I’m still trying to find the answer to this one. In the last post of Sacramento real estate statistics it was pretty clear that Sacramento had about a ten month inventory of unsold homes. Of those, about a third were bank owned houses or short sales.

Consumers usually believe these are better deals than the regular homes in any particular neighborhood. (Why I’m still trying to understand!)And so, there are a lot more buyers for short sales priced the same as a “normal” or individually owned house.

But that being said, not all short sales are going through. Just last week, I canceled my own listing in Colonial Village although it was priced well because the lender would not respond to the offer which was “too low” according to their appraisal. Problem with the appraisal: too high.

So between the offers being too low and the lender’s appraisals being too high, a lot of homes that are technically short sales are not going through. Which means they will either be auctioned or be back on the market as bank owned properties. Unfortunately because they will be left vacant for long lengths of time, they may have issues with deferred maintenance and / or vandalism.

However, it is important to note: if you made an offer on a house and it didn’t go through during the short sale phase, you might be able to revisit it and make the same offer after it is a bank owned property (if it didn’t sell in auction). The earlier rejection may have been because the seller didn’t qualify for a short sale and have nothing to do with your offer.

Something to think about.

I met some wonderful people today while showing a property in Auburn. It is a country home across from a golf course on an acre… oh, and it gets better - is for sale under $300,000. While it is not Elite Properties’ listing, the potential buyers appreciated knowing that they could ask pointed questions about the house without hurting anyone’s feelings.

Which makes me think about the new club of buyers I’ve been running into lately. This market sure has created a new surge of investors and as well as first-time buyers. I guess every new market downturn brings with it its own club of new investors. What I’m seeing is the new buyers are not as scared of a market turnaround. They’re in it for the long haul. Even the first-time buyers today have an eye to retiring with their real estate intact. They understand the value of a home and are aware of the advantages of rental properties.

Like the clients I met today said, “Owning real estate in California is like owning gold. Why would you EVER sell?”

Well said! I thought. My thoughts exactly.

See for yourself. Here are the latest statistics hot off the MLS:

Total number of homes for sale on or before July 31, 2007: 11,016 with a median price of $329,960

Total number of homes pending sale between July 1, 2007 and July 31, 2007: 1038 with a median price of $315,000

Total number of homes sold between July 1, 2007 and July 31, 2007: 928 with a median price of $330,000.

The median price is up only $2,000 from last month and sales have fallen since June 2007. In June, Sacramento county recorded 1068 sales.

Average days on market remain between 50 - 60 days.

Lots to look at and flat prices. Good time to buy!

Sacramento real estate investors are (finally!) standing up and taking notice. The Handyman’s Special might be sold pretty soon. Now, with this being a short sale, it still has to go through all the right channels with the lender (Countrywide) to be approved, but since it had been approved earlier at $239,000 without knowledge of the pest report, this one should be a pretty simple “yes” or “no” based on price.

In a short sale, the lender is usually willing to look at only one offer at a time, so of the ones that come along, I’m hoping we get a decent enough offer to submit to Countrywide. That being said, there has been genuine interest. Yesterday and Monday felt like a hearkening back to the real estate boom market we had in 2004, what with the number of Realtors® and others interested.

Want a closer look at the property? I plan on showing it Sunday between 9:30 and 10:00am. Feel free to come!

For all those of you concerned about real estate values falling in and around Sacramento, listen up! Today Elite Properties’ floor agent (me!) received eight - count it - eight inquiries from seven different people on eight different listings.

The buyers seem to be waking up and realizing there’s deals to be had around here!

While bemoaning the idea that none of my buyers want to buy right now and we’re hearing the “we’re holding off buying for now…” (By the way, never - NOT ONCE did I hear that when prices were headed up two years ago. Heard it from sellers that wanted more for their home - their houses are still on the market. Do we see a similarity here? Hmm… buyers?)

… That sentence got too long, so let me begin again. While talking about our potential buyers, Huck - my preferred mortgage consultant - and I got into an email commentary of the Sacramento real estate market and how it will end eventually. Here’s a direct quote:

“Here’s what will happen: Without [the buyers on the fence] constantly in (watching) the market, inventory in a neighborhood of interest will drop, then some house will sell
for a comparatively high price, it will then become “the comparable” for
everything selling subsequent, and we’ll be off on the upswing again. I’ve
seen it happen over and over…

“There’s one almost identical to mine that did just that and it closed about
2 wk ago, driving mine from about $850,000 to $900,000 in one shot. Now
there’s another one like mine pending for $895,000.

“Truly savvy investors are willing to buy BEFORE that happens, and are
willing to see lower prices for a short time before the rise…”

Something to think about!

This morning while searching the MLS and getting lost in all that real estate inventory out there for sale, I noticed a house on Priscilla Lane that is such a steal, I would write an offer on it today. Alas, I’m fully invested and my husband will definitely want to send me to be mentally tested if I thought about another home.

My ambition, like someone else mentioned in the SacBee a while ago, is to own entire streets. Monopoly player, for a long time (and Scrabble too, which is the right combination for a Realtor®, I guess!) This real estate investor owned all the houses on the street he lived on and the Bee cautioned him that he was not “diversified!”

Let me fall back on my favorite quote from Warren Buffett again: “Diversifying is insurance against ignorance.”

But, back to the neighborhood: the Colonial area is largely ignored by investors and first-time homebuyers today for two main reasons:
1. There seems to be a general look of untidiness in the neighborhood, thanks to the vacancy factor of foreclosures, and
2. The zip code 95820 is shared by Oak Park, which we know not too many people want to move to because of the crime.

To combat that, I say:
1. Foreclosures have hit this area hard - which makes it perfect for you investors! and
2. 95817 is also shared by Oak Park - these are postal codes, not crime or wealth codes.

And the fact remains, if you’re looking for great deals, they’re all here! The average home is about 1000 sq. ft. with 3 bedrooms and 1 bath. Backyards are modestly sized and streets are cleaned every month on third Thursdays. (Yes, I did live there for a while - in a home we knew would be a good rental in a couple of years.) Most homes have real hardwood floors and if you get lucky, homeowners have put on new roofs and central air. Rent hovers right around $1250 a month. Property values are depressed now to about $180,000 but generally have been hanging around $250,000 for a turnkey home.

If you have an extra $50,000 to invest, you should be looking around Colonial! Consider these!