Sacramento Area Home Buyers - Are you wondering what happened to the market and what you can do to find a home?
Finding Sacramento area home buyers a home can be a real challenge. As many of you know, the market in the great Sacramento area of California has shifted from a buyer's market to a seller's market. The leading indicator of a market shift is the inventory of homes on the market and the number actually selling.
This first chart is for Placer county.
It shows the number of homes for sale has dropped from about 1000 in December of 2011 to around 520 in February of 2013.
While the number being sold has stayed relatively flat between 300 and 500 per month.
Reduced supply with steady demand has caused the median price to increase by over 25% in Placer county.
Sacramento county has a similar trend:
The number of homes for sale has dropped fom over 2900 in December of 2011 to just under 1400 in March of 2013.
The red line is the number of homes that have accepted offers (pending) and the blue line is the number of new homes on the market. Notice they are pretty even so there is no new net growth of homes for sale.
Again, this has resulted in the median home price in Sacramento county to go up over 30% between February of 2012 and February of 2013.
So what's that mean to you if you are trying to buy a home? Well the first thing is you need to be fully prepared to make an offer that seller's like. That means you are pre-approved with a lender who has actually looked at your financial information and tax records. You also need to understand that the days of making an offer below asking price and getting it accepted are gone.
We are seeing good homes, that are in good condition, in a good areas that are priced slightly above comparable sales sell like hot cakes. Home buyers are lining up to view them, we've seen six or seven cars in a matter of 20 minutes at good properties. Selling like hot cakes means they are getting multiple offers, many over asking price.
So what can you do to improve the chances of your offer being accepted?
- Work with a Realtor who has established a good reputation and has a lot of contacts with other Realtors. Real estate is very much a people to people business, including agent to other agents.
- Work with your agent to understand the comparable home sales in the neighborhood you want to buy, including the appreciation over the past 6 to 12 months, so you know and feel comfortable with an offer over asking price.
- Have enough money in the bank to make a 1% to 3% earnest money deposit, it shows the seller you are serious and have some skin in the game. Also have enough to cover all the closing costs. Closing costs can be 5% or more on top of the down payment. Ask your lender if you are not sure how much you need.
- Get a real pre-approval from a good lender who is local. It's hard enough in today's market, working remotely with lenders can create delays that cause deals to go south. If you can, get a full DU approval; that's lender speak for having underwriter approval for your loan. This really helps in buying a home.
- Make your inspection time as short as you are comfortable doing. The standard is 17 days and many sellers do not want to wait that long to have you determine if you really want to buy the house. 10 days can be done if your Realtor knows several good inspection companies, in some cases the time can be even shorter.
- DO NOT ASK for closing cost credits. It just reduces the net to the seller and makes your offer less desirable.
- Be careful of the title and escrow expenses, ask your Realtor what makes your offer strong and take their advice.
And last but not least, have patience. Even with all the best preparation to make a solid offer, you may have several get rejected before you make one that is accepted. And please do not make offers on multiple houses at the same time, that simply dilutes your focus and is not fair to you, your family or the sellers.
We hope this helps with finding your Sacramento area home, and wish you the best of luck.
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