Sacramento County & Placer County 2020 summer real estate market update

This summer has been different from years before.  I suppose this is expected since we're in the mist of Covid-19.  We're seeing a higher demand for houses then there are supply and it's causing prices to rise.  Most buyers seem to be loosing out on several houses before getting more aggressive and finally getting a house.  Since spring, you can see on both charts that the pending's have shot up.  Part of the reason for the housing shortage is rates.  With interest rates down in the 2's and low 3's, a lot of people are deciding to stay put and refinance.  Another factor is people might have trouble getting a new loan due to their job situation.  I recently had two buyers fall out of escrow because they were furloughed. 

Many of my buyers and clients are interested in what the market is going to do this winter / next year.  One can only speculate but I see two different paths depending on the election.   Either way the market is going to correct, the timing will be different due to who is elected president.  I think we'll hit a downturn softer and faster with Biden and with Trump I think we'll prolong the downturn but it will be worse when it hits. 

Uncertainty is in the air.  The stock market is volatile, gold prices are soaring. 

My last update was mid Feb, before Covid hit.  Quite a curve ball I'd say.  I've very curious how this will be after the election come Nov.  I have to say, some of this seems politically charged.

If you have an investment property and you're considering selling, I'm happy to consult and run numbers to see if now is the time that makes sense to sell.  For buyers, I suggest getting a great loan officer that will get you DU approved and you're going to have to be aggressive to get a house right now.  Some buyers of mine have given up.  It can be frustrating!  Having a long time experienced realtor like myself that knows most of the other agents in town is also a helpful factor when trying to get your offer accepted. 


Sacramento County Chart thru June 2020


Placer County Chart thru June 2020

Roseville Housing Market

I pulled this from fannie and freddie & zillow.  It's about the market as a whole, everyone still optimistic!

FANNIE'S FORECAST

The housing market looks good according to the February 2020 Economic Outlook from Fannie Mae's Economic and Strategic Research (ESR) group. Summing up the report, Fannie Mae's SVP and Chief Economist Doug Duncan said, “Looking ahead, we continue to anticipate that the economy’s resilience will help keep housing on a firm growth track. In fact, our updated housing market forecast shows greater strength in essentially every part of the housing market extending through the first half of 2021."

RATES & REFIS

Refinance activity surged to the highest level in seven years according to Freddie Mac's Primary Mortgage Market Survey for the week ending February 13. Freddie's analysts characterized refinance and purchase activity as robust, "with mortgage rates hovering near a five-decade low" and "reflective of a solid economic backdrop."

CONFIDENT CONSUMERS

Consumer sentiment reflects the bullish outlook of economists and experts. Fannie Mae's latest Home Purchase Sentiment Index®  (HPSI) rose for the third straight month in January to 93.0, moving closer to the survey high of 93.8 set last year. The (HPSI) is a composite index designed to track consumers’ housing-related attitudes, intentions, and perceptions.

TESTY TRANSACTIONS

Buying and selling homes causes couples to clash according to a Harris Poll commissioned by Zillow. A whopping 77% of respondents who bought property with a significant other in the last 10 years admitted to arguing during the process, while 71% who sold a home admitted to fighting during the experience. Re/Max Gold - Chad Phillips

Chad Phillips Real Estate Broker Associate  RE/MAX GOLD 916-390-1476 | 2998 Douglas Blvd #125 Roseville CA.  95661 |chad.remaxgold@gmail.com | www.RealEstate-Roseville.com  LIC # 01405825

Jan 2020

Market Update with Chad Phillips 

Re/Max Gold Roseville

We're seeing the market start slow this year.  This is typical; however, what we're not used to seeing is inventory this low.  Generally I'm of the opinion for my sellers to wait until spring time, or at least after the Superbowl to list their house for sale.  This is the first year where I'm thinking a seller will potentially gain more on the sale of their home by listing now and beating the usual influx of homes that tend to come up for sale in April/May. Interest rates are near record lows as well.  With rates in the low to high 3's, it's certainly an incentive for buyers to make the move.  Rates are also encouraging some folks to say put and refinance.  I'm currently in that boat!  I'm looking to do a cash out refi on my primary to pay off a rental property.  The numbers make sense! Another benefit of a refi could be to shave off years on the loan.  Going from a 30 year to a 20 year or even 15 year loan and your payment is roughly the same.  That will save you a lot of money over time. As for the coming year, 2020 looks to be another year of gains in property values.  There are several factors that indicate that we're on a solid path, notably the jobs reports, low inventory, interest rates and overall strength of the economy.  I do foresee some factors that are posed to negatively effect us though.  This rent control bill will likely have a negative impact.  The intention of the bill is to keep rents low; however, I think the 5% a year cap is only going to encourage landlords to adhere to this an impose the 5% a year.  Another proposition on the table is getting rid of prop 13, but they disguise it by this title: California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative.  If this goes thru it will drive more businesses out of California.  If commercial property owners property taxes skyrocket, it's going to translate to higher leases.  It might take a couple years to hit home, but when leases come up for renewal we'll start to see more offices buildings empty.  The lack of common sense here is disturbing, and unfortunately deliberate. For what it's worth, I'm predicting a good 2020 and then a market correction in 2021.  Regardless of who wins the presidency!  The market has rebounded from the bottom at 2012 to surpass values of the past peak in 2005.  There are no indicators of a crash like we had before, but a price correction is what I'm preparing for.  Only time will tell!  Keep your real estate investments conservative at this point.  If you need help running the numbers on a project, feel free to contact me and let's see if it's viable and worth doing.  Have a great 2020 folks.