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Compare 2005 and 2017 Sacramento Real Estate Inventory
Housing supply in the United States for 2017.
This is the housing supply for our country today, from May of last year through April of 2017, courtesy of the National Association of Realtors. We are not an island in Sacramento. Low inventory is a factor in just about every major metropolitan city in America.
You know how Facebook and Photos, to mention a couple of places, shows you stuff from years ago as a blast from the past? Well, I’ve been yakking about the Sacramento real estate market inventory and how dire it is right now, often comparing it to 2005. Then it occurred to me that to properly put things into perspective, I should pull the charts.
In fact, I had an attorney try to argue with me the other day about selling his home in Sacramento. He told me the market isn’t hot. Wha? He mentioned low inventory and tried to make a case for nothing selling, when that is not the case at all. It’s true we have low inventory, but low inventory = high demand. We have so many buyers, buyers coming out of ears, and almost nothing to sell to them.
Below are comparisons I think you will find interesting:
12 months of inventory in 2005 for Sacramento County.
This chart shows inventory reaching a record high of 10,807 homes for sale in Sacramento County in October of 2005. This was a sorry state of affairs for Sacramento real estate inventory. We had too many homes for sale. The pending sales were falling and the sold sales were on a decline. The market seemed relatively normal in March. Pending sales were higher than the sold sales and then inventory began to climb.
Sacramento real estate inventory May 2016 to May 2017.
Look at the stark differences in today’s Sacramento real estate inventory. The sold sales are climbing. Inventory and pending sales are almost neck-to-neck, yet our available inventory is about 70% less than it was in 2005. Demand is very high. Inventory is very low. We need more homes to sell, plain and simple, to meet the pent-up demand from buyers.
Sacramento real estate inventory in the ZIP code for Elk Grove of 95757 for 15 months.
Isolating the situation even further, looking at this chart for ZIP code 95757 in Elk Grove, you can see this micro market up close and personal. Holy Toledo! Look at the pending sales in May. We closed 44 sales, 67 are pending yet our inventory is about half of our pendings! Those 67 pending sales are sitting up in the air on white space without enough existing inventory to support the demand for homes in Elk Grove.
Thank goodness I have a single story home in 95757 coming on the market this Friday. But it’s such a small dent.
Look No Further for North Highlands Homes for Sale
Back yard of 4316 Aqua Ct is .27 acres with fruit trees, patio and spa.
You can spend hours combing through North Highlands homes for sale, or you can take a look at this new listing and just buy it. Why not? This home in North Highlands has everything you want and a little surprise that you might not be expecting in this price range. For starters, let’s look at the location. This street is a culdesac, which makes it’s a bit more private than other streets in this city. Yet, it’s right off Don Julio, not too far from Greenback, so it’s a short commute to reach the freeways. Which is pretty convenient, wouldn’t you say?
Second, you know how so many homes these days had gone into foreclosure or they were purchased as short sales, and you really don’t have much of a history of some North Highland homes for sale? Well, this seller was never in distress. He didn’t over-finance his home, and he’s lived in this house for more than 20 years. All of that time, he’s been puttering about, fixing up this, improving that, and poking around to make sure everything works correctly.
He has recently replaced the AC system, installed a new roof and replaced the plumbing, including the electrical. It’s almost like a new house, fairly maintenance free. And wait until you see how he has improved the back yard. It’s absolutely beautiful! A lush green lawn on .27 acres! The seller has tiled the patio, both covered and uncovered, and the pergola is made from aluminum, no dry rot here. Surrounding the perimeter of the yard you’ll find grapefruit trees, tangerines, lemons and a plum tree. There are 2 large mulberry trees and an elm.
You’ll spend many a summer day lounging about in your back yard paradise, admiring all of the seller’s handiwork. You can’t take it all in during one sitting. You’ve got to spend time in the yard to truly appreciate the splendor.
Another feature many buyers look for among North Highlands homes for sale is a three bedroom house. This home features 3 bedrooms. The floor plan is open basically, and it’s arranged so you can walk from the kitchen into the dining area, to the living room and back to the kitchen again. This is a perfect arrangement if you have a small pet who likes to play hide and seek, as I would obviously know.
The garage is set up as a man cave, but you can roll up the carpeting and park in there, if you want. There is also laundry located in the garage. You might notice the two driveways, as there is one on the left leading to the garage and another on the right. The seller once upon a time had parked a boat in the back yard, so RV access is probably possible.
Come to our open house on Sunday, June 18th, from 2:00 to 4:00 PM. 4316 Aqua Ct, North Highlands, CA 95660, is offered exclusively by Elizabeth Weintraub and Lyon Real Estate at the affordable price of $245K. For more information or a private showing beforehand, please call Elizabeth at 916.233.6759.
See a few photos below, there are more at the link above, and virtual tour here.
Pretty living room features ceiling fan and is open to the dining area.
Kitchen features newer white cabinets with oak trim and all of the appliances stay.
Darling cottage and the blue shutters lends this home curb appeal.
An Overpriced Listing Versus an Overpriced Buyer in Sacramento
An overpriced listing is not inherently bad unless more negatives are in the picture.
If I’m gonna take an overpriced listing, I have to really like the seller. Because I know that I will be in a long-term relationship with that seller as we work toward price reductions, pulling the home off the market, putting it back as a new listing, and fielding unending agent comments about the crazy price after showings that go nowhere. Yet, little messes up that relationship more quickly than when a seller demands I discount my fee for no good reason.
Sellers like this are basically saying, hey, we want you to work like a dog trying to get a price for our home that is impossible to obtain, and we don’t want to pay your going rate. That’s three strikes, the third being brain damage. Rottsaruck there, buddy. You deserve to work with a discount agent, yes, sirree. Go hire a discount agent who will shoot pictures with a cellphone and throw you under the bus after the buyer’s home inspection. See how happy that makes you.
But I don’t tell them this because they wouldn’t believe me anyway. They don’t work in Sacramento real estate and they don’t really know our market. They don’t realize they will lose far more money than they hope to save. These guys don’t view their home as an overpriced listing because they don’t understand how appraisals work. It has never occurred to them that the home needs to appraise at the sales price.
A few weeks ago, I had an agent call me to say she had shown her buyer one of my listings and “unknown” to her, this guy snuck back over to the house, knocked on the door and offered the seller a huge sum of money. Well, we all suspect that the agent told him to do it, but can’t report the agent due to lack of concrete evidence. I called the seller while the buyer was there and had him put me on speaker phone.
Hey, Tony, I said, (not his real name). I hear you offered the seller $500,000 for this house, (not the real price).
Yes, I did, and the seller accepted it.
I have bad news for you, Tony, the seller doesn’t want $500K; the seller would really like a million dollars!
Much laughter. I could hear the seller agreeing with me.
Hey, Tony, I continued, how much money do you have?
I’ve got some money, he said.
Good, Tony, have you got an extra fifty-thousand dollars? Because if this home doesn’t appraise at the value you offered, you’re gonna have to give that $50,000 to the seller. Do you wanna do that, Tony?
Oh! I didn’t know it works that way, he replied.
In this case, I did not have an overpriced listing. I had a listing that was priced right. We were dealing with an overpriced buyer.
Negotiation Techniques for Crazy Real Estate Situations
Negotiation techniques in Sacramento real estate might not make every person happy.
Just a quick word this morning about negotiation techniques for crazy real estate situations. Now, for some of us, we might laugh this off and say every single real estate situation in Sacramento today is an unreasonable real estate situation, and that is more fact than fiction. This is not a normal real estate market. Strange things are happening, and sellers have never before been in such a unique situation to negotiate issues in their favor. Reasoning with unreasonable people is an uncomfortable task for some Sacramento Realtors, but it’s second nature to me. Especially if one arrives at that premise believing every person is somewhat unreasonable, if given the chance.
An agent and I were talking about the market yesterday. The agent asked if I had a moment to discuss an unusual escrow. That agent’s buyer wanted a really big credit, but the amount of the credit exceeded her closing costs. This meant they had to also reduce the price to take full advantage of the negotiations. To get that credit, they needed strong bids. In this agent’s situation, which is not a transaction I’m working on, btw, the buyer’s agent had a seller on the other side who was willing to provide the credit, with a stipulation. The seller demanded a particular clause — doesn’t matter what the clause is — be inserted into the contacting bids for the work. The buyer planned to complete the work after closing.
The inherent problem was none of the contractors who had submitted bids would provide that clause in the bid. The agent asked if there was some way to negotiate with the seller to remove the demand for that clause. The seller was unreasonable. It was an odd request. A peculiar demand. Not common or everyday. It would seem to most people the best cause of action would be to get the seller to drop that demand.
However, good negotiation techniques for crazy real estate situations are best snatched from the days of short sales. You remember Sacramento short sales, right? When banks would make the most idiotic demands? And we’d have to work within the confines of those demands. So often people look in the wrong places for the solution.
In this agent’s situation, the solution between all of the parties involved was simple. Make the contractor insert the language the contractor did not want to insert into the bid. That’s the solution. Explain that if the language is not in the contract, the seller won’t pay the buyer and the buyer won’t pay the contractor. The contractor can insert additional language defining the phrase if needed, but bottom line, either it goes into the bid or the contractor doesn’t do the work. Stop putting pressure on the seller and put it where it belongs, even though the demand is unreasonable.
The outcome was the contractor inserted the language into the bid. Now everybody is happy. Well, maybe the contractor isn’t as pleased as he could be but on the bright side, he got the job. And that’s worth quite a bit in today’s world. Negotiation techniques for crazy real estate situations involve finding the path with the least resistance that can be most easily altered. There you have it in a nutshell.
Timing on Market is Key With Sacramento Listings
Timing on market in Sacramento can help to generate excitement and higher offers.
Part of the problem I am facing as a top listing agent in Sacramento, odd as this might sound, is with timing on market; I can’t keep any listings in inventory. Soon as I put a home on the market, we get a bunch of offers and it sells. I honestly don’t think I’ve had a listing stay in active status longer than a week lately. I compare it to the days when I used to put together large dinner parties. I could spend 3 days on my feet, chopping, cooking, creating a Chinese feast and, within 20 minutes, the food is devoured and gone.
Everybody has this impression that I have a whole bunch of listings when I might have 2 or 3 active listings all together. This is a far cry from the days when I handled 75 listings at once, back in the days of short sales when it could take 6 months to a year to close. In those days, the listings piled up. I was generally at my computer at 5 AM. Now that I am taking a couple of new listings a week on average, it’s almost like I’m on vacation. I have plenty of time to invest in taking care of my clients.
I’m working through the Memorial Day weekend, too, but many other agents are not. Buyers are taking a break from looking at homes, too. There is a spectacular new listing in Curtis Park ready for the market, but why would I advise a seller to put it on the market over Memorial Day? I would not. Because I want what is best for my seller and the highest price. I do not want days on market accumulating due to low demand on a holiday weekend. The odds are the home will sell by the first Lyon open house extravaganza in June.
Timing on market is key. If we went on the market today, when fewer buyers are looking, we could very easily a) not expose ourselves to the largest pool possible of buyers (which drives demand and price) and b) our days on market by next week would be 10. By just holding back a little bit, we can come on the market with a huge explosion!
Besides, everybody will be back at work Tuesday morning and wishing they were not. They will be looking at homes online, you can betcha. And here will be this brand new listing, shiny and happy and ready to buy. Not some dated thing that had the tires kicked by lookie loos over the weekend. But I am a huge proponent for timing on market. I’m not one of those agents who throw everything into MLS, whenever, without thought, in hopes something will stick for a fast buck.
My sellers deserve better. They deserve a prepared marketing plan with a purpose, and a Sacramento Realtor who cares about them.
