Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

In a conversation with one of my delightful team members yesterday, I suggested she print out the current Trendgraphix and hand it to every buyer she meets. Because many buyers cannot wrap their heads around the fact that it's a seller's market this spring in Sacramento. It doesn't mean prices are going up or that a recovery is here, because they aren't, and it's not.

I swear to God. Agents are out there poking each other in the eyeballs and slashing their associate's tires. They are crawling all over each other, vying and jockeying for position #1 in multiple-offer situations. Tempers are flaring. I'm kinda glad to be home, recovering from getting my face sanded and interfacing with my keyboard over people. In case you're curious, this Sacramento short sale agent opted for laser surgery to grind away a few years of short sale-induced wrinkles.

A new spring. A new me. And I celebrated spring by buying a pair of Stuart Weitzman platform shoes in imitation snakeskin from Nordstrom online.

Buyers, on the other hand, are celebrating spring by writing to ask if I will help them to make a lowball offer on a Sacramento short sale. Oh, I know you jokesters are waiting for me to say something wildly amusing to these people, but I have a heart. There is no reason to inflict cruelty simply because people are ignorant. Besides, the facts say it so clearly.

The facts are, as of today, we have 2309 active listings in the Sacramento MLS in Sacramento County. We have 5,791 pending and active short contingent transactions. Of the 5,791 pending and ASC transactions, 2,886 are pending and 2,905 are active short contingent. This means more than half are short sales. Some of those pendings are probably short sales, too.

Of the active listings, 656 are short sales. This means almost 1 out of every 3 homes for sale in Sacramento is a short sale. If you don't now how to buy a short sale, then you you should work with a Sacramento short sale agent who can help you.

Our pendings exceed the number of homes for sale. What does that tell you Sherlock? It tells you you cannot write a lowball offer because 20 other buyers will kick you to the curb.

I wrote to the buyer of the lowball offer to explain what real estate agents do. That we are in the business of helping sellers and buyers buy and sell real estate. How we do actually know in many cases how much the bank wants for a short sale because the bank has told us, sometimes over and over. How we are receiving multiple inquires, which will result in multiple offers and, if he wants to write an offer that a seller will accept, he needs to offer the price the bank wants. If he wants to do that, we're happy to help.

I didn't say what we would do if he doesn't, because I think that's self explanatory. No need to rub his face in it.

You can't help the market, but you can help which agent you choose to be your buyer's agent in Sacramento. It is really tough being a first-time home buyer in this town right now. You probably won't hear this on the news, but inventory is so tight it squeaks and multiple offers are the norm. Yes, even in a down market like Sacramento. There is nothing to buy, people. And there are a lot of buyers.

When I start getting back-up offers on my Sacramento short sales -- you know we're in trouble. Last month, some of these homes, I couldn't beg a buyer enough to make an offer.  I could throw myself on the ground hugging their ankles with one hand outstretched crying: Please, sir, throw me a dime, and they'd kick dirt in my face saying no spare change for you. This month, if you ask me every 3 minutes whether a home is available, I might have a different answer from one minute to the next.

Because I am a top short sale agent in Sacramento, I manage a lot of listings. But I am running out of short sales to sell. Yet, there is huge interest in buying a short sale. There is huge interest in buying any home in Sacramento. If you're interested in selling a home, you should be on the market.

If you're a home buyer, choose your buyer's agent wisely. Yesterday, I received an offer for $30,000 over list price. That amount represents a 15% increase in sales price. Of course, that offer was not even considered because a) the seller had already accepted a good offer and b) it will never appraise at that price.

On another listing, I received an offer for 20% below list price. When we have 5 offers, why would we even consider a lowball offer like that? True, an agent can only advise but it is the buyer who ultimately chooses the price.

Before writing an offer, lick your finger and stick it out there. Which way is the wind blowing? If it's a seller's market, you've got to adjust to it.

Buyers who don't conform to the market don't buy anything. I don't care who you are or how much cash you've got. You've gotta get with the program.

It's no secret that inventory is down in Sacramento. That's because home owners who don't have to sell are not putting their homes on the market. Who is selling in Sacramento? People who need to sell. That list includes those who are transferred, some who can no longer afford a mortgage due to job loss, couples who are splitting up, those with negative equity and people who are dying. When I put it that way, it sounds pretty dismal, doesn't it?

According to First American CoreLogic data, the Sacramento real estate market ranks #10 in the country for the highest amount of negative equity. That number of upside-down homeowners is 44.8%. No wonder my number of Sacramento short sale listings is increasing. For many people with negative equity, a short sale might be the best solution.

Even though pending sales have increased 57.3% over the past 15 months, that number is a bit misleading. I suspect it's because buyers pushed April closings into May. Why they would they do that? Well, for some, it's probably due to slow turnaround times in underwriting. Lenders are scrutinizing loans much more closely and many are demanding review appraisals at the last minute. But for other buyers, the reason their closings were pushed to May is to take advantage of the California homebuyer tax credit that kicked in May 1.

The California Association of REALTORS predicts that the California homebuyer tax credit fund will be exhausted before the end of May. Most likely, it was intended to stimulate sales, but instead, that tax credit is going to buyers who were already in escrow.

Chart: Trendgraphix

The New York Times says there are signs of recovery in the Sacramento real estate market. Well, if you read it in the Times, it must be true, right? :) Part of the basis for this claim is the fact that home buyers and investors are fighting over the few morsels left on the market. Inventory is low. But it's been low for months. Sacramento home buyers and investors have been going neck-to-neck over the choicest homes for months as well.

None of this is news. Except to those first-time home buyers who are still looking at the list price of a home and wondering how low they should go. Those are the buyers whose offers keep getting rejected.

The number of foreclosures is still rising; however, the inventory is not available for sale. Where is it? Some of those bank-owned homes are sold privately in bulk to investors. Some banks are renting them out, waiting for prices to improve. Others are sitting empty as weeds multiply in the front yard.

Come June, the state of California is initiating a 90-day moratorium on foreclosures, which will most likely simply delay the inevitable. The question is when will we receive this tsunami of foreclosures? Nobody seems to have the answer to that.

The fact remains that often the hardest hit markets are the first to recover.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com

Photo: Elizabeth Weintraub, Sacramento Real Estate Agent

How low can prices drop in Sacramento County? That's the question on everybody's mind. Agents and buyers are asking if we're at the bottom, almost like little kids excitedly repeating: Are we there yet? Are we there yet?

Here are charts from Trendgraphix, which are available exclusively to Lyon Real Estate agents, that show what's going on in the Sacramento real estate market.

The first chart shows the foreclosure market in Sacramento, and the activity over the past 15 months through March of 2009:

The horrifying problem with the above Sacramento foreclosure chart is we have NO INVENTORY. The pending sales for March have surpassed the number of foreclosures for sale. We have one month of foreclosure homes available for sale in Sacramento. The hope is, of course, that once the moratorium on foreclosures is lifted, we will see increased inventory. Because the number of homes going through foreclosure in Sacramento is still increasing, but there are very few foreclosures presently on the market.

Almost every foreclosure listing in Sacarmento is receiving multiple offers, which helps to push up the already below-market pricing set by the banks as advised by their REO agents.

This next chart shows the activity of all Sacramento homes for sale over the past 15 months through March of 2009, which include those offered by sellers who actually have equity -- or at least hope that they do:

The pending sales are continuing to rise in Sacramento. Sales are up 24% over February of 2009 and have increased 26% from the same time last year. As you can see, our inventory has dropped by more than 50% over the past 15 months. We have very few homes for sale in Sacramento, and about half are in pending status.

The average per-square-foot cost of a Sacramento foreclosure is now $99 as compared to a home that is not in foreclosure at $113 per-square-foot.

So while the good news is homes are now very affordable in Sacramento, trying to buy such a home can be difficult for a buyer. There is little selection. Multiple offers are the norm on every attractive listing. Prices often mean nothing as they are set artificially low. Which is why it's imperative to hire an experienced buyer's agent to represent you.

I won't go so far as to say every aspiring home buyer will end up with a terrific deal in today's market because it simply is not true. Some Sacramento home buyers will make offer after offer and go back to their rental home or apartment empty handed. There is not enough inventory to go around and competition is fierce. My advice is if you want to buy a home in Sacramento and qualify to do so, hire the best Sacramento buyer's agent you can find to give yourself that edge.

The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.

Images: Trendgraphix, available exclusively to Lyon Real Estate agents