In a society that thrives on instant gratification.....patience is not always rewarded. Luckily, when it comes to the Sacramento housing market, patience is being rewarded.
Prices are dropping and so too is the cost of borrowing (assuming you have a down payment and good credit....otherwise you might not be able to find a loan at all).
We made a bet that the housing market could not continue to appreciate and it appears to be paying off. Others made a bet that it would, including individuals who feared they would be priced our forever, speculators and investors.
I'm not sure how long our patience will last. After we hit bottom, I believe there will be a fairly sustained period with no appreciation before the market starts to climb again. I am looking for bottom, and ideally waiting till I see some modest appreciation.....but in all honesty, I think we will pull the trigger somewhere in between.
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I have learned to bet against the crowd.In 2004 I could already see the bubble and what was going on. It became a get rich quick scheme as the stock market in 2000 was.Buy into weakness and sell into strength.
I'm weighing my fear that the very specific type of house that I really want to buy will disappear from the market (I'm down to 5) vs. the suspicion that several that went off the market are heading to foreclosure. Only one of those 5 is within less than 100K of where I would buy at, and it's not in the northern suburbs that I favor.
I did sign up with BuySide Realty this past weekend and I am prequalifying for a mortgage, but that is only to hedge my bet that it will be at least 2 years before prices come down enough for me to be able to afford a house that I really want. If that one house drops another 35K, I'll probably make an offer.
Years ago my wife and I convinced ourselves that only "a very specific type of house" would satisfy our aesthetic sense, and bring balance to our day-to-day existence.
We owned that house, which consumed much of our time and money as we restored it to it's original condition. It was featured in home tours, architectural books and magazines, and we sold it to people who clearly lusted after it.
Although we felt some satisfaction at the restoration work we did with our own hands, the "owning" of the house did not bring us happiness. In the end, it was just part of our "stuff" which required us to keep jobs we didn't like and live in a city that was going downhill.
We are now enjoying living well below our means in a leased house in a pleasant neighborhood, turning down jobs we don't want, and traveling and seeing friends when we choose. We will wait to buy an "ordinary" house that suits our true needs and is flexible to our uses.
I looked at some home in the Elk Grove area over the weekend and found some nice homes in decent areas of Elk Grove in my price range. (Low $300k for newer 2000 sqft homes in better parts of Elk Grove) These homes mostly were purchased in 2005 at around $500K range and were now bank repos.
With nearly $200K price drops, Elk Grove homes are definitely in my purchase range. Unfortunately, Elk Grove is not on my top areas for me to live. For a short time, there was a strong urge for me to seriously consider purchasing there now but I came back to my senses. If I wait bit longer, I should be able to purchase those types of homes in areas I really want to live in such as Gold River, Folsom, & Roseville. I seem to be having more of these self struggles these days.
Probably the best thing to do is to lay off of the MLS for six months and then come back for some good bargains, but that is impossible. I am hooked.
Welcome to the club Mike...that's exactly how this blog got started. I needed to feel like I was doing something constructive while I waited and couldn't lay off the all the free information out there.
Mike,
That is alot of territory to cover. Do you relish traffic stagnation or do you work at home? I mean, Elk Grove is a long way from Roseville.
If you feel you should pull back, try picking one area to look at instead of a 30 mile spread.
I work in downtown and regardless whether I purchase my home in Gold River, Roseville, Elk Grove my commute will not be that much different. I will be riding Light Rail (I currently ride Light Rail from my current rental house). I am looking at 45min to 1hour commute one way.
Best commute for me would be to live in Natomas area but schools over there are not too good and I have two young kids that will be using the public school system soon and therefore good school is on top of my purchase priority.
s
Finding myself real short today on client visits, and with permission for taking some PTO, I did drive-bys on some inactive properties to check on their status. One was definitely off the market with people living in it, one had the "pending" sign up and was still vacant after going off MLS a few weeks ago, one MAY have had people living there -- or may not, hard to tell, one was actually back on the market with a different agent and somehow escaped my obsessive trolling of MLS, and one is now For Rent. I may call about For Rent.
At any rate, just driving around these areas was really calming and restored my faith in my ability to wait it out.
Wow, I love being in the (cyber) company of kindred spirits.
My husband and I signed up for another year-long lease to expire in August '08 as we wait the market out. The funny thing is that although we're government employees, we make 3-4 times the median income for the Sac metro area, depending on whose measure you use. Our refusal to buy stems from a very simple fact: Buying an overpriced home erodes our disposable income and our wealth. I believe that, given what we earn, we should have a lot nicer house for the money than the small crappy houses that builders had been trying to foist on us at $400K or more. Anybody with a brain knows that the salaries in the Sac metro area don't support $400K houses. IMHO, there's not much in the Sac metro area that's really worth more than $300K, except perhaps the Fabulous Forties and parts of Fair Oaks.
Nope, we're waiting, too. And in walking around Elk Grove where I currently rent a 2100 sq ft home for $1500 a month, I'm seeing a lot of homes going up for auction. Huge homes. I recently saw what looked like a 2200 sq ft. JMC home up for auction. Starting bid: $50,000. I did a triple take since I didn't have my glasses on and stepped back in the middle of the street to make sure I wasn't delusional. I've seen similar homes with starting bids in the $100K range. Two years ago, you couldn't have touched these homes for less than $500K, and realtors looked at you like you had sh*t on your shoes if you weren't preapproved.
I hate to say it, but this downturn gives me hope. The market should have never gotten this out of control.
On the flip side, I have inlaws who bought within the last six months. BIL works two jobs to pay a $3,000 monthly mortgage. I told my husband that even though we could afford a $3,000 mortgage, I would never, EVER, pay that much for a tract house in the Sac metro area. In the words of Niecy Nash of "Clean House," that's just mayhem and foolishness. I refuse to make the builders, realtors, and lenders any more wealthy off my hard-earned dollars.
Let the bloodletting begin. I'm sorry for those who were duped into bad loans, etc., but this market needs to get back to reality given what the job market and average earnings are.
This market needs an enema!
Here are the specifics on the home for auction I mentioned with the $50K minimum bid. It's at 6601 Canner Court, Elk Grove, 95757. You can learn more about homes for auction in the Elk Grove area at williamsauction.com and ushomesauction.com. No, I'm not a shill for them -- I'm just doing my small part to document the deflating of the real estate bubble.
6601 CANNER CT ELK GROVE, CA 95757
Description
4BR 2.5BA 2618sf+\- single-family. Southeast of Valley Hi Country Club. Built 2005. Approx .20ac lot. Taxes approx $6900 ('06)
Directions
WEST on DORCEY DR toward GILLIAM DR. Turn LEFT onto GILLIAM DR. Turn RIGHT onto MATINA DR.Turn RIGHT onto WILLARD PKWY.Stay STRAIGHT to go onto FRANKLIN BLVD / CR-J8.Turn RIGHT onto ELK GROVE BLVD. Turn RIGHT onto MCKENNA DR.Turn RIGHT onto CANNER CT.
Get directions from another location here.
Open House
1-4pm Sun. Sep. 16th & 23rd and 2hrs prior to sale.
Opening Bid
$50,000
Sells
6:45 PM Thursday, September 27, 2007
Sale Location
6021 COOP DR, ELK GROVE, CA 95757 Info
WTB - Thanks for the auction info.
By the way how did it go finding a new rental....last I remember you posting you were looking.
Hi BT,
After getting turned down for our first choice rental in Roseville, we decided to stay in Elk Grove. We couldn't find a rental of the same size for the same price, so we decided that if we were going to pay more, we'd get more space. For an additional $250 bucks a month, we increased our square footage from 1350 to 2172 sq feet. It came in handy, as we had to host a family gettogether this month after a death in the family. So, we're locked into Elk Grove for another year, and I'm actually kind of glad. My sisters bought out here, and I like my new neighbors alot. I think owners expect the worse with renters, so I think we've been a pretty pleasant surprise to our neighbors since we're quiet and my husband actually mows part of our neighbor's lawn when the neighbor can't get to it.
BTW, I went to check out the house on Canner. It kinda resembles the Kensington model JMC home that's being sold for $500K and change in Roseville at the Longwood development. Someone remarked that it looked like it hadn't even been lived in -- there was still a new appliance sticker on the stove. The house on Coop was even larger -- 3600 sq ft, I think -- but whoever lived there was pretty angry about the foreclosure. They ripped out the kitchen appliances. Yep, they even took the stove. Now, that's pretty angry.
It's sad -- it's hard to believe that this area could possibly turn badly as quickly as it looks like it might. The neighborhood association is the only hope, IMHO.
On another note, I went to visit the Meritage homes development in Madeira, the new Elk Grove neighborhood off of Bruceville and Elk Grove Blvd. Looks like they're still pricing like it's 2003. I'm waiting for 2001 prices. And I wonder if there's still a market for $500K/2500+ sq ft homes in Elk Grove given all that's happening here.
If I get a chance to attend the Williams auction, I'll report back. I'm curious to see what the reserve is on the Canner house. I also feel a little sorry for the jackrabbit that's taken up residence in the unlandscaped back yard there.
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