Sacramento Market Commentary - August 2007

Goodbye August!  Hello September!  This heat is making me look forward to Fall.  Thank goodness the nights have been cool.  Frequently the heat at the State Fair is unbearable but we enjoyed it yesterday and actually started shivering in the evening.  I'm sure the Dippin' Dots helped!   Our Real Estate market is still mixed.  Some zip codes and areas are doing much better than others.  If you want specific information about your zip code, I'd be happy to get that for you.   My Historical Housing Data chart below shows the Sacramento trend which, as you know, is made up of many zip codes.  There is still an increase in mortgage defaults and bank-owned properties but the sales figures are still healthy.  People are still selling and buying houses.  I know because I've sold 2 just in the last 6 weeks.  There is some impact being felt in the lending industry; offices closing, consolidations, and portfolio freezes.  This, in turn, is making lending rules a little more restrictive.  If the money had been tighter in the first 4 years of this century, our expectations wouldn't be so out of alignment with reality.  But, in analyzing the numbers, this is a stabilizing market.  It is correcting from the hyper appreciation and sellers/builders are adjusting their expectations.   I have added several new charts that depict the momentum of change.  Investors should use these types of trend figures to understand changes and to project changes in those trends.  Remember, these don't depict raw data but, rather, the momentum behind changes in the raw data.  For Investors "timing" is more important than "location", in real estate.  

My counsel to Congress:  Don't try to band-aid the situation because it's an election year.  The band-aids don't last long and can do more harm than good.  The market will take care of itself.    

My counsel to Buyers:  Time is still on your side.  The inventory levels allow you to really find your dream home.  And with some prices still declining, this is the BEST time to move up to a larger home.  The logic is that the price of the larger home has declined in real dollars more than your current home.  But, the longer you wait, the trend may switch and the logic reverses.  Rates may increase or Congress may introduce something without projecting the consequences.  If you have to sell low in order to buy low, remember it is no different than selling high to buy high.  Let me help you find the right home for you.  

My counsel to Sellers:  There are alternatives to reducing your price.  Rate buydowns or incentives (seller credits, etc.) can help you allure buyers and their agents without a commensurate reduction in your net proceeds.  Buyers have time and choice.  Be very careful about hiring a REALTOR® based on the highest listing price.  This may be a sign of the least competent agent.  I can help you sell your home and find a new one using unique and effective marketing.  But I won't promise you last year's price.  It's the market, not the seller, the agent, or the appraiser that dictates what a buyer will pay.  Remember, the higher you list, the more you chase the downward slope.  

Bottom line:  The market requires different marketing and staging.  Let me provide my services to help you find your dream home and/or get the highest net price for your home.      P.S:  If you know someone who needs a REALTOR®, please forward this email to them or send me their contact information and I'll follow up.  I will provide excellent service.