his childhood home. 4275 Sloan Dr, North Highlands, CA 95660 closed escrow at $200,000 on October 30, 2018.