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.  

Remax Roseville CA Broker Associate

 Welcome to the bustling city of Roseville, California, where the real estate market is thriving! As a Remax real estate agent in Roseville, I'm excited to share with you some insights about the current state of the Roseville real estate market.

Over the past few years, Roseville has experienced tremendous growth, with more and more people flocking to the city for its excellent amenities, beautiful landscapes, and thriving economy. The result? A highly competitive real estate market, where both buyers and sellers need to be savvy and well-informed to achieve their goals.

For buyers, Roseville offers a wealth of opportunities to find the perfect home. From cozy townhouses to spacious family homes, Roseville has it all. As an experienced real estate agent, I can help you navigate the market and find the home that meets your unique needs and budget. Whether you're a first-time homebuyer or a seasoned investor, I'll work with you every step of the way to ensure a smooth and successful transaction.

For sellers, Roseville offers an excellent opportunity to cash in on the city's booming real estate market. However, to sell your home quickly and for the best possible price, you need an experienced real estate agent with a proven track record of success. That's where I come in. With years of experience in the Roseville real estate market, I know exactly what it takes to sell a home quickly and efficiently. From setting the right price to staging your home for maximum appeal, I'll work tirelessly to ensure a successful sale.

But the Roseville real estate market is more than just buying and selling homes. It's also about building strong relationships with clients, understanding their unique needs and goals, and providing the guidance and support they need to achieve their dreams. As a Remax real estate agent in Roseville, I'm committed to going above and beyond to provide my clients with exceptional service and support.

So whether you're buying, selling, or just looking for advice on the Roseville real estate market, don't hesitate to get in touch. As a Remax real estate agent in Roseville, I'm here to help you achieve your real estate goals and make your dreams a reality.

Roseville real estate market update spring 2023

I wanted to look into the stats as it's time for another update and the market slow down is noticeable.  Below is a chart showing home sales from last year compared to this year. It's safe to say the average amount of homes selling right roughly 1/2 of what the activity was last year.  Everyone in the industry will tell you we're feeling the pinch.  Companies are cutting back on overhead, supplies and manpower.

With this slow down though, what are we seeing with prices?  Homes are selling at 94% of original asking price.  This is something to take note.  Buyers are sensitive to their monthly payments.  The rise in interest rates has a direct effect in your monthly payment.  Lenders are trying to get creative with seller credits to buy down the rates so monthly payments are affordable; however, I'm not sure I would go that route.  In general, I think I would focus on the lower purchase price.  One can assume rates will come back down and you'll be able to refinance at that time.  I think it's a calculated risk.  Property taxes are based on sales price so I prefer to keep that as low as possible too.

This isn't a typical year so far.  A lot of people are staying put with the current rate they have on their house.  There's not much motivation to move right now.  Prices are holding strong considering how much rates have gone up.  Inventory in our area of active / pending is around 1400 units, where in years past it's around 4500 units.  That's roughly 1/3 of the activity that we're used to having.  I think we're about to see some inventory come available in the coming month.  The weather has likely kept people in place, we're going to have a late spring.  

I have several properties I'm currently working on that will be on the market soon.  If you're looking to make a move, feel free to contact me to help strategize a game plan.  I have good lenders I can recommend and explain  how to structure things to accommodate your timing. 

2023 real estate and market

 It's a little soon to be talking about 2023 without it only being speculative.  As of now we're seeing rates around 6.25% on a 30 year fixed.  We've been told the feds are going to cut back on the rate hikes as we're seeing positive signs in the economy with inflation.  We're not out of the woods yet!  

Home prices in Placer county are down 10-15% from the high in July 2022.  Prices over time will continue an upward trend.  This correction has mostly to do with supply / demand and of course the value of the dollar.  Inflation was caused by the government printing money and wreck less spending.  I don't want to get political here but I prefer our gov. to be conservative when it comes to economic policies.  To be transparent, I'm more liberal on other things.  Really though, I guarantee they don't manage their own finances like they do the tax payers money.   At what point is the deficit going to be unmanageable?  Are we already past the point of no return?  The scary answers to those questions I believe is that the interest payments alone are unsustainable and we'll default.  Next question is when?  I think the answer to that questions is scary too, not too far away... maybe within 5 years.  With the impending default, what will that do to our county?  Not an easy one to answer!  We're in a global economy now and defaulting will cause a ripple effect and likely take down other countries too.

It's only Jan 6th and my phone is already ringing.  I'm going to show a house in 45 minutes to a buyer.  Sellers are calling looking for a game plan.  I was curious before Christmas how this year would start out and it's going better than I expected.  There will be plenty of business out there.  People are always having to move.  Weather its for work, marriage/divorce, kids... there's always activity.  We are expecting more people to hunker down this year.  A lot of people like myself are in a cozy fixed rate mortgage and don't want to mess with anything in the 6's.  We're going to see roughly 30% of real estate agents get out of the business.  There's simply not enough deals to go around.  There's the ol saying too, 20% of the agents do 80% of the work.

For buyers out there, my advise is to run numbers with your lender.  If you don't have a good lender, I can recommend several.  Find your comfort spot on payments and that will dictate your price range.  Review all your options with the lender.  ARM loans, jumbo, bridge...  Over the past 20 years selling real estate here at Re/Max Roseville, I would stay away from ARM loans, but now I think it's a viable option.  Get in with a better rate and look to refi in 5 year.  Do an ARM loan with a seller credit to buy down the rate!  Get it in the 3's maybe.

With regards to selling a property in Placer county right now, we're looking at a downward trend in prices.  If I was a betting man, I would guess this downward trend will change come spring.  It's likely better for a seller to hold off from going on the market right now.  I put more power in the buyers position, but as I mentioned I think that will change.  We're accustom to seeing the market down in the winter and up in spring.  This trend is likely to repeat.

With all this said, I don't have a crystal ball.  We can only use the information we have at hand and guess as to what the future holds.  One thing I've learned is that it's all about perspective.  Eye of the beholder.  

I welcome a strong and productive 2023 selling houses in Roseville and Rocklin.  

Cherio!

Investors doing 1031 exchange in 2023

 In 2022 I did an abnormal amount of 1031 exchanges for clients. Finding replacement investment properties that make sense and cash flow with 6% cap is what one should expect. Avoiding capital gains is the main goal of course but you want to park your funds in a property that makes sense.  I’ve been a full time roseville real estate agent since 2004. Over the years I’ve come to know what makes sense when doing a 1031 exchange.  Knowing the time frames, 45 days to identify a property then closing within 180 days is important to keep in mind. 

If you’re needing to do a 1031 exchange, make sure you contact an experienced roseville realtor like myself. 

Feel free to give me a call with any of your real estate questions. 

Re/Max Gold - Chad Phillips 

Fall 2022 Roseville Real Estate quarterly update

 I reflect on the market over the years and it's always interesting to me.  We try to predict what will come next and we're usually wrong.  I know I'd return my crystal ball if I could.  With that said, I wasn't completely wrong.  We knew we were close to the peak and the Roseville home prices had to subside at some point; however, I thought prices were going to come down more.  Who would have predicted rates going to 7% in 1 year?  

It's been a been an exciting and productive year for me.  I've done more business this year than ever before and still have 3 months left.  The first half of the year I was doing 5-6 sales a month.  Now I'm down to 1 a month.  I'm not the only one to slow down!  Title companies have laid off a lot of people, lenders are cutting back on their processors and underwriters.  Our company function budget has all but dried up.  Everyone is tightening the belt and for good reason.  We're just now starting to see more doom and gloom predictions for 2023.  This last fed rate raise sent shock waves thru the stock market and the real estate market.

It comes down to affordability!  Rates nearing 7% will force prices down.  Inflation is taking a bigger bite out of everyone's paycheck.  Supply and demand is like gravity as both are extremely strong forces.  Demand for housing is still strong, people need a place to live.  Rents are still holding strong so that's helping to keep home values up, but I think affordability is going to push values lower in 2023.  If you have the ability to save up some money, there should be some good deals next year.  I'm already starting to see some short sales.  We haven't seen any short sales or foreclosures in a decade. 

I know of a large local Roseville home builder who had 21 escrows in August and 20 fell out.  That's no bueno!  The main reason why is that buyers aren't able to lock in interest rates when they first sign a purchase contract.  When the house is build and ready to close the deal, the buyer needs to revisit the lender with the current interest rates.  Buyers went from low 4's to high 6.  A large enough swing in the rate to cause them not to qualify for the purchase anymore.  Builders are doing everything in there power to keep prices up in the developments so they resort to offering to buy down the rate, more upgrades and full commissions to agents.  Yes, we're again best of friends with the builders when the market goes down.  Some builders weren't offering a co-op with agents there for a while.

I know of some land development projects in Orangevale, and Sacramento that will be available at discounted prices as land is a long term hold a downturn in the market occurs.  There's hold costs associated with that and usually no returns.  

My land development in Roseville is coming together.  At the corner of Main St. and Porter, I'm mapping that for 10 lots.  I'll have the tentative map and conditions soon.  I'm currently awaiting the city's review of my plan.  This will be a good project for a small home builder in Roseville.

Let's hope the stock market and real estate market doesn't tank like last time.  Certainly different circumstances involved, but that's not to say we couldn't have the same result.  My advise is to be cautious and conservative right now.

If you have a property or project you have questions about, feel free to give me a call.

Re/Max Gold - Chad Phillips

Roseville 2998 Douglas Blvd. Ste 125

Roseville CA. 95661

916-390-1476