Tag Archives: Investing

Sacramento Housing Inventory (Spring/Summer 2013) – Like Trying to Find a Needle in a Haystack

However cliché this title sounds, buyers and some realtors alike are completely discouraged by the lack of homes to choomonoploy housesse from.  I just read the statistic that the median days on the market for a home in April 2013 was 12 days.  In addition,  the inventory has shrunk a bit further since then.  Buyers use to say or think, “If I don’t get this particular property, I will just wait for the next one.”  Now they are saying, “The next one might cost more than we want to pay (or can afford), or we may have to wait 4 months to find it!”

Some home buyers have told me that they are just going to wait until the next dip in the market.  This could be extremely wise, or they could be waiting a while?  Time will tell.  Ultimately, like my dad use to say, “You’ve just got to get on the merry-go-round, or stand on the sidelines and wait.”

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Is the Bubble Going to Burst in Sacramento Housing Market?

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My kids (and adults alike) love these huge bubble makers – they are awesome!  It seems like the public feels the same way about the real estate market.  One investor, friend of mine, who has been in business since the early 70’s – yes, 1970’s) is very skeptical.  He says, “Maybe it’s just the old guy in me talking [kind of sounds like my dad], but I’m sure if this appreciation in the market is real or manufactured?”  He went on to say that with the government backing so many loans at 3.5% down, so many home buyers are instantly upside down in their home after they buy it, as it takes about 8-10% to sell it.”  I’ve never really looked at it like that before. My response was, “but hardly any other buyers are able to even get an offer accepted, let alone close on a home, due to all the investors gobbling up the inventory with cash!”  My seasoned friend mused on, “Even with unemployment going down, I wonder how many of these new jobs are substantial… solid jobs – ones where people are making a good living and able to buy or invest with confidence.”   I left that conversation thinking:  1) The market will keep going up as long as there is demand, and I know with my list of buyers, there is HUGE demand.  And, it will keep going up as long as there is a perception of health in our economy – that seems what everyone wants to feel, even if it’s just a perceived reality.  How long will it last?  Or, at what price are these home unattractive to both investors and buyers?  2) Especially for investing… proceed with caution.  Another friend at the table said that he will only invest if he knows that he can get out safely within 6 months.  It’s interesting to hear seasoned investors say they are unsure and don’t know, especially when the wisdom of the day is to make certain proclamations like, “We got 2 years of appreciation!” or “Once the unemployment rate falls to ____, then interest rates will go up.”  Some of these statements have truth embedded, but beware of those who “knows for sure.”

Another respected voice, Jed Kolko (Cheif Economist) says in a recent article, “that the next housing bubble is probably just a matter of time. But, as Trulia’s Bubble Watch shows, that time is not now.”  See this interesting article HERE.

Curtis Park Village Developement, Sacramento CA

As a Curtis Park resident, I’ve been following the most recent news on the Curtis Park Village development – here’s a recent piece that goes a little beyond our Viewpoint news.

http://www.sacbee.com/2013/05/05/5393743/petrovich-to-break-ground-on-long.html#mi_rss=Business

Ten Years of Housing Inventory in Sacramento – from Ryan Lundquist

If you are like me, it helps to see a picture to help explain and understand complex concepts.  An appraiser friend of mine does an excellent job of this on a consistent basis – check out Ryan’s most recent blog post HERE

Sacramento Real Estate Bubble?

This originally  was a sent out as a market update letter to my clients.  For a good read, check out this article.

Since the end of last year we’ve seen more gradual increases in most Sacramento property values.  Some of you are no doubt thinking that properties values will just continue to increase and holding on must be the best thing to do.  This could be the answer, but let me give you a few ideas to chew on, as to why the market may not continue to go up.Image

1)      The main reason behind this small bubble of increase is the lack of and low inventory (“supply”) and high demand.  If the market gets flooded with inventory, then this dynamic changes and values could go down again.  Some still talk about the bank’s holding back their foreclosure … this is still a big question mark, but if they are, then the flood gates could open again driving the market down. 

–          There has been a 20% reduction of foreclosures in the market since last year.

–          Forty eight (48%) of all sales are still distressed homes.

 

2)      Low interest rates keep money cheap (for those who can borrow it) and keep demand high for buyers, both investors and home owners.  Right now the buyers are stacking up and are having a difficult time purchasing property due to the high level of competition and demand (again, pushing up prices).  Everyone wants to get in on the action of buying a property, locally, the Bay Area, and beyond.  While the Feds continue to promise that interest rates are stable, if they do go up (a factor that can change things dramatically), the increase in home values will level out.

 

3)      Employment… In the Sacramento and California at large, unemployment rates remain right around 10%.  I believe that until this goes down, people’s ability (and confidence) to buy and absorb the higher price tags will not exist and the market will flatten.  In conjunction with the possibility of higher inventory and higher interest rates, this small bubble could pop. 

As for now, the market is ripe for selling.  How long will it last?  Let’s watch these factors and see what the market does in the future.  I would love to hear from some you other economists out there that may have other insights into the market.  Feel free to give me a call, email, or come in for a conversation.  If you are interested in seeing what your property is worth (and receive some coaching on what to do to make it worth more) or need some creative alternatives, let’s connect soon. Either call or email – 916.669.9030 / Keith@BurmasterRealEstate.com

Sincerely,

 

Keith Klassen                                                                                    

Broker                                                                                              

DRE#01867031

Moisture in Windows – Real Estate Sacramento

I have viewed and sold so many homes with dual pane windows that have failed.  The clear, or should I say unclear, indication is fogged up glass.  When you try to clean them, you quickly realize that there is moisture trapped in between the two panes, hence the window has failed.  Most inspectors will tell you that this does not diminish the effectiveness of the window, rather it just looks ugly.  And typically the remedy is replacing the glass or the window, which can be costly.

I ran across an article/ad regarding a newer technology, whereby they can de-moisturize and repair the window by just drilling to small holes in the corners.  Sound great if it actually is legitimate.

Has anyone out there utilized this technology?  And more importantly, does it work?  If so, this would be a great innovation to all those failed windows out there.

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030

KeithAKlassen@gmail.com

Things That Eat Your Home (Sacramento CA)

Viewing thousands of homes and participating in hundreds of inspections, there are things that become familiar sights – things to look out for that could adversely affect the purchase of a home.

I showed an investor a home that I was about to list.  Originally it was going to be a flip, but the owner has his hands full with about 20 other homes that they are rehabbing.  When previewing this home, there were the normal checklist-thoughts of what needs to be done to get this home ready to rent or sell:  Paint and carpet, rip out and rehab kitchen, new HVAC unit, restore garage from illegal conversion, etc.  Before we left, I pulled back a window curtain and ah ha….

This my friends is a termite “tunnel.”

While these items may seem daunting, they are curable at a relatively reasonable expense.

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030