Monday, August 20, 2007
July DataQuick for Folsom & El Dorado Hills
Will let the data speak for itself this month since my housing obsession is on the back burner while I get some real work done. All data has been derived from the Sacramento Bee Home Sales Charts found on their website. This data is furnished monthly by DataQuick.
Friday, August 17, 2007
Shedding Light on the Shadow?
For some time now, shadow inventory has been a topic of speculation on Lander & Max’s blogs. In addition, there has been discussion about what is and isn’t present in the data we all rely on. My curiosity got the better of me, so I asked my Realtor for some MLS sales stats from Jan 1, 2007 to present. I compared the MLS data with the data on SacBee’s site from DataQuick.
While this doesn’t specifically identify the shadow inventory everyone is talking about, it does help identify what type of activity is occurring and by whom.
After considerable data cleaning and comparison efforts, at long last I have some general stats to share. Of course there are plenty of caveats, which are listed below.
The data compares Folsom and El Dorado Hills single family home sales in DataQuick from Jan 1, 2007 to June 20, 2007 with MLS for that same period. In general the MLS contains about 2/3 of all sales (69%) including some new construction sales. Approximately 17% of all homes sold during that period are new construction. Please note that these results are not likely to be indicative of the rest of Sacramento.
MLS & DataQuick - I did my best to match up the MLS data with DataQuick. However I didn’t diligently paw through the remaining records manually in the MLS to confirm it wasn’t a match.
MLS Only – These records didn’t match up with DataQuick. There were a couple that looked to be addresses of the new construction. I did find some condos that were not identified as such and pulled them out.
DataQuick Other – These records didn’t match up with the MLS, and didn’t appear to be new construction. Some would be FSBO, others are the initial foreclosure sale to the bank of a home that was later sold via MLS. However these two categories can’t account for the full data set. Not sure if the rest can be considered shadow or not.
Listed Once on MLS and Twice on DataQuick – These appear to be distressed properties that are sold to the bank, and then sold via MLS. The initial sale to the bank is considered under “DataQuick Other.”
New Construction - I did my best to identify the new construction, based on year and some other general indicators in DataQuick but this data is more of an approximation. Some of these records were in the MLS, but the vast majority were in DataQuick.
While this doesn’t specifically identify the shadow inventory everyone is talking about, it does help identify what type of activity is occurring and by whom.
After considerable data cleaning and comparison efforts, at long last I have some general stats to share. Of course there are plenty of caveats, which are listed below.
The data compares Folsom and El Dorado Hills single family home sales in DataQuick from Jan 1, 2007 to June 20, 2007 with MLS for that same period. In general the MLS contains about 2/3 of all sales (69%) including some new construction sales. Approximately 17% of all homes sold during that period are new construction. Please note that these results are not likely to be indicative of the rest of Sacramento.
MLS & DataQuick - I did my best to match up the MLS data with DataQuick. However I didn’t diligently paw through the remaining records manually in the MLS to confirm it wasn’t a match.
MLS Only – These records didn’t match up with DataQuick. There were a couple that looked to be addresses of the new construction. I did find some condos that were not identified as such and pulled them out.
DataQuick Other – These records didn’t match up with the MLS, and didn’t appear to be new construction. Some would be FSBO, others are the initial foreclosure sale to the bank of a home that was later sold via MLS. However these two categories can’t account for the full data set. Not sure if the rest can be considered shadow or not.
Listed Once on MLS and Twice on DataQuick – These appear to be distressed properties that are sold to the bank, and then sold via MLS. The initial sale to the bank is considered under “DataQuick Other.”
New Construction - I did my best to identify the new construction, based on year and some other general indicators in DataQuick but this data is more of an approximation. Some of these records were in the MLS, but the vast majority were in DataQuick.
Thursday, August 16, 2007
Terminal Velocity
I was checking up on the latest market news when I spied this article. I would almost be willing to bet, if this guy stays in California, he will end up in Sacramento. Only those coming from more expensive areas can "afford" to move here. Many of those that have been living here for some time are tapped out/fed up and moving on. In my small circle of friends and acquaintances here in the Sacramento area, quite a few seem to be packing for less expensive areas (for the same or better job quality).
Last month I was getting a bit depressed about our personal situation because prices didn't seem to be moving much. Looks like we have reached terminal velocity and I am just praying the nation survives the trip.
Last month I was getting a bit depressed about our personal situation because prices didn't seem to be moving much. Looks like we have reached terminal velocity and I am just praying the nation survives the trip.
Be careful what you wish for
All I really want is to secure a small piece of the American Dream without leveraging my entire future. Is affordable housing too much to ask? Apparently so.
As of my last quick peak at the market this morning, it appears my dream might come with some serious consequences for the entire country. While I knew some casualties were going to be necessary in the RE and associated construction and mortgage industries, I didn't think it would create a panic in the overall economy.
This reminds me of an anecdote we use a lot in my industry. If a frog is put in a pot of boiling water...it knows to jump out right way. However if its put in a pot of room temp water that is on the stove, it doesn't realize the water is too hot until its too late, because the water is heating gradually.
Been on a crazy busy travel schedule lately, but I have a special treat I hope to post stats on tomorrow.
As of my last quick peak at the market this morning, it appears my dream might come with some serious consequences for the entire country. While I knew some casualties were going to be necessary in the RE and associated construction and mortgage industries, I didn't think it would create a panic in the overall economy.
This reminds me of an anecdote we use a lot in my industry. If a frog is put in a pot of boiling water...it knows to jump out right way. However if its put in a pot of room temp water that is on the stove, it doesn't realize the water is too hot until its too late, because the water is heating gradually.
Been on a crazy busy travel schedule lately, but I have a special treat I hope to post stats on tomorrow.
Tuesday, August 14, 2007
First, Last and Second Chances
WSJ was awash today in news of market turmoil related to credit and mortgages. One article cited the fact that previously 70% of appraisals resulted in loans, today that has been reversed, and now 70% of appraisals result in rejections.
When the purchase price and appraisal on our home ended up being the exact same amount back in 2002 (we purchased with a no money down loan), it was a glaring sign that there was something suspicious and self-reinforcing going on in the RE industry.
Today the effects of this turmoil are starting to be felt by more members of the general public. The cost of jumbo loans are going up and loan products like the one we used to get into a house are starting to dry up. I honestly don't know how any first time home buyer can afford to get into this market now (on either of the coasts). Until something comes along to change that fact, I don't really see this market recovering.
I heard somewhere that if its been over 3 years, you qualify for first time home buyer loan products. At this rate we may get a second chance at a first time.
When the purchase price and appraisal on our home ended up being the exact same amount back in 2002 (we purchased with a no money down loan), it was a glaring sign that there was something suspicious and self-reinforcing going on in the RE industry.
Today the effects of this turmoil are starting to be felt by more members of the general public. The cost of jumbo loans are going up and loan products like the one we used to get into a house are starting to dry up. I honestly don't know how any first time home buyer can afford to get into this market now (on either of the coasts). Until something comes along to change that fact, I don't really see this market recovering.
I heard somewhere that if its been over 3 years, you qualify for first time home buyer loan products. At this rate we may get a second chance at a first time.
Monday, August 13, 2007
Proliferation & Costo-tization
Its time once again for a slightly off topic post on the factors driving our wants and "needs" for a larger house.........
When I first moved to Sacramento in the fall of 1995 my dad was able to fit all my worldly possession in the back of his truck. Fresh out of college, my possessions included a beanbag, a bike, a microwave, and of course some clothes and CDs.
When I returned to Sacramento in the fall of 2006 with my husband and two kids in tow, we had enough stuff to fill an enormous 24 foot Budget Truck, two cars, and a really old old fishing boat.
The amount of stuff I accumulated over those 11 years is staggering if you think about it (not to mention the hubby and kids). It got me thinking about why us Americans accumulate so much stuff. When we tour older houses I can't help but notice how little storage space there is. The closets are tiny by today's standards (especially at the house we just sold). I don't think any other generation, or for that matter culture, can match our ability to purchase and store "needed" items.
First and foremost.....from birth we are bombarded with messages to consume. Whether we like it or not, we respond to these messages, telling us we will be more popular, sexy, envied etc. if we buy product "X".
Second....what I will call the Costco-tization of merchandise. Costco appeals to our sense of value. We see and purchase items that we never knew we "needed" when we go there. Many of these items elegantly carry out a single purpose in life. Take for instance, the Margarita maker. It very elegantly makes Margaritas, but how come you can't just use a blender, or make your Margaritas on ice? What is most unfortunate about this specialization in gadgetry is the fact that we rarely use these gadgets. And of course, the more gadgets we purchase, the less we use our general multi-purpose gadgets. Its a slippery slope of proliferation. While I chose to pick on Costco, Sam's Club, BJ's etc., and even normal retail stores like Bed Bath Beyond, all feed this addiction of ours.
Third....what to get for the people who have everything? We give and get gifts. Over the years this stuff really adds up. This gift giving feeds off item number two above. We start buying our friends and family very specialized items, like creme brulee torches, since they don't "need" anything else.
Fourth.....we don't fix things anymore. The media, and the company's whose products they promote, have conditioned us to purchase new electronic gadgetry every couple years. If they break, we never fix them. Instead, they have made the economics of purchasing a new, bigger and better ones more favorable. Many of us now throw away perfectly good cell phones, PDAs etc., just because we want one with more features.
And finally......I think this goes back to the anti-socialization issue a bit. We no longer have communal property. Things like ladders, which you only use very rarely, used to be owned by a community. This community property was then replaced by our ability to borrow from neighbors (which we all used to know really well). Now we don't have community, and we don't know or trust our neighbors, so we end up purchasing instead. These items then fill our garages and kitchens, and require us to purchase a large house to fit them all. Luckily some sites, like Craigslist, and Freecycle have allowed us to purchase and then unload these items a little more easily.
My personal goal, as of late, is to not purchase things unless I will use them at least every 3 months. While this doesn't sound like much, its surprising how many items in a house/garage don't meet that criteria.
How much stuff do we really truly need? (notice no quotations this time)
When I first moved to Sacramento in the fall of 1995 my dad was able to fit all my worldly possession in the back of his truck. Fresh out of college, my possessions included a beanbag, a bike, a microwave, and of course some clothes and CDs.
When I returned to Sacramento in the fall of 2006 with my husband and two kids in tow, we had enough stuff to fill an enormous 24 foot Budget Truck, two cars, and a really old old fishing boat.
The amount of stuff I accumulated over those 11 years is staggering if you think about it (not to mention the hubby and kids). It got me thinking about why us Americans accumulate so much stuff. When we tour older houses I can't help but notice how little storage space there is. The closets are tiny by today's standards (especially at the house we just sold). I don't think any other generation, or for that matter culture, can match our ability to purchase and store "needed" items.
First and foremost.....from birth we are bombarded with messages to consume. Whether we like it or not, we respond to these messages, telling us we will be more popular, sexy, envied etc. if we buy product "X".
Second....what I will call the Costco-tization of merchandise. Costco appeals to our sense of value. We see and purchase items that we never knew we "needed" when we go there. Many of these items elegantly carry out a single purpose in life. Take for instance, the Margarita maker. It very elegantly makes Margaritas, but how come you can't just use a blender, or make your Margaritas on ice? What is most unfortunate about this specialization in gadgetry is the fact that we rarely use these gadgets. And of course, the more gadgets we purchase, the less we use our general multi-purpose gadgets. Its a slippery slope of proliferation. While I chose to pick on Costco, Sam's Club, BJ's etc., and even normal retail stores like Bed Bath Beyond, all feed this addiction of ours.
Third....what to get for the people who have everything? We give and get gifts. Over the years this stuff really adds up. This gift giving feeds off item number two above. We start buying our friends and family very specialized items, like creme brulee torches, since they don't "need" anything else.
Fourth.....we don't fix things anymore. The media, and the company's whose products they promote, have conditioned us to purchase new electronic gadgetry every couple years. If they break, we never fix them. Instead, they have made the economics of purchasing a new, bigger and better ones more favorable. Many of us now throw away perfectly good cell phones, PDAs etc., just because we want one with more features.
And finally......I think this goes back to the anti-socialization issue a bit. We no longer have communal property. Things like ladders, which you only use very rarely, used to be owned by a community. This community property was then replaced by our ability to borrow from neighbors (which we all used to know really well). Now we don't have community, and we don't know or trust our neighbors, so we end up purchasing instead. These items then fill our garages and kitchens, and require us to purchase a large house to fit them all. Luckily some sites, like Craigslist, and Freecycle have allowed us to purchase and then unload these items a little more easily.
My personal goal, as of late, is to not purchase things unless I will use them at least every 3 months. While this doesn't sound like much, its surprising how many items in a house/garage don't meet that criteria.
How much stuff do we really truly need? (notice no quotations this time)
Friday, August 10, 2007
Sale Price Inflation Revisited
A while back I did a post on how the sale price of a house can be inflated by giving cash back to the buyer at closing. This makes overall market appear to be holding up much better than it really is. In fact, when we sold our townhouse in Virginia to move back to California, almost all the comparable sales had subsidized the borrowers (I'm sure this was also related to the fact that our development was entry level homes, so first time borrower's didn't have the cash for down paymenta and closing costs). This phenomena was rare back in 2002 when we bought. On an aggregate level, I think it makes the RE statistics look much rosier than they really are, particularly at the lower end.
Based on the comments from my earlier post, I found out this doesn't typically occur in California the way it does in Virgina. Although I did see a post a while back on OC Renter's Blog highlighting this activity as fraud. However in that case, $40,000 is a lot more than just closing costs.
Most likely, it doesn't occur in California because the buyer pays taxes on the purchase price of the house, so there is an incentive to make that purchase price as low as possible. In Virginia you pay taxes on the assessed value of the house, so a couple thousand added on to the purchase doesn't do any harm to the buyer. In both cases the seller does have to pay RE commission on it, but in this market, they are lucky to even have buyer with a GFE.
Based on the comments from my earlier post, I found out this doesn't typically occur in California the way it does in Virgina. Although I did see a post a while back on OC Renter's Blog highlighting this activity as fraud. However in that case, $40,000 is a lot more than just closing costs.
Most likely, it doesn't occur in California because the buyer pays taxes on the purchase price of the house, so there is an incentive to make that purchase price as low as possible. In Virginia you pay taxes on the assessed value of the house, so a couple thousand added on to the purchase doesn't do any harm to the buyer. In both cases the seller does have to pay RE commission on it, but in this market, they are lucky to even have buyer with a GFE.
Thursday, August 9, 2007
The Weekly Screen Scrape - Mind the Gap
The last three weeks have seen similar trends. Lots of activity, contracts, price drops, new listings, escrow closings, and some folks giving up and taking their listing off the MLS.
The gulf is widening between the price per square foot of houses still on the market compared to those under contract. The under-contract average asking price per square foot is down to $203 in Folsom and El Dorado Hills! Of course this just applies to the houses in my search criteria (20 pending and 64 still on the market).
Looking forward to seeing the July and August sales stats.
P.S. I was going to give special kudos to the person who could give the original reference from the title of the post...but Wikipedia makes things too easy these days.
The gulf is widening between the price per square foot of houses still on the market compared to those under contract. The under-contract average asking price per square foot is down to $203 in Folsom and El Dorado Hills! Of course this just applies to the houses in my search criteria (20 pending and 64 still on the market).
Looking forward to seeing the July and August sales stats.
P.S. I was going to give special kudos to the person who could give the original reference from the title of the post...but Wikipedia makes things too easy these days.
Wednesday, August 8, 2007
Price Points - El Dorado Hills
Did a quick check of the MetrolistMLS data for El Dorado Hills. Looks like a price point has emerged. There aren't many houses pending above $475,000. But almost all are pending, with some exceptions below it (average family sized houses).
This makes sense to me of course, since my price point is $450,000 or below. I guess there are a lot of average buyers out there! I just wish the sellers would figure this out and start lowering their prices, cause I am really getting tired of buying time.
This makes sense to me of course, since my price point is $450,000 or below. I guess there are a lot of average buyers out there! I just wish the sellers would figure this out and start lowering their prices, cause I am really getting tired of buying time.
Frame of Reference
How we think of our homes has a lot to do with our purchase decision. I see several general stereotypes.
- Some folks see their home purely as investment, buying and selling often. They rarely personalize a home and never really set down roots in the local community.
- Some folks see their home as a place to live and call their own (i.e. their piece of the American Dream). They are proud of their home an involved in the community.
- Some folks see their home as a retirement strategy. They want to own a home outright by the time they retire in order to use their retirement income for other necessities and activities.
- Some folks see their home as the place where the often go when they are not at work.
I'm sure there are more types, and obviously some of these are compatible. For instance I would say I am part American Dream part Retirement Strategy. On the retirement strategy side, with a 30 year fixed rate loan, I should have purchased a year ago if I wanted to retire mortgage free by 65....sigh. Although chances are, retirement age will be closer to 70 by the time I get there. The way I figure it, I will have to make due on 401k alone (since I doubt there will be much left in the SS fund by the time I retire). Actually owning my home outright will make that much easier to do.
Tuesday, August 7, 2007
August Good Buys
See ground rules for posting. Please label you comment, whether you are interested in "Feedback" or if it is a "Good Buy."
Average Buyer Good Buys
Inspired by recent comments, I created a forum for vetting properties we are interested in, and/or sharing information on houses that are "good buys". All properties should be located in family-friendly areas in and around Sacramento.
For now, I will create a section and we can post the listings in the comments on a monthly basis (similar to Sacramento Landing's water cooler). If there is enough interest, I will look into a more interactive format (to allow for updates like sold price).
Here are the ground rules:
1) These should be houses you would consider purchasing yourself (assuming you had the $$)
2) No marketing for friends or relatives...this is not CraigsList.
3) No trolling for houses others have set their hearts on. Conversely, if you are vetting a potential house, please be aware that this is a public forum, so don't share too many details if this is your dream home.
4) No houses over $850K. They are not houses for average buyers (I would have said 500K but I know quite a few folks on the blogs have much higher price ranges than we do).
5) Be respectful of others choices. If you don't like a neighborhood or subdivision, offer viable alternatives and information, not criticism.
6) Try to give enough information that folks have a general idea. Location, price, as well as categories, like tract home, custom home, Streng, large lot, river access etc. would be helpful.
7) No links to specific MLS houses...their terms of use do not allow them and they will be deleted.
For now, I will create a section and we can post the listings in the comments on a monthly basis (similar to Sacramento Landing's water cooler). If there is enough interest, I will look into a more interactive format (to allow for updates like sold price).
Here are the ground rules:
1) These should be houses you would consider purchasing yourself (assuming you had the $$)
2) No marketing for friends or relatives...this is not CraigsList.
3) No trolling for houses others have set their hearts on. Conversely, if you are vetting a potential house, please be aware that this is a public forum, so don't share too many details if this is your dream home.
4) No houses over $850K. They are not houses for average buyers (I would have said 500K but I know quite a few folks on the blogs have much higher price ranges than we do).
5) Be respectful of others choices. If you don't like a neighborhood or subdivision, offer viable alternatives and information, not criticism.
6) Try to give enough information that folks have a general idea. Location, price, as well as categories, like tract home, custom home, Streng, large lot, river access etc. would be helpful.
7) No links to specific MLS houses...their terms of use do not allow them and they will be deleted.
Monday, August 6, 2007
July Melissa Data for Folsom and El Dorado Hills
Looks like El Dorado Hills had a big boost in sales this month. Perhaps due to the opening of Centex and Lennar offices at the new Blackstone Development?
I try not to read into the average price data too much since both these zips can have some really high end sales that skews the averages. However the slow down is sales is hard to miss, but it doesn't really seem to be affecting the prices that dramatically (this is confirmed by my weekly screen scrape).
I try not to read into the average price data too much since both these zips can have some really high end sales that skews the averages. However the slow down is sales is hard to miss, but it doesn't really seem to be affecting the prices that dramatically (this is confirmed by my weekly screen scrape).
Saturday, August 4, 2007
Contemplating a Fixer
Hubby and I used to joke around when referring to our previous house, we called it our practice house. It was our first house....well okay it was a townhouse that had neighbors attached on either side. It was built in 1979 and didn't have a single square wall, but it was right near the last metro stop in the D.C. suburbs of Virginia.
We called it the practice house because we (well, really 80% hubby and 20% me) practiced all our home improvement techniques on it. In the end, it sold within days of listing since the location was great and the home was completely updated compared to others.
Today we saw an opportunity to put that practice to good use. The home is almost everything we want, enormous lot, single story, easy freeway access, nestled in the hills, seasonal creek in the back etc etc. The caveat, its a heavy fixer, much more so than our last house. And while I know we have the ability to do it, I am not sure we have the desire.
As far as ability goes, hubby worked construction growing. His dad is a top quality tile mason (who needs work in case anyone needs a referral), and his brother is very handy as well. As far as desire goes, my children are young. They are at that stage where all they want to do is spend time with me, sitting in my lap, playing with toys on the living room floor. Do I really want to squander this special time to work on a house? After all, I already work 40 hours a week.....our time together is precious.
Sigh....sometimes this housing obsession makes me loose perspective. But oh that house would be fantastic once we finished with it.
We called it the practice house because we (well, really 80% hubby and 20% me) practiced all our home improvement techniques on it. In the end, it sold within days of listing since the location was great and the home was completely updated compared to others.
Today we saw an opportunity to put that practice to good use. The home is almost everything we want, enormous lot, single story, easy freeway access, nestled in the hills, seasonal creek in the back etc etc. The caveat, its a heavy fixer, much more so than our last house. And while I know we have the ability to do it, I am not sure we have the desire.
As far as ability goes, hubby worked construction growing. His dad is a top quality tile mason (who needs work in case anyone needs a referral), and his brother is very handy as well. As far as desire goes, my children are young. They are at that stage where all they want to do is spend time with me, sitting in my lap, playing with toys on the living room floor. Do I really want to squander this special time to work on a house? After all, I already work 40 hours a week.....our time together is precious.
Sigh....sometimes this housing obsession makes me loose perspective. But oh that house would be fantastic once we finished with it.
Friday, August 3, 2007
You Call This an Auction?
Hubby and I were all prepared to go to the Auction in late July. We registered on Hudson & Marshall's site, but after reading the fine print, and wading through their less-than-user-friendly website we bailed at the last minute. We are now on their mailing list, and received this yesterday in the mail:
“The Sellers have decided to allow prospective buyers the opportunity to submit offers at or above the original high bid amount….The Sellers will review the offers they receive on a first come first serve basis and notify the prospective buyer if they are willing to consider the buyers offer. The Seller reserves the right to, in its sole and absolute discretion, reject any and all offers as well as remove the property from sale at anytime.” On the other side is a list of 36 properties and their high bids. The highest bid is $470k with most high bids under $200k.
I want to know how this is any different than accepting offers through an agent. Seems to be the same, just the "agent" is attempting to organize all the potential buyers in one spot and gather the offers all at once...so the process might go a bit quicker.
Of course in addition to the bid a buyer must pay 5% buyer premium, 5% of highest bid earnest money, agree to a 30-day closing, and property taken “as-is”, cash contract, no contingencies.....Yikes, this is certainly not a gig for your Average Buyer. I think the only way this process might pay off, is if you are already tracking a house and it goes for auction and you stick to your reserve price or below.
They are closing the process today, August 3rd….but at least this time they have pictures which does reduce the search costs of determining the condition of each house.
“The Sellers have decided to allow prospective buyers the opportunity to submit offers at or above the original high bid amount….The Sellers will review the offers they receive on a first come first serve basis and notify the prospective buyer if they are willing to consider the buyers offer. The Seller reserves the right to, in its sole and absolute discretion, reject any and all offers as well as remove the property from sale at anytime.” On the other side is a list of 36 properties and their high bids. The highest bid is $470k with most high bids under $200k.
I want to know how this is any different than accepting offers through an agent. Seems to be the same, just the "agent" is attempting to organize all the potential buyers in one spot and gather the offers all at once...so the process might go a bit quicker.
Of course in addition to the bid a buyer must pay 5% buyer premium, 5% of highest bid earnest money, agree to a 30-day closing, and property taken “as-is”, cash contract, no contingencies.....Yikes, this is certainly not a gig for your Average Buyer. I think the only way this process might pay off, is if you are already tracking a house and it goes for auction and you stick to your reserve price or below.
They are closing the process today, August 3rd….but at least this time they have pictures which does reduce the search costs of determining the condition of each house.
Thursday, August 2, 2007
$150 a Month isn't Bad?
Many months ago we decide to look for another rental when our lease was up. We had lined up our neighbor's place across the street who was planning to move in early summer. Well its now late fall, and he is finally getting around to moving (but the timing is bad for hubby and I work wise). In the mean time. the house next door to us also came up for rent.
So we figured it would be worth a try to renegotiate with the owner of our current rental, using the options above as a little leverage. Surprisingly, he agreed to lower the rent $150 a month! Its not the $350 a month we would have saved moving across the street, but I am also being optimistic, and hope we won't be in the current rental more than a year. If we had planned to rent for 1.5 years or more, I'm pretty sure we would have moved.
We are only signing a 6 month lease, since it will give us more flexibility. He would have dropped the price another $50 a month if we had been willing to stay longer term. But I didn't think the penalties for breaking the lease were worth the $50 savings in case we found our dream house.
Sigh...glad this ordeal is over. This whole thing took a lot longer to play out than we had expected.
So we figured it would be worth a try to renegotiate with the owner of our current rental, using the options above as a little leverage. Surprisingly, he agreed to lower the rent $150 a month! Its not the $350 a month we would have saved moving across the street, but I am also being optimistic, and hope we won't be in the current rental more than a year. If we had planned to rent for 1.5 years or more, I'm pretty sure we would have moved.
We are only signing a 6 month lease, since it will give us more flexibility. He would have dropped the price another $50 a month if we had been willing to stay longer term. But I didn't think the penalties for breaking the lease were worth the $50 savings in case we found our dream house.
Sigh...glad this ordeal is over. This whole thing took a lot longer to play out than we had expected.
Weekly Screen Scrape - The Wrong Direction
For the last three screen scrapes I have seen many substantial price reductions (between $5k and $20k). However the average price of homes for sale has continued to rise (now at $220)! We are almost back at early spring levels by my calculations.
No surprise, the average price per square foot of homes under contract is much lower, at $207.
It looks like the new listings who start out way above average price per sq ft are driving the trend. The ones actually trying to sell their house eventually start dropping prices. Again this week there were a lot of new listings, and many expirations.
No surprise, the average price per square foot of homes under contract is much lower, at $207.
It looks like the new listings who start out way above average price per sq ft are driving the trend. The ones actually trying to sell their house eventually start dropping prices. Again this week there were a lot of new listings, and many expirations.
Wednesday, August 1, 2007
Pet Peeves
In today's market, why do Realtors enter a house into the MLS without the pictures? Its not like houses are selling like hotcakes. So why don't they wait until they can complete the listing?
With all the notification services out there, this practice actually hurts a listing. Best I understand, these services sweep the MLS database for a buyer's criteria on a regular basis then send notifications that there is something new. This is a listings big chance to shine and make a first impression. When listings don't have pictures to accompany them.....they have basically forfeited their prime "face time."
Its also annoying for a buyer getting all these new listings in your e-mail without photos.....which are the real sellers (aside from price of course). I think ZIPRealty has a notification service....but I haven't signed up for it.
With all the notification services out there, this practice actually hurts a listing. Best I understand, these services sweep the MLS database for a buyer's criteria on a regular basis then send notifications that there is something new. This is a listings big chance to shine and make a first impression. When listings don't have pictures to accompany them.....they have basically forfeited their prime "face time."
Its also annoying for a buyer getting all these new listings in your e-mail without photos.....which are the real sellers (aside from price of course). I think ZIPRealty has a notification service....but I haven't signed up for it.
More This n That
Short on time today.....so just a couple interesting resources and facts courtesy of my favorite paper (WSJ).
-- Affordable Suburbs Still Outdraw Hip Cities: An economic study recently showed that "educated professionals who are drawn to urban areas..... in their 20s still seek more affordable markets typified by the suburbs..... by the time they reach their 30s and have children." Another study apparently cites that suburbia provides strong community life as opposed to the city. (They could have saved a lot of money by asking what an average home buyer thought...I would have told them exactly the same thing. We lived in D.C. till we were in our late 20s, then moved to the Northern Virginia suburbs, where we had kids....and obviously relocated to the to Sacramento suburbs shortly after looking for more community and a slower pace.)
-- Assessing Environmental Hazards: Since asbestos is such a hot button topic around here I figured I would post these resources, courtesy of the Journal, for uncovering toxic conditions that may affect a potential home. I haven't vetted them...so feedback is always appreciated if anyone has used them.
www.epa.gov/enviro
http://www.scorecard.org/
http://www.edrnet.com/
Additional Note: So it looks like my newspaper is being sold to News Corp. Not sure how I feel about this. I know they plan to beef up advertising. One of the reasons I trust the WSJ when it comes to housing related news, is the revenue from the housing industry (agents, mortgage bankers, developers, and other housing related services), comprises just a small fraction of their advertising, as opposed to papers like the SacBee (see yesterdays post on Sacramento Landing), VillageLife, and the Folsom El Dorado Hills Telegraph. With the WSJ, I don't have to worry (as much) about their potential bias or influence on housing issues. Of course, the WSJ has its failings, their editorial section is soo monotonous....lower taxes, lower taxes....yadda yadda yadda. But that section is easy to ignore.
-- Affordable Suburbs Still Outdraw Hip Cities: An economic study recently showed that "educated professionals who are drawn to urban areas..... in their 20s still seek more affordable markets typified by the suburbs..... by the time they reach their 30s and have children." Another study apparently cites that suburbia provides strong community life as opposed to the city. (They could have saved a lot of money by asking what an average home buyer thought...I would have told them exactly the same thing. We lived in D.C. till we were in our late 20s, then moved to the Northern Virginia suburbs, where we had kids....and obviously relocated to the to Sacramento suburbs shortly after looking for more community and a slower pace.)
-- Assessing Environmental Hazards: Since asbestos is such a hot button topic around here I figured I would post these resources, courtesy of the Journal, for uncovering toxic conditions that may affect a potential home. I haven't vetted them...so feedback is always appreciated if anyone has used them.
www.epa.gov/enviro
http://www.scorecard.org/
http://www.edrnet.com/
Additional Note: So it looks like my newspaper is being sold to News Corp. Not sure how I feel about this. I know they plan to beef up advertising. One of the reasons I trust the WSJ when it comes to housing related news, is the revenue from the housing industry (agents, mortgage bankers, developers, and other housing related services), comprises just a small fraction of their advertising, as opposed to papers like the SacBee (see yesterdays post on Sacramento Landing), VillageLife, and the Folsom El Dorado Hills Telegraph. With the WSJ, I don't have to worry (as much) about their potential bias or influence on housing issues. Of course, the WSJ has its failings, their editorial section is soo monotonous....lower taxes, lower taxes....yadda yadda yadda. But that section is easy to ignore.
Tuesday, July 31, 2007
Market Comparison
We have started to branch out beyond Folsom and EDH in our home search. So of course, the first thing I wanted to do, was look at the stats for Shingle Springs, Fair Oaks, Granite Bay, and Orangevale (I wanted to do Gold River too, but I think the zip includes most of Rancho). I pulled the historical data from SacBee's DataQuick monthly charts. This data is frequently revised, but for trend purposes the original numbers work.
Below are graphs of the main areas we are considering. One graph displays median sales price and the other, median price per square foot. Note the big clump on the square foot chart, but the spacing on the sales price chart. To me, that signals the average size house is much bigger in the more expensive zips. I can't really think of another explanation (so if someone has one...do tell). Not all periods were pulled for the chart, and some months are missing data from their website.
Below are graphs of the main areas we are considering. One graph displays median sales price and the other, median price per square foot. Note the big clump on the square foot chart, but the spacing on the sales price chart. To me, that signals the average size house is much bigger in the more expensive zips. I can't really think of another explanation (so if someone has one...do tell). Not all periods were pulled for the chart, and some months are missing data from their website.
Side note: I went to subscribe to the SacBee, since I was feeling a little guilty using their data so much. But their prices are pretty high. Best I can tell, on an annual basis they charge more than the world renowned WSJ. And for what...news on the latest murder and mayhem. The WSJ reports what I consider to be real news. Freeway accidents, fires, and crime are what I consider current events. Important, but not healthy to read about on a regular basis if you want to keep your faith in the goodness of humanity.
Monday, July 30, 2007
Blackstone - Environmentally Friendly McMansions
Hubby and I have anxiously been awaiting the opening of Blackstone, a master planned community in El Dorado Hills (off Latrobe). They were scheduled to open early Spring, but Centex and Lennar didn't open till recently. Lennar is apparently running the show at this development. They have three communities, and Centex has one. The other developers haven't opened yet.
Our assessment as follows:
Pros:
Location: Great location. Convenient to the freeway and all that El Dorado Hills has to offer.
Community Center: There will be a large complex with swimming pools, gym facilities, and other ammenities that is the focal point for the community. Not slated to open till December 2007, but at the rate they are going, it will probably be spring of 2008.
Solar: All houses will have solar roof panels. Lennar claims their solar is better than Centex's. Also good, is this isn't their first experience with a solar community, they have one in Roseville.
Cons:
Fees & Taxes: We have been getting mixed stories on all the fees and taxes. The HOA fees do not cover yard maintenance but do cover the clubhouse. I think those run around $136 a month (per Centex). Lennar said they have a different HOA depending if the community is gated or not. The district taxes seemed really high, and slightly confusing (Centex said $147 a month, but Lennar made is sound like it would be twice that much). I need to get clarification on all the taxes still. The sales guys are still learning all the ins and outs of their community (so they are fuzzy on the CCRs and other details).
Very Limited Customization: While the base models all come very nicely "appointed," you cannot "have it your way." There is a very limited amount of choices, aside from the actual house model, that are offered. This is contrary to my understanding of the "new house purchase." I thought one of the most appealing parts of buying a new house was the fact that you get to pick everything out. In the case of Blackstone, especially Lennar, it has already been decided. All three Lennar developments will have the exact same cupboards, floors, etc. Hello.....we not drones....or are we? Neither developer has models that are finished. I find some of this hard to swallow, so I may go back and get clarification once the sales people have been on the job a little longer.
Price: While the prices are reasonable compared to resales right now, when you include the HOA and taxes it is still above what I consider a good value. We visited the Centex development in Roseville this weekend (we had never been to Roseville before) to look at the models since they are the same. The Roseville Avonlea development is less expensive, by 10-20k per model and doesn't have HOA. Unfortunately the two Lennar developments that were even close to our price range are both gated. The third high end development is not gated...go figure.
Personal Perspective: If I am going to buy a new tract house, this is probably where I would do it. I like the idea of a community center where I can take the kids swimming, and where they can hang out when they are teenagers. Our daycare center is also very close by. However hubbby is really turned off by the fees. In the current market, I'm sure it will take a long time to sell all they have to offer (especially at current prices), so I have plenty of time to decide.
For previous post see here.
Our assessment as follows:
Pros:
Location: Great location. Convenient to the freeway and all that El Dorado Hills has to offer.
Community Center: There will be a large complex with swimming pools, gym facilities, and other ammenities that is the focal point for the community. Not slated to open till December 2007, but at the rate they are going, it will probably be spring of 2008.
Solar: All houses will have solar roof panels. Lennar claims their solar is better than Centex's. Also good, is this isn't their first experience with a solar community, they have one in Roseville.
Cons:
Fees & Taxes: We have been getting mixed stories on all the fees and taxes. The HOA fees do not cover yard maintenance but do cover the clubhouse. I think those run around $136 a month (per Centex). Lennar said they have a different HOA depending if the community is gated or not. The district taxes seemed really high, and slightly confusing (Centex said $147 a month, but Lennar made is sound like it would be twice that much). I need to get clarification on all the taxes still. The sales guys are still learning all the ins and outs of their community (so they are fuzzy on the CCRs and other details).
Very Limited Customization: While the base models all come very nicely "appointed," you cannot "have it your way." There is a very limited amount of choices, aside from the actual house model, that are offered. This is contrary to my understanding of the "new house purchase." I thought one of the most appealing parts of buying a new house was the fact that you get to pick everything out. In the case of Blackstone, especially Lennar, it has already been decided. All three Lennar developments will have the exact same cupboards, floors, etc. Hello.....we not drones....or are we? Neither developer has models that are finished. I find some of this hard to swallow, so I may go back and get clarification once the sales people have been on the job a little longer.
Price: While the prices are reasonable compared to resales right now, when you include the HOA and taxes it is still above what I consider a good value. We visited the Centex development in Roseville this weekend (we had never been to Roseville before) to look at the models since they are the same. The Roseville Avonlea development is less expensive, by 10-20k per model and doesn't have HOA. Unfortunately the two Lennar developments that were even close to our price range are both gated. The third high end development is not gated...go figure.
Personal Perspective: If I am going to buy a new tract house, this is probably where I would do it. I like the idea of a community center where I can take the kids swimming, and where they can hang out when they are teenagers. Our daycare center is also very close by. However hubbby is really turned off by the fees. In the current market, I'm sure it will take a long time to sell all they have to offer (especially at current prices), so I have plenty of time to decide.
For previous post see here.
Saturday, July 28, 2007
Yard Sales & Gated Developments
Some of yesterdays comments reminded me of bargain hunting.......which then reminded me of another reason I don't like gated developments.
Side note: I am really struggling to figure out why people like gated developments, because they are very popular. When we visited Lennar last week over at Blackstone the sales guy looked at me like I was crazy not to like them. BTW - I am now refusing to call them gated communities, for the reason why....see this post.
Back to bargain hunting. It is that time of year when all the yard/garage sales start occurring. Round here in Serrano, I never see them. I am sure they are against the rules, and even if they weren't, the gated thing really makes it logistically difficult.
We used to hit yard sales all the time back East looking for stuff for our two young kids. They were a great way to get toys and baby gear on the cheap. Some really good bargains could be found, especially in the the nicer neighborhoods (almost none of which were gated). It was also a great way to meet neighbors.
Side note: I am really struggling to figure out why people like gated developments, because they are very popular. When we visited Lennar last week over at Blackstone the sales guy looked at me like I was crazy not to like them. BTW - I am now refusing to call them gated communities, for the reason why....see this post.
Back to bargain hunting. It is that time of year when all the yard/garage sales start occurring. Round here in Serrano, I never see them. I am sure they are against the rules, and even if they weren't, the gated thing really makes it logistically difficult.
We used to hit yard sales all the time back East looking for stuff for our two young kids. They were a great way to get toys and baby gear on the cheap. Some really good bargains could be found, especially in the the nicer neighborhoods (almost none of which were gated). It was also a great way to meet neighbors.
Friday, July 27, 2007
Intuition
I graduated Georgetown Business School at the height of the dot com boom (2000). Many of my fellow MBAs had job offers at start ups.
While the money was tempting, my intuition told me something was badly out of sync. If everything I was learning in school actually applied to the real world, then these 1 year old companies with negative cash flows should not have a larger market capitalization than established firms with a 20 year track record of solid earnings and growth.
This intuition played out right around graduation, and it left several of my colleagues stranded without a job after school.
Why the long story you ask....well it is that same intuition that led us to sell our house in 2006 and wait out the real estate cycle.
Again my intuition has been questioning the current run-up in the stock market. I didn't see how the housing slowdown could not affect the economy as a whole. They way I see it, all the equity and $$ people have been making in RE over the last 6 years was fueling consumer spending. Hence earnings at Home Depot and Lowes were the first to take a hit. Now auto makers are blaming the housing market. I think we will see more unravelling to come.
Yesterday's market correction, was small. But sorely needed IMHO.
While the money was tempting, my intuition told me something was badly out of sync. If everything I was learning in school actually applied to the real world, then these 1 year old companies with negative cash flows should not have a larger market capitalization than established firms with a 20 year track record of solid earnings and growth.
This intuition played out right around graduation, and it left several of my colleagues stranded without a job after school.
Why the long story you ask....well it is that same intuition that led us to sell our house in 2006 and wait out the real estate cycle.
Again my intuition has been questioning the current run-up in the stock market. I didn't see how the housing slowdown could not affect the economy as a whole. They way I see it, all the equity and $$ people have been making in RE over the last 6 years was fueling consumer spending. Hence earnings at Home Depot and Lowes were the first to take a hit. Now auto makers are blaming the housing market. I think we will see more unravelling to come.
Yesterday's market correction, was small. But sorely needed IMHO.
The Weekly Screen Scrape - Expirations
The overall stats for my weekly screen scrape didn't change much. However the total mask a lot of activity.
There were 7 listings that went off the market. One I know for sure was a short sale, so that is probably being transferred to the bank. Another was owned by a Realtor (we had seen it when we were still planning to buy immediately), it was by far the most expensive listing at $266 a square foot, and she never dropped her price. Only thing mildly special was the corner lot it sat on. She must have though her outstanding marketing and staging abilities would make her house stand out. Ironically a house across the street, not on a corner lot, was listed for 15k less than hers, and it sold within a month (not sure what they got for it...both houses are on Boxcar in Folsom).
For a while there were several house we had our eye on, but over the last couple weeks the number of vaguely interesting houses has dropped to zero! I think that has been part of my discouragement.
There were 7 listings that went off the market. One I know for sure was a short sale, so that is probably being transferred to the bank. Another was owned by a Realtor (we had seen it when we were still planning to buy immediately), it was by far the most expensive listing at $266 a square foot, and she never dropped her price. Only thing mildly special was the corner lot it sat on. She must have though her outstanding marketing and staging abilities would make her house stand out. Ironically a house across the street, not on a corner lot, was listed for 15k less than hers, and it sold within a month (not sure what they got for it...both houses are on Boxcar in Folsom).
For a while there were several house we had our eye on, but over the last couple weeks the number of vaguely interesting houses has dropped to zero! I think that has been part of my discouragement.
Thursday, July 26, 2007
Looks can be Deceiving
I was starting to get bummed out recently because several of the houses I had my eye on went "Inactive" in Ziprealty (they send you a message, its a pretty cool service). It made me wonder if Folsom was already starting to rebound, thus killing my dream of being able to afford a place in 95630. However, after seeing Agent Bubble's stats, I was feeling much better.
Today, I also realized that looks can be deceiving. Turns out, as I was browsing rentals (since we are planning on moving next month) one of the houses that went inactive was up for rent! It wasn't sold after all.....ha. In addition, the house next to me, that is $200 cheaper than my house, is still up for rent (which is why I thought I would do another pulse check on rental prices).
Today, I also realized that looks can be deceiving. Turns out, as I was browsing rentals (since we are planning on moving next month) one of the houses that went inactive was up for rent! It wasn't sold after all.....ha. In addition, the house next to me, that is $200 cheaper than my house, is still up for rent (which is why I thought I would do another pulse check on rental prices).
June 2007 Update for Folsom and El Dorado Hills
The Folsom market as a whole seems to be mirroring the smaller sample that I collect each week in my screen scrape. We seem to have hit a plateau. However stats for El Dorado Hills do look a bit more favorable.
In both zips the median home price seems to be actually rising month over month (albeit rather erratically). Looking at the rising median price and the slowly dropping price per square foot, I am guessing that the mix of houses sold is shifting toward bigger houses.
In both zips the median home price seems to be actually rising month over month (albeit rather erratically). Looking at the rising median price and the slowly dropping price per square foot, I am guessing that the mix of houses sold is shifting toward bigger houses.
Wednesday, July 25, 2007
Who can Afford to Live in the "Best Places To Live"?
This week's Village Life reported that El Dorado Hills is number 77 in Money Magazine's "best places to live" and Granite Bay was 74.
They reported that the EDH median family income was around 116K. The median home price was reported to be 672K.
Late last night I had already done some math using a rough average between Folsom and EDH median home price as reported by DataQuick for June 2007. I looked at what the monthly payment on a 550K loan would be, then extrapolated to figure out what the family income would have to be for the monthly payment to be 3x income. I have a range since I wasn't exactly sure how to treat the tax situation.
Results: For a 550K loan (property tax at 1.25% and no HOA) a family would have to make between 145K and 175K!
So just where are these median folks getting the money for their median houses? Its not their income. Must be all those pesky new-fangled loan products!
They reported that the EDH median family income was around 116K. The median home price was reported to be 672K.
Late last night I had already done some math using a rough average between Folsom and EDH median home price as reported by DataQuick for June 2007. I looked at what the monthly payment on a 550K loan would be, then extrapolated to figure out what the family income would have to be for the monthly payment to be 3x income. I have a range since I wasn't exactly sure how to treat the tax situation.
Results: For a 550K loan (property tax at 1.25% and no HOA) a family would have to make between 145K and 175K!
So just where are these median folks getting the money for their median houses? Its not their income. Must be all those pesky new-fangled loan products!
Its Worse in the West
Reading the fine print of today's existing home sales report by the National Association of Realtors.......
"Existing-home sales in the West dropped 6.8 percent in June to an annual pace of 1.10 million, and are 19.1 percent below a year ago. The median price in the West was $340,000, down 0.4 percent from June 2006."
Nationally sales of single family homes only fell 3.5% and the median home price actually rose 0.1%.
"Existing-home sales in the West dropped 6.8 percent in June to an annual pace of 1.10 million, and are 19.1 percent below a year ago. The median price in the West was $340,000, down 0.4 percent from June 2006."
Nationally sales of single family homes only fell 3.5% and the median home price actually rose 0.1%.
Tuesday, July 24, 2007
Save the Date - Housewarming in 2008?
I started this blog on a lark, to keep myself sane as we wait for the housing market to enter a more rational phase. I have enjoyed getting to know everyone through their comments. So I would like to extend an early invitation to an Average Buyer Housewarming party.
I really hope it will be sometime in 2008. Will fill you in on the details as soon as I know them.
If there is no reason to party in 2008 (no house to call my own), we might just have to meet at a bar downtown and get smashed.
I really hope it will be sometime in 2008. Will fill you in on the details as soon as I know them.
If there is no reason to party in 2008 (no house to call my own), we might just have to meet at a bar downtown and get smashed.
The Other AB: An Interview with AgentBubble Part 2
When did you first start advising your buyers to hold off on purchases due to a real estate bubble?
It was around the last quarter of 2005. We sold our house in May of 2006 and almost waited too long. I sensed the madness couldn't keep up much longer and began cautioning buyers against buying. One memorable transaction involved a family that had to buy in a newer neighborhood regardless of my advice. They are now in pre-foreclosure and looking a short sale with a difference of about $140,000 that will be written off. About a year and a half ago a former client came to me seeking advice on buying a condo. I told her to wait and gave her some figures supporting my advice. She ended up buying through another agent (100% financing, interest only). The same condo is now $60,000 less. I have one client that calls me every month to check on the market. He also thanks me each time he calls because I was the only person that would tell him to wait on buying.
What is your outlook for the Sacramento Metro area residential real estate market?
I see declines for the rest of this year and probably all of next year. I'd like to say that things will stabilize by the end of 2008, but with the last quarter typically being slow every year, I honestly don't see things at a full stabilization until April of 2009. There's just too much inventory right now and too many upside down sellers for me to think otherwise. I've seen prices in some areas going back to early 2004, so in my opinion we will get back to early 2003 pricing before it all shakes out. Of course, this doesn't mean you'll pick up a home in East Sac for $400,000. Then again, East Sac is only about 2-3% of the market anyway, and I don't make a salary that justifies looking there, so it's a non-issue for me.
What signs should an average buyer look for to know its time to buy (market bottom)?
Make sure it's not a false bottom when you buy. In other words, just because averages and median start up for one month, that doesn't mean the market has turned the corner. A dead cat dropped from a 50 story building will bounce more than once! Personally, I plan on buying again when there's at least a two month increase in the standard statistics that are used to measure the market.
Do you think the sales and inventory statistics accurately capture what is occurring in the market?
I'd say they are pretty close. They're obviously going to be low because of the FSBOs and homes sold at the courthouse steps, but I just don't think the difference is that significant. However, one thing I do wonder about is the volume of foreclosures out there. Our MLS stats for short sales and foreclosures have gone from 1,016 total for the 4 county area in November 06 to 4,031 in July 07. That's a huge jump in such a short period of time. Nearly 1 in every 4 homes listed for sale is either a short sale or bank-owned home.
Is the current real estate business model broken, or do you think 6% commissions will continue to survive?
It's definitely in need of a change. Here's why: Before the explosion in home prices, I could expect to make about $4K or $5K per transaction on average. Then, homes went up in value, and the $100,000 home is now selling for $300,000 in about 3-4 years. Real estate agents didn't provide better service, but they still got that increase in commission since everything is based on sales price. So instead of making $3000 on a house, the agent is now making $9000. Same MLS, same level of service, same advertising (often less because homes sold in days instead of months), same everything. But MORE commission. Doesn't make sense. There's absolutely no reason for someone to pay 6% to sell their home. I've always listed a home for 1% on the listing side and 2.5% for the buying side. If I represent the buyer, it's still only 1%. If there's no listing involved, then I split my commission with a buyer when a home if found. Seems simple enough, but people feel like they have to pay more to get better service. I often tell clients the only difference between my company and the company down the street is the color of our signs.
It was around the last quarter of 2005. We sold our house in May of 2006 and almost waited too long. I sensed the madness couldn't keep up much longer and began cautioning buyers against buying. One memorable transaction involved a family that had to buy in a newer neighborhood regardless of my advice. They are now in pre-foreclosure and looking a short sale with a difference of about $140,000 that will be written off. About a year and a half ago a former client came to me seeking advice on buying a condo. I told her to wait and gave her some figures supporting my advice. She ended up buying through another agent (100% financing, interest only). The same condo is now $60,000 less. I have one client that calls me every month to check on the market. He also thanks me each time he calls because I was the only person that would tell him to wait on buying.
What is your outlook for the Sacramento Metro area residential real estate market?
I see declines for the rest of this year and probably all of next year. I'd like to say that things will stabilize by the end of 2008, but with the last quarter typically being slow every year, I honestly don't see things at a full stabilization until April of 2009. There's just too much inventory right now and too many upside down sellers for me to think otherwise. I've seen prices in some areas going back to early 2004, so in my opinion we will get back to early 2003 pricing before it all shakes out. Of course, this doesn't mean you'll pick up a home in East Sac for $400,000. Then again, East Sac is only about 2-3% of the market anyway, and I don't make a salary that justifies looking there, so it's a non-issue for me.
What signs should an average buyer look for to know its time to buy (market bottom)?
Make sure it's not a false bottom when you buy. In other words, just because averages and median start up for one month, that doesn't mean the market has turned the corner. A dead cat dropped from a 50 story building will bounce more than once! Personally, I plan on buying again when there's at least a two month increase in the standard statistics that are used to measure the market.
Do you think the sales and inventory statistics accurately capture what is occurring in the market?
I'd say they are pretty close. They're obviously going to be low because of the FSBOs and homes sold at the courthouse steps, but I just don't think the difference is that significant. However, one thing I do wonder about is the volume of foreclosures out there. Our MLS stats for short sales and foreclosures have gone from 1,016 total for the 4 county area in November 06 to 4,031 in July 07. That's a huge jump in such a short period of time. Nearly 1 in every 4 homes listed for sale is either a short sale or bank-owned home.
Is the current real estate business model broken, or do you think 6% commissions will continue to survive?
It's definitely in need of a change. Here's why: Before the explosion in home prices, I could expect to make about $4K or $5K per transaction on average. Then, homes went up in value, and the $100,000 home is now selling for $300,000 in about 3-4 years. Real estate agents didn't provide better service, but they still got that increase in commission since everything is based on sales price. So instead of making $3000 on a house, the agent is now making $9000. Same MLS, same level of service, same advertising (often less because homes sold in days instead of months), same everything. But MORE commission. Doesn't make sense. There's absolutely no reason for someone to pay 6% to sell their home. I've always listed a home for 1% on the listing side and 2.5% for the buying side. If I represent the buyer, it's still only 1%. If there's no listing involved, then I split my commission with a buyer when a home if found. Seems simple enough, but people feel like they have to pay more to get better service. I often tell clients the only difference between my company and the company down the street is the color of our signs.
Monday, July 23, 2007
The Other AB: An Interview with AgentBubble Part 1
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.
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.
Sunday, July 22, 2007
Action at the Auction
Looks like we will be checking out the Sacramento home auction this afternoon. Will give a report when we get back.
Update: After reading the fine print while the kids were napping we decided it was going to be a waste of time. With all the additional fees we were put off, then we read about the fact that the seller doesn't have to accept the winning bid. How lame is that. Essentially its just a marketing gimmick.
We decided to go check out Orangevale instead. Went to several open houses. Nice established area, but still pretty overpriced for what you get. We also stopped by the Lennar office at Blackstone....will give a detailed report later.
Update: After reading the fine print while the kids were napping we decided it was going to be a waste of time. With all the additional fees we were put off, then we read about the fact that the seller doesn't have to accept the winning bid. How lame is that. Essentially its just a marketing gimmick.
We decided to go check out Orangevale instead. Went to several open houses. Nice established area, but still pretty overpriced for what you get. We also stopped by the Lennar office at Blackstone....will give a detailed report later.
Saturday, July 21, 2007
Average-idity
My averageness is starting to wear on me. The very neutral walls and decor of the rental, with no personality to speak of (except my kids artwork which can be taped on). Not to mention, the cookie cutterness of the tract homes where I live.
I am at that point in life where every aspect of my life is average. I really don't enjoy this average-idity, but I can see why us suburban moms end up in this life of convenience. I no longer have time or energy to read interesting books, or explore new places. My only guilty pleasures are this blog, my WSJ, and to some degree my job.
So I lashed out, in the only legal and somewhat funky way I could think of. I decorated my car in the hope, that in some small way, it will set me apart from the crowds of average folks. So if you see me, do drop by and say "hi"
I am at that point in life where every aspect of my life is average. I really don't enjoy this average-idity, but I can see why us suburban moms end up in this life of convenience. I no longer have time or energy to read interesting books, or explore new places. My only guilty pleasures are this blog, my WSJ, and to some degree my job.
So I lashed out, in the only legal and somewhat funky way I could think of. I decorated my car in the hope, that in some small way, it will set me apart from the crowds of average folks. So if you see me, do drop by and say "hi"
Friday, July 20, 2007
June Month's Inventory by Zip
The moment I await each month has arrived. Monthly sales from DataQuick has been posted by the Sac Bee. Below is the breakout by zip of the month's inventory. The data is not as rosy as it appeared previously. Some of these numbers are considerably lower than previous estimates because I removed the condos and multi family units from my inventory numbers this month. This change essentially shaved a month of inventory off the weighted total calculation (from 8.8 to 7.8).
I have ordered the data by month's inventory to give a better picture of where we stand. There are still 19 zips, or around 35% of the zips, that are below the 6 month mark. For those of you just tuning in, 6 months tends to be the rule of thumb equilibrium between buyer and seller, more inventory favors buyers, while less favor's sellers.
I have ordered the data by month's inventory to give a better picture of where we stand. There are still 19 zips, or around 35% of the zips, that are below the 6 month mark. For those of you just tuning in, 6 months tends to be the rule of thumb equilibrium between buyer and seller, more inventory favors buyers, while less favor's sellers.
Wednesday, July 18, 2007
Preliminary Weekly Screen Scrape
Don't have my screen scrape data with me on travel (still in Atlanta), however I pulled my usual Folsom and El Dorado Hills data off www.metrolistmls.com. At first glance, it looks like we have a repeat of last week, not much contract activity, still hovering around 20%, and again the average price per square foot rose of home for sale!
Hmmm funny thing about higher prices.....they don't sell homes. In June prices were coming down, and houses were going under contract the fastest I had seen since I began tracking in February. Now the opposite is occurring, prices are going up, and contract activity has stagnated.
I'm so FRUSTRATED!
I will likely head over to Blackstone this weekend to take a peak at how their sales are doing.
Hmmm funny thing about higher prices.....they don't sell homes. In June prices were coming down, and houses were going under contract the fastest I had seen since I began tracking in February. Now the opposite is occurring, prices are going up, and contract activity has stagnated.
I'm so FRUSTRATED!
I will likely head over to Blackstone this weekend to take a peak at how their sales are doing.
Tuesday, July 17, 2007
Take me back to '02
Many have noted that we are ready and willing to pay 2002 prices, adjusted for inflation and mortgage rates. Our feelings are also consistent with the Global Insight/National City study that marked 2002 as "just right" (not over or under priced).
Since metro averages are so deceptive, I took the DataQuick resale data from August of 2002 courtesy of the Sac Bee website, and compared it with May of 2007. Keep in mind, a lot has happened in those 5 years. The mix of houses in some zip codes has changed dramatically in some of the suburbs (hence the median price and price per sqft may not track the same).
They are ordered by zip code for easy reference. Zips with over 75% appreciation in the median price are in Red, those between 50% and 75% are in orange, and those with less than 30% (which I consider more or less reasonable when you take into account inflation and interest rates) are in green. Unfortunately only one of those...sigh.
Please note: This data is not adjusted for inflation or mortgage rates, its just the percentage difference between the two medians. Inflation and mortgage rates probably account for 25-30%.....the rest is irrational exuberance.
I threw out zips several zips were the data was sparse.
Since metro averages are so deceptive, I took the DataQuick resale data from August of 2002 courtesy of the Sac Bee website, and compared it with May of 2007. Keep in mind, a lot has happened in those 5 years. The mix of houses in some zip codes has changed dramatically in some of the suburbs (hence the median price and price per sqft may not track the same).
They are ordered by zip code for easy reference. Zips with over 75% appreciation in the median price are in Red, those between 50% and 75% are in orange, and those with less than 30% (which I consider more or less reasonable when you take into account inflation and interest rates) are in green. Unfortunately only one of those...sigh.
Please note: This data is not adjusted for inflation or mortgage rates, its just the percentage difference between the two medians. Inflation and mortgage rates probably account for 25-30%.....the rest is irrational exuberance.
I threw out zips several zips were the data was sparse.
Finding Rentals
The sidebar has been updated with links to various property management companies as well as other classified sources for Sacramento area home rentals. Thanks everyone for the additional links!
Folsom Stats
Agent Bubble posted some great Folsom stats on the SacRealStats Blog, see his post...... Sacramento Real Estate Statistics: Taking a Closer Look at...Folsom
The picture is not as discouraging as I had recently thought.
The picture is not as discouraging as I had recently thought.
Bubble Glossary
I had never read a blog prior to my addiction to the Sacramento Real Estate Blogs. However much of the lingo took some time to figure out. Below is a brief glossary. I hope to add to it as I come across more terms.
Real Estate Lingo -
ARM -Adjustable Rate Mortgage
BB - Bubble Blogger
CAGR - Compound Annual Growth Rate
CC&R - Covenants, Conditions and Restrictions
CDO - Collateralized Debt Obligation
FB - F*cked Buyer
FHA - Federal Housing Administration
FIT - Flipper in Trouble
FSBO - For Sale By Owner
GF - Greater Fool
GFE - Good Faith Estimate
GRM - Gross Rent Multiplier
HB - Housing Bubble
HELOC - Home Equity Line of Credit
HOA - Home Owner's Association
LTV - Loan to Value
MBA - Mortgage Bankers Association
MBS - Mortgage Backed Security
MIL - Mortgage Information Letter
MLS - Multiple Listing Service
MIP - Mortgage Insurance Premium
MO - Mortgage Officer
MSA - Metropolitan Statistical Area
NAR - National Association of Realtors
NOD - Notice of Default
NOT - Notice of Transfer
PITI - Principal Interest Taxes Insurance
PS - Pending Sale
RE - Real Estate
REO - Real Estate Owned
REI - Real Estate Industry
SFH - Single Family Home
General Lingo -
BTW - By the Way
DH - Dear Husband
DW - Dear Wife
FWIW - For What Its Worth
FYI - For Your Information
IMHO - In My Humble Opinion
LOL - Lots of Laughs
MSM - Main Stream Media
NPR - National Public Radio
NYT - New York Times
OMG - Oh My God(Goodness)
ROFL - Roll On Floor Laughing
WSJ - Wall Street Journal
Real Estate Lingo -
ARM -Adjustable Rate Mortgage
BB - Bubble Blogger
CAGR - Compound Annual Growth Rate
CC&R - Covenants, Conditions and Restrictions
CDO - Collateralized Debt Obligation
FB - F*cked Buyer
FHA - Federal Housing Administration
FIT - Flipper in Trouble
FSBO - For Sale By Owner
GF - Greater Fool
GFE - Good Faith Estimate
GRM - Gross Rent Multiplier
HB - Housing Bubble
HELOC - Home Equity Line of Credit
HOA - Home Owner's Association
LTV - Loan to Value
MBA - Mortgage Bankers Association
MBS - Mortgage Backed Security
MIL - Mortgage Information Letter
MLS - Multiple Listing Service
MIP - Mortgage Insurance Premium
MO - Mortgage Officer
MSA - Metropolitan Statistical Area
NAR - National Association of Realtors
NOD - Notice of Default
NOT - Notice of Transfer
PITI - Principal Interest Taxes Insurance
PS - Pending Sale
RE - Real Estate
REO - Real Estate Owned
REI - Real Estate Industry
SFH - Single Family Home
General Lingo -
BTW - By the Way
DH - Dear Husband
DW - Dear Wife
FWIW - For What Its Worth
FYI - For Your Information
IMHO - In My Humble Opinion
LOL - Lots of Laughs
MSM - Main Stream Media
NPR - National Public Radio
NYT - New York Times
OMG - Oh My God(Goodness)
ROFL - Roll On Floor Laughing
WSJ - Wall Street Journal
To Take a Test Drive?
Hubby and I have really started to get frustrated with the market here in EDH and Folsom. Prices have been on a plateau for a month or two. As a result, we have begun to seriously consider other areas which have been more responsive to the market conditions.
(Of course as I mentioned in a previous post, this exact situation will eventually lead to softening prices in these more desirable areas as average folks like us decide to look in more affordable neighborhoods.)
So here is our dilemma. We had decided to find a cheaper rental, and the guy across the street was willing to rent out his place for $350 less than we pay now. (He commutes to the South Bay for work leaving his wife, with three young kids in tow, to essentially raise the kids by herself.). Now our neighbor is talking a little more rent, and they have been pushing the date. So we are beginning to think about getting the heck out of Serrano all together, and take a new area for a test drive. The past few months in El Dorado Hills has certainly demonstrated the value of getting to know a neighborhood before committing (similar to dating before marriage....I'm also matchmaker in my spare time =) The only thing holding us back is we really like our daycare and don't want to have to move the kids...sigh.
(Of course as I mentioned in a previous post, this exact situation will eventually lead to softening prices in these more desirable areas as average folks like us decide to look in more affordable neighborhoods.)
So here is our dilemma. We had decided to find a cheaper rental, and the guy across the street was willing to rent out his place for $350 less than we pay now. (He commutes to the South Bay for work leaving his wife, with three young kids in tow, to essentially raise the kids by herself.). Now our neighbor is talking a little more rent, and they have been pushing the date. So we are beginning to think about getting the heck out of Serrano all together, and take a new area for a test drive. The past few months in El Dorado Hills has certainly demonstrated the value of getting to know a neighborhood before committing (similar to dating before marriage....I'm also matchmaker in my spare time =) The only thing holding us back is we really like our daycare and don't want to have to move the kids...sigh.
Friday, July 13, 2007
Taking Advantage
This weekend we plan to take advantage of reason number 5, in why I like Sac. I inadvertently left Yosemite off the list. Its one of the most beautiful places on earth, and is just a couple hours away.
Its the annual family camp trip. This will be our first time with two kids (1 & 3), so we may not get to take in as much of the wonderful scenery. Luckily there will be lots of family to help out.
Its the annual family camp trip. This will be our first time with two kids (1 & 3), so we may not get to take in as much of the wonderful scenery. Luckily there will be lots of family to help out.
Thursday, July 12, 2007
The Weekly Screen Scrape - The Good and the Bad
While the number of house pending sale compared to available has plummeted back to 20% (it dropped 7% as many houses closed escrow and some fell out), the price per square foot of available houses went up several dollars. This was due to two factors 1) some bargains going into escrow, and 2) new listings at wishing prices.
We are seriously starting to look into other areas aside from Folsom and EDH. Its been several weeks since we have seen houses that were of serious interest (custom homes at sub $200 sqft prices).
Prices in Serrano have certainly dropped over the last 6 months. When we first moved into our rental here, there was nothing in my criteria, now there are around 7 (3 pending sale). Although I do still see some comparable anomalies go at much higher prices. The house next door to us, which has been empty since we arrived in Nov of 2006, went up for rent this week.
We are seriously starting to look into other areas aside from Folsom and EDH. Its been several weeks since we have seen houses that were of serious interest (custom homes at sub $200 sqft prices).
Prices in Serrano have certainly dropped over the last 6 months. When we first moved into our rental here, there was nothing in my criteria, now there are around 7 (3 pending sale). Although I do still see some comparable anomalies go at much higher prices. The house next door to us, which has been empty since we arrived in Nov of 2006, went up for rent this week.
Wednesday, July 11, 2007
Condo Conversion
News articles during the boom mentioned that rental apartments became scarce as they were converted to more profitable condos. Now that the boom is busting....will condos be converted back? Since I went to the trouble yesterday to gather inventory twice (once with condos and multifamily included, and again with only single family homes), I figured I would post the result.
However I don't plan to track this regularly.
Below is the same data from yesterday, however the column on the right is the percentage of current inventory that is either condo or multi-family home. For instance, Downtown Sac (95814) is overwhelmingly condo/multi-family.
However I don't plan to track this regularly.
Below is the same data from yesterday, however the column on the right is the percentage of current inventory that is either condo or multi-family home. For instance, Downtown Sac (95814) is overwhelmingly condo/multi-family.
Tuesday, July 10, 2007
A Lot Goes Into an Average
Below is the monthly inventory sweep by zip code. Instead of ordering by the percent change to highlight trends, I have kept the zip codes in order for easy reference. The average 4% growth hides a lot of information.
Important note: When I set all the ZipRealty parameters to defaults for collecting the data, I didn't realize it included condos and multi-family units. The result of this oversight is to over inflate the month's inventory numbers I have reported in the past. I have corrected this to now only track single-family homes.
The percentage change from last month (including the condos and multi-family) and the new SF only inventory is reported below.
Important note: When I set all the ZipRealty parameters to defaults for collecting the data, I didn't realize it included condos and multi-family units. The result of this oversight is to over inflate the month's inventory numbers I have reported in the past. I have corrected this to now only track single-family homes.
The percentage change from last month (including the condos and multi-family) and the new SF only inventory is reported below.
Monday, July 9, 2007
The Anti-Socialization of America
Warning – This is a bit long and gets slightly off topic, but I promise to bring it back round to buying a house at the end.
______________________
For most Americans, the most social years of our lives are our youngest years. Up through college, we have regular interaction with others in our ages group. After college, a funny thing happens. We become slowly become more and more insular and withdrawn. How else do you explain the huge explosion in online dating? It’s hard to meet people outside of work these days.
I know I am not alone in longing for the America of my childhood. The days when we left the front door unlocked, and our parents sent us out to play till dinner time. The days when we were allowed to talk to strangers and eat all our Halloween candy. The days when hitchhikers were just folks who needed a lift, and not potential psychos.
So I have taken note of many factors I believe are contributing to this anti-socialization of our communities:
--Our culture is very mobile. People don’t set down roots as much as they used to. It is rare to find someone like my mom who lived in her house for over 30 years. She knew all the neighbors and they knew her.
--Our culture is 24/7. In Europe (at least when I lived there in the ‘90s), the shops were only open in the morning and the afternoons during the week, almost never on the weekends and evenings. This meant everyone was free to spend time together since they all had evenings and weekends off.
--It is rare to find a city center or common place for communities to gather in American cities these days. In Europe, all the young singles would hang out in the city center on Fridays, and the families would stroll around on Sunday afternoons. This activity keeps everyone in close contact and keeps everyone familiar with who lives in their community. Since many folks walk and take public transportation they also interact more.
--Gated community is an oxymoron – These gates are designed to keep people out and there is not anything communal about these developments. These “communities” keep the front lawn manicured, thus you never meet your neighbors as they work on their yards. With some associations, you can’t even park out front, which means, you don’t even get a chance to say hi to your neighbor as they walk to their car. Everyone now has a pool in their backyard as opposed to using a communal pool. The only opportunity you have to meet is at the mailbox! The one thing I enjoyed about the big snowstorms in the East, was that everyone would be out front together helping shovel snow afterwards.
--Our culture, especially post 9/11, has taught us to fear and judge one another. These days, we are afraid to interact with the outside world, discipline others children, or help out someone in need for fear of being sued or shot or yelled at. We are very quick to judge others, calling them stupid, or lazy or fat. Eying them suspiciously and wondering if they are a terrorist. It’s amazing how people feel they can rip each other apart on the internet or e-mail when they would never feel at ease saying those things in person.
--Many people prefer to watch reality TV and Sports in their homes rather than to experience reality and play sports outside their homes. Our TVs have gotten bigger, while our outside lives have gotten smaller.
I think this phenomenon also explains the large growth in the size of American houses. We no longer trust the outside world, so we retreat to our inside world, our houses. Thus they need to grow to accommodate more of our lives.
So where does all this leave me in respect to my house search? It leaves me looking for neighborhoods that have sidewalks for strolling, a local pool for hanging out, and last but certainly not least, no gates. I would love to find the community of my childhood, but unfortunately, I don’t think I will find it here in Sacramento.
______________________
For most Americans, the most social years of our lives are our youngest years. Up through college, we have regular interaction with others in our ages group. After college, a funny thing happens. We become slowly become more and more insular and withdrawn. How else do you explain the huge explosion in online dating? It’s hard to meet people outside of work these days.
I know I am not alone in longing for the America of my childhood. The days when we left the front door unlocked, and our parents sent us out to play till dinner time. The days when we were allowed to talk to strangers and eat all our Halloween candy. The days when hitchhikers were just folks who needed a lift, and not potential psychos.
So I have taken note of many factors I believe are contributing to this anti-socialization of our communities:
--Our culture is very mobile. People don’t set down roots as much as they used to. It is rare to find someone like my mom who lived in her house for over 30 years. She knew all the neighbors and they knew her.
--Our culture is 24/7. In Europe (at least when I lived there in the ‘90s), the shops were only open in the morning and the afternoons during the week, almost never on the weekends and evenings. This meant everyone was free to spend time together since they all had evenings and weekends off.
--It is rare to find a city center or common place for communities to gather in American cities these days. In Europe, all the young singles would hang out in the city center on Fridays, and the families would stroll around on Sunday afternoons. This activity keeps everyone in close contact and keeps everyone familiar with who lives in their community. Since many folks walk and take public transportation they also interact more.
--Gated community is an oxymoron – These gates are designed to keep people out and there is not anything communal about these developments. These “communities” keep the front lawn manicured, thus you never meet your neighbors as they work on their yards. With some associations, you can’t even park out front, which means, you don’t even get a chance to say hi to your neighbor as they walk to their car. Everyone now has a pool in their backyard as opposed to using a communal pool. The only opportunity you have to meet is at the mailbox! The one thing I enjoyed about the big snowstorms in the East, was that everyone would be out front together helping shovel snow afterwards.
--Our culture, especially post 9/11, has taught us to fear and judge one another. These days, we are afraid to interact with the outside world, discipline others children, or help out someone in need for fear of being sued or shot or yelled at. We are very quick to judge others, calling them stupid, or lazy or fat. Eying them suspiciously and wondering if they are a terrorist. It’s amazing how people feel they can rip each other apart on the internet or e-mail when they would never feel at ease saying those things in person.
--Many people prefer to watch reality TV and Sports in their homes rather than to experience reality and play sports outside their homes. Our TVs have gotten bigger, while our outside lives have gotten smaller.
I think this phenomenon also explains the large growth in the size of American houses. We no longer trust the outside world, so we retreat to our inside world, our houses. Thus they need to grow to accommodate more of our lives.
So where does all this leave me in respect to my house search? It leaves me looking for neighborhoods that have sidewalks for strolling, a local pool for hanging out, and last but certainly not least, no gates. I would love to find the community of my childhood, but unfortunately, I don’t think I will find it here in Sacramento.
Friday, July 6, 2007
A Few Good Rentals
Many of us did the math and sold our homes in 2005 & 2006 opting to wait out the bubble. Unfortunately there is no MLS for finding rentals. So I have compiled a list of property management and classified adds for a rentals in the Sacramento area.
Classifieds
Sacramento Bee
CraigsList
Local Property Management Companies
PPM4U
Homepoint
Capital Management
GBR
This is not a very comprehensive list, so please e-mail or comment if you have additional links. I will post these on the sidebar soon.
Classifieds
Sacramento Bee
CraigsList
Local Property Management Companies
PPM4U
Homepoint
Capital Management
GBR
This is not a very comprehensive list, so please e-mail or comment if you have additional links. I will post these on the sidebar soon.
Thursday, July 5, 2007
Inventory Interaction
Interactive graphics courtesy of my favorite paper.......WSJ. Although the inventory number for Sacramento looks way high. I'm thinking they might have mixed up Sacramento with Orange County.
Weekly Screen Scrape - Nothing of Note
Nothing really going on this week. More and more properties feature the "bank owned" statement in their description.
I need a new obsession. This one is getting kinda boring.....Its like watching a flower bloom, a wonderful thing, but if you show up at the right time, you still get the same reward. Hopefully the coming weeks will bring some more dramatic price drops.
I need a new obsession. This one is getting kinda boring.....Its like watching a flower bloom, a wonderful thing, but if you show up at the right time, you still get the same reward. Hopefully the coming weeks will bring some more dramatic price drops.
Tuesday, July 3, 2007
Its all Fun and Games Till Someone Gets Hurt
I really liked an idea posted a while back Lander’s blog. They suggested giving a free credit walk to that first time homebuyers that got in over their heads during this bubble. My husband and I are both college educated professionals, and with our first home purchase we really put a lot of trust into our agent and mortgage broker. At the time I tried to do internet searches on “average closing costs” and the like, but it rarely turned up good information. They certainly don’t teach this type of stuff in school, so I can see how many average folks ended up in trouble, watching prices skyrocket and fearing they would be priced out of the market. In addition, many of the first time buyers are young or new to the country and have never been through a housing bust, so they don’t have the same perspective of those who have been around a little longer
Now for all the flippers and speculators out there who jumped into the market hoping to make a killing (and the members of the real estate industrial complex that enabled and fueled their behavior)…..they deserve what they get. I am not trying to be mean or spiteful here. . We would never deny them the riches they would have made, so why should we feel sorry for their losses. Let’s call it what it is…they were taking a risk, gambling with money they didn’t have, and they lost this time.
There is no such thing as free money. Although from 2002-2005, I can see how some were fooled into thinking there was.
Now for all the flippers and speculators out there who jumped into the market hoping to make a killing (and the members of the real estate industrial complex that enabled and fueled their behavior)…..they deserve what they get. I am not trying to be mean or spiteful here. . We would never deny them the riches they would have made, so why should we feel sorry for their losses. Let’s call it what it is…they were taking a risk, gambling with money they didn’t have, and they lost this time.
There is no such thing as free money. Although from 2002-2005, I can see how some were fooled into thinking there was.
Monday, July 2, 2007
MelissaData for June 2007 - Folsom & El Dorado Hills
As I have mentioned every time I post this data.....it doesn't seem very stable (they use averages so the data is subject to large swings). But at least this month, the swings are moving in the right direction for those of us who are renting!
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