Top Producer Magazine March 2024 Sacramento / Roseville Real Estate

 Spring is upon us, and we're starting to see more home come available.  It's typical for the market to pick up this time of year.  I'm getting several properties ready for sale right now myself.  New construction is in overdrive, they are cranking out houses as fast as they can.  In 2023 new home sale accounted for 25% of the houses sold in the Sacramento / Placer / El Dorado Hills counties.  This is a substantial amount of sales occurring.  There's a shortage of resale homes and it's having an effect on those of us in the business.  There's simply not enough homes to keep everyone afloat in real estate.  

Prices are on the rise too.  I was working on several properties to get ready for sale and now we're revisiting the valuation.  There's a house I'm putting on the market next week in Serrano and we elected in the end of 2023 to list at $850,000.  Now I'm thinking we'll get upwards of $900,000 for it.  It will be the lowest priced house in Serrano.

I don't think I've mentioned this before but 3 years ago I bought a property in Roseville.  2.5 acres on Main st.  It's raw land that I entitled and broke into 10 lots.  It took perseverance and money to get the tentative map and brought all the way to final map.  I got multiple offers on my project and it's currently in escrow.   It was a great project, I learned a lot in the process and I stand to make a good profit too.

I mention the Top Producer Magazine as I was featured broker as a top selling Roseville real estate agent.  I've been in the business for 20 years now and I've built relationships with business professionals and past clients.  I've gained the experience and trust of clients and peers which makes things even easier in this tough and competitive business.  We're always learning and doing new things.  I specialize in partition sales and that's something I didn't even know about until 10 years in the business.  There's lots of different aspects to real estate.

Looking forward to spring 2024.  If you have any real estate questions, reach out to me.

Chad Phillips

Re/Max Gold

916-390-1476

Looking for a fixer in Sacramento CA?

There are ton of investors out there currently looking for fixers right now.  I get hit up daily from buyers that are all cash looking for a good house to fix and flip in Sacramento.  We're seeing it become difficult with the low inventory and the margins are minimal.  Some investors are buying a paycheck.  They will make money on the deal but it's mostly from their labor that they are putting into the property.  I'm no stranger to doing home improvements and I know what things cost.  Everything from materials to labor has increased dramatically since Covid.  

I reciently went to look at a property in Sacramento that was inherited by my client and he wanted me to take a look at it to see what he should do.  It's a 2 bedroom 2 bath, 1400 sqft on 1/3 of an acre built in 1944.  It comps at $400,000; however, it's going to be well over $100,000 to rehab the property.  There's a ton of dry rot, electrical isn't grounded (2 prog), the kitchen and bathrooms need a full gut.  It can become a rabbit hole and end up costing $150,000.  For this to pencil, I would be comfortable around $225,000.  The crazy thing is, I could sell it today for $275,000 no problem.  My advise was to sell it "AS IS"!  Don't put money into it.  He's not a contractor and it makes more sense to walk away from it.  Take the money and run I said.  I also told him I wasn't interested in buying it as it needs too much work.

I have several fixers coming on the market soon.  2-3 houses in Sacramento, 2 in Roseville, 1 in Orangevale...  Many of the fixers I get are court ordered partition sales.  They are properties that are owned my multiple owners and one if forcing the sale.  These typically have differed maintenance.   As I'm a remax agent in Roseville, I'm also a court appointed referee on these properties.  I'm not allowed to represent the buyers in these transactions; however, I can put you in touch with a broker.

January 2024 roseville real estate agent

 We’re off to a strong start in 2024. Inventory is starting to pick up and rates are holding steady. Personally, I have a half dozen listings I’m working on to sell soon. I have a Listing in Serrano, El Dorado Hills, two Partition sales come in in Sacramento, I’m selling 42 1 acre lots and El Dorado Hills off Green Valley Road, I have a townhome coming for sale in Natomas 2200 ft.² four bedroom three bath Priced at 540,000. I also have a subdivision for sale in Roseville located at 1028 Main St.  This is a 10 lot project, quarter acre lots. Several conditions left before final map is approved. This project is priced at 1.2 million.  

I can tell you we’ve already seen a decrease in them out of agents and lenders in the business. 2023 was a difficult year with minimal amount of home sales and placer Sacramento and El Dorado counties.  For example, our office typically has around 90 to 100 agents, we’re down to 60.  Much of what the Roseville real estate market is experiencing is sales that are life events. What I mean by that is either a forced sale like a partition, or marriage divorce…  People are holding off on buying up and this is keeping inventory tight. 

We have 14 different builders in Roseville California right now and they are all building as quick as they can. Financing incentives and they’re able to sell new construction rather quickly.  

Having been in real estate for 20 years, I’ve seen many changes in the market.  I just came across my BPO last week since 2011.  I reached out to accompany. I used to do foreclosures with to get an idea of what the market might look like this year. They told me they had 80 houses in the foreclosure process in the Roseville area.  It seems we’re gonna have an uptick of short sales and foreclosures and Sacramento placer County starting this year.  The cost-of-living in California has gone up substantially, and a lot of people are relying on credit cards to bridge the gap.  Folks might be looking to sell as they have equity. However, they’re not able to keep up with the payments.  

If you find yourself in a tight situation and looking for a solution, you should reach out to Roseville real estate agent, Chad Phillips.  If it’s through me or other business professionals, I can help guide you and offer the best solutions for your situation.

  2024 real estate projection in Placer, Sacramento and El Dorado Hills real estate market

There's a general conscientious that the real estate market as a whole will improve in the coming year.  We're expecting interested rates to tick down further which will help overall affordability for home buyers.  On top of interest rates expected to come down we're estimating that prices will remain stagnate with more likelihood of coming down slightly.  Zillow and other online real estate companies are suggesting a decline in Roseville home prices around 1.4% in 2024.  This is a small percentage, I'm sure the over under percentage of error in the estimate is higher than the prediction.  I can tell you that we've seen new home construction cranking out houses in 2023.  New homes accounted for 25% of all home sales in Placer, Sacramento and El Dorado counties in 2023.  They will continue to build new homes as home builders have projects lined up.  Some of the larger projects like Folsom Ranch is going to be under construction for 3-4 more years.  Foslom ranch is going to be beautiful when it's all done and built out.  Some of the features I've seen with the commercial and shopping centers there will be amazing.  Personally I think they need to address the traffic there at E. Bidwell.  It can be crazy around 5-7pm.  Those new homes in Folsom are on small lots and going for big money, around 1 million.  I've already sold a house in there, it was a resale 3600 sqft for 950K, and that was almost 2 years ago.  I think we'll continue to see people say put with there sub 5% interest rates and the market will be mostly folks moving for work and life changes; such as, divorce, marriage, death...  Plenty of people are wanting to move up but I think the numbers have to make more sense before people want to take on more debt.  

When it comes to the industry, we're seeing more and more people getting out of the business.  Lenders, real estate agents, title officers and so on are finding themselves in a situation where they are depleting all their cash and need to get a new job.  At the end of the day, there's simply not enough transactions to support the amount of people that got into the business.  This is a cycle and trend and I've seen it before.  When the Roseville real estate market is hot, then people jump on the band wagon, but when things get tough it thins the herd.  I've been at this for 20+ years now so I've been able to work multiple angles to generate business.  Some of my new clients come via google, but most of my business comes from repeat clients and professional referral.  I specialize in partition sales so I've networked with attorneys in the area to assign me as the listing broker in those situations.  I've also focuses on land development thru clients and I'm also doing my own subdivision in Roseville.  It's only 10 lots on Main St. in Roseville; however, it's been a great first hand experience as to the process.

At the end of the day, it's a good time to buy a house in Roseville area.  Make sure you have a good local lender, I can recommend several if you need.  As long as the monthly payment is in your budget, it's likely you'll be able to refi in the near future and get that payment even lower.  If not and rates go up then you'll still be happy with your rate and payment.  Another key is to have a broker like myself who knows most of the other brokers in town to help negotiate on your behalf.  People tend to be more frank and forthcoming with people they know.  

I look forward to another productive and exciting year selling real estate in Roseville 2024!

Sacramento / Placer / El Dorado Hills Real Estate Update Fall 2023

 We're in interesting times.  A time where I'm uncertain what the future holds.  I usually have a better gut feeling about the market as a whole and what to expect for the coming year.  Thus far, we've seen housing prices hold steady with the rise in interest rates.  Currently sitting around 7.75% on a traditional 30 year conventional loan.  The monthly cost of buying a home has shot up immensely and to put things into prospective:  A $500,000 loan at 3% PI is around 2108 a month.  Now with rates near 8% you're looking at a PI cost of 3668.  In just 2 years the same monthly out of pocket cost shot up nearly $1600 a month.  This isn't peanuts folks!  I wonder if prices will come down to balance affordability; however, inflation is having a negative effect on the dollar.  It's not that house values have come down but the dollar has be devalued.  With the current course of actions of those in charge in our government, this problem is only being exacerbated.  They keep printing more money to fix problems.  Many economist are expecting a recession or worse in the near future.  Some would argue it's already here.  Michael Burry who predicted the 2008 crash and bet against the housing market put a big wager in.  1.6 Billion put on the S&P and stock market to drop in the next 6 months.  He's a numbers guy and I hate to think it but he's probably right.  If people start to panic and withdraw we could see a massive collapse and the dollar devalued even more.  A lot of people a looking for ways to hedge against large losses.  Commodities are popular, like gold and silver.  I like the idea of something tangible.  No funny money bit coins for me but that's my opinion.

Are we going to see a wave of foreclosures in the Sacramento region again?  It's not looking so with the date we have.  Yes, we'll have an uptick in foreclosures; however, it will likely stay at an acceptable range.  There's a lot of Americans that are hunkering down and locked in at 2-3% so they can weather the storm.  Nearly 1/3 of Californians have their house free and clear.  This is obviously a good place to be in.  This is not the time to over leverage your position.  With that said I think you can deduct that I'm financially conservative.  I have clients that let it ride and take big risks.  I just don't have the stomach for it and I need to be able to sleep at night.

We're going into an election year with the world unstable in the middle east, Russia and even China with Taiwan.  There's a lot more variables and uncertainty coming 2024.  If Iran gets a nuke, it's plausible that starts WWIII.  I'm not a dooms day person, just looking at the global issues that are effecting us here.  With more continued and heightened conflict we can expect energy pricing to continue to rise.    Energy prices are what hits our pocket book the most.  I'd like to see the US change some policies that would help us but the Biden admin seems to be more concerned with continued control of the county.  

For home buyers in the area, I would want to make sure you are comfortable with the current payment with hopes to refi in the near future.  There are some short term buy down products that might be a good tool to use.  I can recommend several good lenders that will give you as a buyer all your options and make suggestions with your risk tolerance.  

Let me know you're thoughts and if you have any real estate needs.

Re/Max Gold - Chad Phillips

Cell: 916-390-1476

Fall 2023 real estate update Placer / Sacramento / El Dorado Hills

 Well folks, it shouldn't be to anyone's surprise that rates are around 7% right now.  This is a factor that cannot be ignored when calculating the monthly payments on your mortgage.  There are several ways to try and subvert this; however, I'm not a fan of loan programs that get creative.  There's always the down side to them.

Most people are holding steady at this point.  If you already own a house, then you likely have a rate in the 3's, or better yet in the 2's.  I'm right there with you at 1.99% on a 15 year.  I'll never sell!  Like myself, this is driving the inventory to lows we haven't seen since 1994.

The majority of listing right now are divorce sales, forced sales, hardships situations.  It's become a tough environment for real estate agents.  There simply isn't enough sales to support the amount of licensed agents in the area.  It's effecting loan officers too.  People are having to leave the business in order to get a pay check.  I've been fortunate that I've been doing this for 20 years and I've been able to build up my relationships where I've staying busy, but it's much slower than last year.

I think most people were expecting prices to recede when rates got up this high. It makes sense when you're thinking about affordability, but this really hasn't been the case.  Prices are still holding steady.  It looks much more likely for rates to come down by the end of the year and more next year going into an election year.

I'm working with some developers as new construction is still going strong.  We have a shortage of properties so the home builders haven't slowed down.  Costs are up and they're doing some creative financing to get rates down in the 5's for buyers.  I have a new project in El Dorado Hills that I'm working on.  This is a new gated community with 1 acre lots.  These lots have views of downtown Sacramento and Folsom Lake.  There's a total of 42 lots that span out among 113 acres.  Prices start at $465,000.  We're taking reservations at this point.  Final map is expected in 3 months.

I have another development in Roseville on Main St.  On the corner of Main St. and Porter is 2.5 acres that I've mapped for 10 lots.  These are .25 acre lots.  This is a good size where you can put a main house and an ADU.  It's not on MLS as I'm still awaiting the final map.  Currently in the 2nd final map submission.  It's likely going to take 4 submittals.  

I have several new listings coming up soon.  A duplex in Roseville, 2 partition sales in Sacramento, small house in Orangevale.  

Let me know if you have questions!  

Re/Max Gold - Chad Phillips

916-390-1476

Partition Action - Forced sale of a property

A referee is a neutral third party appointed by the court to oversee the partition action and ensure that it is carried out fairly. In the context of real estate, the referee's duties may include determining the value of the property, overseeing the sale of the property, and distributing the proceeds among the co-owners.

The referee may also be responsible for resolving any disputes that arise during the partition action, such as disagreements over the value of the property or the distribution of proceeds. In some cases, the referee may need to hire appraisers or other experts to assist with these tasks.

Overall, the partition action and the role of the referee can be complex and involve a lot of legal and financial considerations. However, with the right guidance and expertise, it is possible to navigate this process successfully and ensure that all parties involved are treated fairly.

The above was my first attempt using ChatGPT.  Pretty dry stuff!

I mention partition sales as I specialize in them.  I'm currently working on 3 partition sales right now.  It's when there are muliple owners of a property and one forces the sale.  These situations usually include unmarried couples that break up or siblings that inherit a property and one doesn't want to sell.  It's usually the one living in the property at no cost.  If you own any percentage of a property in California, you can force the sale.  The other party will have first right of refusal to buy you out, but most often that isn't an option for the opposing party.

An attorney is usually involved in these situations and they seek an interlocutory judgment.  From this point a real estate broker is recommended to the court to be the referee.  I say that openly as the referee doesn't need to be the real estate brokerage that is going to list and sell the house; however, that's been the case for every partition that I've done.

Once I'm assigned as referee to a property, I become an officer of the court.  I need to take control of the property and have authority to sign on behalf of the owners at title.  Of course it's my duty to get the most money I can for the property and oversee the disbursement.

Most of the partition action files I've been involved in are in Sacramento County.  I have done several in Placer county.  The location has no effect on the process.  Every partition has it's own challenges.  For example, I had one last year where I ended up having to sell the property for cash, and never had a chance to see the property.  The cash buyer didn't either!  The sheriff's department decided not uphold the eviction and didn't want to evict an owner from their house.  At the end of the day, it cost him and his sister around 100K.  I would have been able to sell the property for much more had there been adherence to the court order and some cooperation.  

Partition sales are a small portion of my business here selling houses in Roseville.  It's a small niche market that most agents don't even know about.