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.