AgentBubble, a Sacramento bubble blogger's most admired RE professional, has graciously agreed to do an online interview.
Background: He has been in the industry over a decade and has business training, which means he sees the industry for what it is. Of course my personal favorite, unlike other Realtors who drive fancy cars to make up for their incompetence, AgentBubble drives a socially responsible one. He can be reached at agentbubble at gmail dot com.
What affect, if any, do you think the internet and the widespread availability of public records have had on the real estate market?
It has had a profound effect on the market. Most importantly, buyers now have more tools at their disposal to research a property prior to making an offer. In the past, a buyer would have to rely 100% on their agent to perform research/comps on a property. Now, a smart buyer can know the loan balance of the sellers as well as how long they've owned the property and what they paid for it. At the same time, I think tools such as Zillow have actually hurt some sellers by giving them values on their properties that are too high, causing them to chase the market down and get less than they should have.
Do you think anything has fundamentally changed in the real estate market to make this cycle different from previous ones?
When I started real estate 10 years ago, my first conversation with a buyer would be to tell them to multiply their yearly income by three and that's where the top range for homes would be. A few years later, I'd say they could go up to four times their income with FICO scores above 775. The lenders were on the same page and everything worked out Great. Over the last 5 years, things have changed dramatically for the worse. Buyers with incomes of $75,000 are buying $500,000 plus homes with no money down and interest only loans. I think the blame lies equal on the lender as well as the buyer.
Have you seen a decrease in investor activity? If so how much?
Back in 2002-2004, I'd say half the homes I sold were to investors. Just recently, I looked at the tax records for a JTS subdivision called the Ranch located in Wilton and was amazed at the number of investor owned properties. Most were sold late 2004/early 2005. Now, the investors seem to have left the state. I recently had a house listed at $470,000. It was foreclosed on, and an investor bought it for $340,00 and then sold it for $400,000 two weeks later. He undercut a competing house by $30,000 on the same street and was successful in flipping the property. I'd call this more of an exception than the rule (as evident by the Flippers in Trouble blog).
Do you think there is a lot of pent up demand waiting for prices to come down, or do you think the proverbial "well is fairly dry"?
I wouldn't say a lot, but there are definitely people out there still buying homes, even in areas where it makes no economic sense for the average person. Take Elk Grove for example. In my opinion, that's probably the worst area to buy in right now because of the tremendous number of foreclosures and short sales as well as the fact that the averages/medians have dropped so significantly in such a short period of time. I think the subprime meltdown has done a lot to suppress sales. Also, the fact that so many people are losing their homes has finally sunk in for some people sitting on the fence that have realized maybe they shouldn't be buying a Ferrari on a Toyota budget.
What is your favorite neighborhood in Sacramento and why?
There are three areas I really like. First, I'm a big fan of Carmichael and Fair Oaks. Not a whole lot of tract homes and the homes tend to have larger lots where you can't jump from one roof to the next. It's close to everything including both major freeways as well. Lots of good schools for the kids too. The prices have finally started coming down, so I'm hoping we'll be able to afford that in less than 2 years. I also really like the country land in Galt/Wilton. Owning 10 acres and a farmhouse has always been a dream, but with land prices at $300,000 for 5 acres, it's just not feasible right now.
We almost bought a home in El Dorado Hills last year but pulled out at the last moment. It was a custom home in Waterford going for $740,000. I just saw a home nearly identical on a nearby street going for $655,000. EDH is a great area, but the uncertainty with the asbestos is not something we want to gamble with. I know many have strong feelings one way or another on this issue, but it's just our personal opinion. I certainly respect anyone that chooses to live there.
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11 comments:
Interesting profile - exactly what kind of car would a Realtor drive that is also socially responsible - a tandem bicycle? Minivan? Can you really fit clients in a Prius or do they have to bring another car?
Nice note on professional flipper actually making money in this market, also.
From our personal experience, we never get to ride in the flashy Realtor cars anyways. We have two kids that need to ride in carseats so we always have to drive separate.
"First, I'm a big fan of Carmichael and Fair Oaks. Not a whole lot of tract homes and the homes tend to have larger lots where you can't jump from one roof to the next."
Here here!
"Now, a smart buyer can know the loan balance of the sellers as well as how long they've owned the property and what they paid for it"
Curious, how can I find out this information?
Make that two votes for never ridden in the Realtor's car.
In fact, the Realtor often rode with us.
Same issue, two kids in car seats.
Who rides in realtor's cars these days? I thought people just saw homes on realtor.com told their agent who would arrange a showing and then meet them there. That's if they could pull their agent away from their occupation of finding new clients 95% of the time and helping existing clients 5% of the time. I know there are good agents, but still.
"Now, a smart buyer can know the loan balance of the sellers as well as how long they've owned the property and what they paid for it"
I know that I can ususlly get the last sold date and price from zillow; I would also like to find out how much debt seller have (is it possible to find out if they have HELOCs too?). Do tell.
I have ridden in realtors' vehicles, often. Isn't that considered "carpooling?"
I get the information from Zillow, but I prefer to go through the Zip Realty page because it organizes it. You can save homes and track them, you can look up maps and neighborhood info, and you can see what the last selling price was on the home most of the time. It won't tell you if they HELOC'd, though. It also keeps a running tally of all price reductions, and tells you how many days on market. If a house goes inactive and you keep it in your saved homes, when it comes back on the market you can go to your old listing and look up the original price and number of days it was listed when it went off market, to give you a more accurate picture of the situation.
You have to sign up, but it's free and you get a minimum of annoying ads -- maybe one every month or so? You can also ask them to notify you if any homes that fit your specifications come onto the MLS.
It's so dang easy that it's spoiled me. I never browse the Bee's MLS ads any longer. But I do occasionally go to the Bee's "recent home sales" section and look up what homes actually sell for in a given zip code. The Bee is just way behind on that information, so you can't find anything within the last 3 or so months, though.
Cmyst,
We have the same strategy >; )
I just wish Ziprealty covered the remote parts of Yolo like Winters.
How can I get in touch with "Agent Bubble?" I'd like to discuss our needs - he/she sounds very fair, rational, and informed (these are not common traits in the RE industry.)
-EJ
His e-mail is agentbubble at gmail dot com. But I think he is camping with his family at this moment.
We shopped around for an agent for quite some time when we first moved here in October. And none of them seemed to have a clue about what was happening in the market on any level but their own personal experience (and of course the NAR newsletter hype that they read). So it was very refreshing to find a savvy realtor who, not just sees the big picture, but also understands it.
Thanks! I'll email him - I appreciate it!
(Keep up the good work!)
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