A reporter called yesterday morning to ask me about the rising real estate prices and market recovery in Sacramento. After all, our Trendgraphix reports show a 42% increase in pending sales for June. That's the message delivered by Lyon Real Estate. However, inventory is up about 8% and sales are down by 2%. The average per-square-foot price also dropped by 2% to $125. The reporter asked me to comment on our market stabilization in Sacramento.
Much as I would like to paint a rosy picture of the real estate market in Sacramento, I have to call it the way I see it. And I don't see a big recovery. In fact, I see prices falling. I haven't heard much about this elsewhere but it's going on, I'm telling you. Just wait a few months. You'll see.
In the first half of the year, I could slap a price on my short sale listings close to the prices of comparable sales and expect to get it. MLS reports that more than half of the listings in Sacramento right now are short sales. However, when I pull up the listings and sales for any given area with a lot of short sales, what I see are the active listings, active short contingent listings and pending listings all priced LESS than the comparable sales. What does that tell you?
It tells me that I'm going to have a heck of a time arguing with agents who are doing BPOs for the banks on my Sacramento short sales. Because those agents will consider the comparable sales, which appear to have very little bearing on market movement. I don't like it when the comp prices are higher than the activity in the marketplace, in part because people can't think upside down. But also because it means that prices are falling. You just don't see it yet.
As a Sacramento short sale agent, it doesn't really matter to me personally which way the market moves because, like Eddie Murphy in Trading Places, there is always movement. I don't control it. I can't control it. I just go with the flow and sell those listings.
It's a squirrelly market, and that's what I told the reporter. I said, "Among those who qualified for the home buyer tax credit, anybody with half a brain already bought before June." She probably thought that I said the market was full of squirrels, I guess, which wasn't really what I meant. It's that the buyers who didn't qualify for or missed the tax credit now want to compensate for that loss by slamming those list prices. They want some assurance against future market fluctuation. And who can blame them, really?
Photo: Trendgraphix
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
Elizabeth, I couldn't agree more. Well done. In this market, comps are almost worthless. As much as other agents argue with me, it comes down to what a buyer will pay for the property. Not, what a property in the neighborhood sold for 30 days ago. Most agents forget or don't know that Real Estate is a lagging indicator as much as 60-90 days. That's why the BPO's done today or next week are skewed to the high side.
You certainly do have your finger on the pulse of the Sacramento real estate market. You're like one of those tornado chasers that can sense the storm is changing direction before it does.
We are seeing it too. I predicted this back in January for my market....the tax credit incentive would help short sale owners who were already pretty far into the process. Once the deadline came (to be in contract), I was afraid we would have to drop prices very aggressively to get our short sales in contract, and that's exactly what's happening. I WISH I had the ability to argue with a BPO agent, but the lender won't divulge the name, and when the agent brings it in ABOVE market value (for a non-short sale actually) based on a drive by (so they don't need to contact me) it just makes it that much tougher to negotiate with the lender.
Elizabeth, You are so right, we cannot control the market, just sell our listings! But most BPOs come in too high, therefore impeding the ability to get them SOLD! I enjoyed your post!
Elizabeth: I hear a lot of the same sentiment around here in the Bay Area from other agents (my husband included). I would love to see the article you were quoted in to see how the reported interpreted what you said (squirrels and all) ;-)
I don't have to wait and see... prices are going down here too. List prices and sales prices.
Now this is a market report that I can read and understand. It's thoughtfully written and buyers can understand it. Thanks
Colleen: Can't you take the seller's name and phone out of MLS and make yourself the contact person? That's what I generally do. So the agent has to call me to get in. And I'd really like to see the addendum you use about the grass dying. I need one of those. :)
Hi Cari: It will be in Investor's Business Daily a week from Friday. I think the article they are running on short sales this Friday has something I said in it but I'm not certain. I know the July 30th edition does. As long as they spell my name right, I'm happy.
Congrats on yet another great accolade to add to your amazing career. Where is Colleen's comment? I am equally curious about the addendum with the grass provision. What an interesting idea.
Ya gotta love that bounce in the pendings for the month of June, Elizabeth! I always appreciate viewing Lyon's Trendgraphix.
Elizabeth....I will look for the IBD report. Well done analysis. ~ Doug