You Need Me More Than I Need You! Elk Grove Market Update May 2021

By
Real Estate Agent with eXp Realty of California, Inc. (lic. #01878277) DRE# 00949880

     A California builder I know was negotiating with his painter when the painter said, "You need me more than I need you!"  This same builder sent me  an itemized list of over 22 items that they could not get at all, were difficult to get or were subject to hyperinflation.  I recently had to paint a rental and had to visit several Sherwin William's paint stores to get the paint I needed.  The sales clerk told me they did not expect to get back to full production until September AT THE EARLIEST.  In PebbleCreek, a 55+, resort style community, if you purchase a new home today, it will be delivered in 30 months.  It seems like the story is the same wherever you go.  There is not much supply and/or prices are rising. 

     What does it all mean for the housing market?  I am not much for predictions, but the times that I have heard contractors be so bold as to say, "You need me more than I need you," is time to get a little conservative.  That being said, our real estate market is marked by too few homes and, even if home builders were producing at an adequate pace (they are not!), the supply would take a long time to catch up with demand.  In other words, prices will probably keep rising for the foreseeable future.

     It is good to remember, few saw the housing market decline prior to the Great Recession, so a little caution is in order.  For example, what happens if interest rates spike up?  It is probably time to reduce debt and save more cash.  If you are going to buy a home, put as much down as possible and investigate the rental rates for the house.  Like interest rates in the stock market, rents can provide a margin of safety if the market corrects or turns bad.  We just purchased a second home in Arizona so I do think real estate can still be a good buy.

     Yes, year over year, Elk Grove housing prices have risen rapidly.  Remember, we are measuring sales just after the beginning of the pandemic so prices were muted a bit last year.  Still, what a year for homeowners.

 

View Homes in Elk Grove

View Homes in Elk Grove, 55+ Communities

 

Real Estate Market Update April 2021

 

       As of 6/15/2021, there are 64 homes available to purchase in Elk Grove at an average list price of $634,957.  If you would like to view any of them, let me know.  I love to show homes!

 

Elk Grove Market Report for April, Ditto March

 

Random Information From Around the Country

 

Is the housing Market Starting to Slow?  Ryan Lundquist, the Sacramento Appraisal Blog.

 

"As a colleague said earlier this week, “It’s the wild, Wild West out there!” No truer words have been spoken. In some neighborhoods and price ranges, we are waiting in line to tour homes - and that’s WITH an appointment!"  Debe Maxwell, CRS, Charlotte, NC.  

 

"I waited 6 months to get a refrigerator. Three months for a washer and dryer.  The impact will be short-term. Things will catch up.  When?  Only time will tell." Kathleen Daniels, Probate & Trust Specialist, San Jose, CA.

 

"It's bad up here in Canada too. There is a shortage of resin so anything made with resin is on back order for months. So it should prove interesting for home builders and all trades."  Steve Higgins, Kelowna, BC.

 

"It's been going on here for 4+ months. It's not getting better, and many builders are saying it will be a long slow recovery. Some builders have held off on new home starts, and are only doing the concrete basements and will let them sit until materials become available and prices come down." Jeff Pearl, Lovettsville, VA.

 

"The builders in our area are quoting a 22 month delivery time +/-."  Buzz Mackintosh, Frederick, MD.

 

 "Hearing the same thing including builders limiting sales at developments to as low as one a month. Can't get help and can't get materials. These same builders were selling up to 10 homes or more per site pre-pandemic." Wayne Martin, Chicago, IL.

 

"It's not just new construction here but also remodeling since during the shutdown a lot of people used that time to remodel either their home or business. That caused prices to skyrocket a few months ago and things like appliances are in short supply unless you can be flexible about what you want." Diana Zaccaro, Coco Beach, Florida.

 

"Realtor.com reported that in Sun Valley, California median list price was $749,250 in April of 2021 higher from $699,999 in March of 2021." John Pusa, Glendale, CA

 

Housing Notes, Jonathon Miller, New York.

Posted by

             eXp Realty of California, Inc

Raymond Henson, SRES, GRI, e-Pro

Past Client Testimonials   

3412 Babson Drive

Elk Grove, CA 95758

RayRHenson@gmail.com

916-698-8415

 

 

Comments (27)

Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Raymond - I like the approach you took with this Elk Grove real estate market update.  It gets attention. And you explain the reasoning behind it.  

Jun 16, 2021 02:34 PM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Thank you, Michael Jacobs.  I really appreciate and value your thoughts. 

Jun 16, 2021 02:48 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Raymond- one of Larry's builder buddies (they used to work together) had to tell his sales staff to stop writing contracts for now. 

Jun 16, 2021 06:14 PM
Steve Higgins
RE/MAX Kelowna - Kelowna, BC

Hi Raymond,

Good post it's always nice to see how other markets are doing. That was a pretty rude statement from the builder, I would say we need each other. He probably needs you more than you need him, unless he has his real estate license. Thank you for the mention. Congrats on your second home.

Thank you for the mention. 

Jun 16, 2021 06:33 PM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

That is remarkable, Kathy Streib.  Who would have thought any of this last year when the pandemic started?  Hopefully, Larry's friend can start writing contracts again soon. 

Hi Steve Higgins, actually the statement was from the painter to the builder.  Yes, it is best to remember that we need each other.  Situations change and one day that painter may need a little loyalty from the builder.  Thank you regarding our second home.  We have been fortunate.  

Jun 16, 2021 07:27 PM
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I agree with your assessment and it is truly crazy how backed up everything is while the demand is still there.  I think the demand will have to soften as people will get tired of being patient, haha.

Jun 17, 2021 05:20 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

30 months! That's beyond imagining, Ray. And here I was complaining about 8-9 months in my market. Now I'm counting my blessings!

Jun 17, 2021 05:33 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Raymond, I have heard builders have actually raised the sales price with a signed contract, due to lumber increases, and delaying completion too.

Jun 17, 2021 05:34 AM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

I am starting to hear that the lumber & paint supplies are starting to get caught up. However most Builders are still quoting a 22 month delivery

Jun 17, 2021 07:06 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Good Thursday morning, Raymond.

Keep cool, stay safe and have a great day.

Jun 17, 2021 07:20 AM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Hi Brian England.  I think there is going to be some buyer fatigue.  I think I told you, one of my recent buyers asked me in exasperation, "Why won't anyone take my money?"  It is a tough process and only the patient and persistent make it to the end.

 

Hi Nina Hollander, Broker, I was pretty surprised when I heard the 30 month waiting period.  Maybe they are being overly cautious.  

Jun 17, 2021 10:42 AM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

It is a strange dynamic with house prices rising and all the costs of building a house rising.  Hopefully, as supplies come back in line, prices will start easing again.  I have a small investment in a small development here in the Sacramento Area so I am a little worried.  Thank you for stopping by Joan Cox 

 

I did here about the lumber, Buzz Mackintosh and I did find that paint I was looking for, but it took some doing.  I hope you are right and that builders are just being cautious.  After the last year and a half, I do not think I will bet any money on it, though.

Jun 17, 2021 10:46 AM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Hi Roy Kelley.  We are supposed to hit 108 today so thank you for the keep cool blessing.  We need it.  I may hit the pool sometime today.  I hope you are well and enjoying the week!

Jun 17, 2021 10:47 AM
Diana Zaccaro
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

Nice presentation of the Elk Grove market and I especially like the use of the spreadsheet showing the trends at a glance. We seem to be in unprecedented times as far as real estate is concerned and I hope the market stabilizes soon for all of us. Thank you for the mention and congratulations on the second home in Arizona. 

Jun 17, 2021 10:04 PM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Thank you very much, Diana Zaccaro.  I appreciate your input regarding your local market.

Jun 18, 2021 09:57 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Raymond, I have been trying to get my small bathroom fixed.... Contractors have been telling me.... the ones that showed up... too small of a job... or we want X and I asked how you came up with the number and they get into their cars or trucks... with no reply... Endre

Jun 21, 2021 11:48 PM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Hi Endre Barath, Jr..  I am so sorry to hear that and hope you find someone reasonable to get your bathroom fixed.  Contractor should not be so arrogant.  The economy will change again and they will need guys like us.  Most of my life, I was a contractor.  It really pays to provide the best service and be humble even when the economy is hot.  Good luck.  I wish I could help.

Jun 22, 2021 07:59 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Raymond Henson, eXp Realty - I love the title of your blog!  It is amazing how unbalanced the market is, but 30 months for a new build. Yikes!  Great market report for the Elk Grove CA area.

Jun 25, 2021 09:56 AM
Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Thank you very much, Sheri Sperry - MCNE®.   It is amazing and I could go for a little more balance in the market!

Jun 28, 2021 05:17 PM
Mark Don McInnes, Sandpoint
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

It will be interesting to see where all the pricing leads to.  Contractors, rental management, housing.  All have a greater need than supply available.  There is one light switch that can control this growth...interest rates.  I am not saying an on/off switch but maybe a small movement of the dimmer switch?  Obviously the nuances are above my paygrade, yet I am curious why we still hover around 3%.

Jul 04, 2021 02:14 PM