3rd quarter real estate update for placer and sacramento county

August 6th 2019 - Real Estate Update - Placer

I like to do the quarterly updates and relay my observations as it keeps me more aware of what the market is doing.  As a full time real estate agent in Roseville we see trends and deal with things daily.  When you get down to it the market adjusts mostly on the basis of supply and demand.  Of course there are countless other factors that come into play, such as rates, job markets, economy as a whole, building fees, government regulations and taxes...
It's been 10 years now since I joined Remax in Roseville Ca.  I like reviewing the trend graphics as its a good visual representation of what the market is doing.  Below is a graph showing the number of homes that are active pending and sold for Placer county month over month.  Since winter we're seeing and increase in the amount of homes for sale and pendings and solds have dropped off.  July's numbers aren't showing up yet, but they will show the continuing trend.  Buyers will have a better chance of scoring that house they want to buy, but keep in mind the nice houses priced right will still gain multiple offers.
I think it's more interesting to see the graph of the value ranges where people have been buying houses and how that's changed since 2012.  As you can expect the 200's and 300's where hot back in 2012 and now it's 400's and 500's.  People have gained equity and are buying up and it's hard to even find properties sub 300k in Roseville / Rocklin area.
Interest rates have been great, they keep coming down too.  If you think about it, the feds need the rates low due to the national debt problem they have.  Interest payments alone are almost a run away train.  If rates were at 6%, I'm not sure we'd be able to pay.  My point is, don't worry about rates going up any time soon!
We are due for a market correction though.  Are we seeing that now?  I don't think so!  I think we're seeing the normal trend of the end of summer slow down.  We're getting closer to an election year and that seems to be a factor.  Trump will do what he can to keep the ball rolling but inevitably we'll see a correction.  For those investors out there, stack some chips.  In a couple years I think we'll see a good time to pick up some rentals.  For home buyers, find something and go with it as long as the payments are comfortable.  Even if the market drops 10-15 percent, over time 5-10 years you will be fine.

If you have any specific real estate questions, feel free to give me a call.  I work on commercial property, land developments, partition sales, trustee sales...  It's a fun business that is always changing!

 

Re/Max Gold - Chad Phillips
2998 Douglas Blvd Ste 125
Roseville, CA. 95661
916-390-1476
Real Estate Broker #01405825

Sacramento / Placer Real Estate Update May 2019

I've reviewed the metrics for both counties and they are roughly have the same market indicators.  We're in a stall or flat market right now.  Things are selling and around 50% of homes for sale are selling with multiple offers.  This is a strong indication; however, we've seen the prices flutter and max out.  Unless a property is priced right it will sit there and require price reductions.   Buyers are now more opt to write low ball offers and contingent offers to make the transition more favorable for them.  This is a clear indication of a change in the real estate market.  At the end of the day it comes down to affordability.  Either prices or rates have to come down.

Rates have come down, around 4% now.  It would seem low rates would help trigger buyers that are on the fence buying a house in Roseville; however, people seem to focus more on price than rates.  It makes sense.  I did notice something rare yesterday.  The treasury bonds for the 1 month were better then the 10 year.  For those that don't know what that means, it suggests that there is concern of economy.  Things have been going pretty good since Trump came into office, but it never lasts forever.  A recession is predicted by some in the next 18-24 months.  I'm in agreement, although I think it will be more of a slow down with GDP and a market correction.  If you look at the charts and what real estate prices have done since the bottom of  2012, its about 20% appropriation a year.  That's been a great ride, brought prices back to where there were in 2005, but 20% a year is unsustainable. 

Some investors are liquidating and looking to sit on cash.  It wasn't that long ago when things collapsed and no one seemed to have any cash to take advantage on the situation.  We learn from our mistakes.  I'm looking to pick up another rental property but I'm steadfast and want a deal like everyone else.  I did pick up a rental last year in Citrus Heights.  The numbers worked and it's cash flowing.  They are out there!  If you're looking for a good income property, I can help with that. 

Below is a chart for Placer county showing the houses for sale vs sold houses and pending.  In spring we tend to have an upward tend and downward in the winter.  This is looking very typical for the housing market in our area.

If you're a first time buyer, make sure your comfortable with the payment and make sure you get a good real estate agent to help guide you so you don't end up with a lemon.  Happy to help if you have questions!

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

Top listing agent in December and 2019 Forecast

Here we are 2019 folks.  I typically have a slow down this time of year but I've been able to ride the wave and stay busy.  Overall the market is certainly doing its cyclical thing here in Sacramento and Placer county.  Good time for home buyers in my opinion.  Demand is down and we're rarely seeing multiple offers.  We've seen the Sacramento real estate market prices pull back over the last 6 months.  A small correction was in order, the year over year gains we've had since 2012 are unsustainable.  I foresee the Roseville and Rocklin real estate market picking back up come spring time so if you're a buyer, my advise is not to wait.  Get a game plan put together with an experience broker like myself and a good local lender. ( I can recommend several ).  For sellers, I think we're going to see a lot of inventory come on this year.  I think there's a number of people fed up with California and looking to take there money and run.  I already know of some investors that are looking to liquidate. 

  Even though the feds raised rates 1/4 pt last month mortgage rates took a dip.  Go figure!  Loan programs are loosening too.  This makes me a little nervous after what we went thru last time.  I understand the greed and to keep the party going; however, that just a recipe for a strong hangover.  Let me be clear though, loans aren't anything like they were back in 2006, so we're not going to repeat that same mistake.  We might see the market peak in 2019.  Too much uncertainty in our economy.  The Dow is like a ping bong ball, government is shut down and all this over a wall.

At the end of the day folks, if you can afford to buy and not be house poor, then do it.  I don't want to see you with a 50% DTI...  Under 40 is preferred!  Let me help find you a good house and negotiate a better deal. 

Placer County Real Estate - Days on Market and Sales Price/List price percentage

I always like this graph that Trend Micro puts out every month.  It's very easy to read and it give a good visual of how the real estate market is going in Sacramento and Placer county.  The green line is simply showing that sellers are having to come off their asking price around 5% to get it sold.  This is a solid indicator that the market has shifted to more of a buyers market.  Back in the spring of 2018, sellers were getting almost 100% of ask.  Some sellers were getting over asking, that's how that percentage is almost at 100%.
The orange graph is representing the days on market to sell.  I'm scratching my head a bit with these numbers because on another graph I noticed the months of inventory is at 2.7.  There's a correlation here...  We can see that the DOM has increased along with the number of houses for sale so that does make sense.
The biggest thing to take away from this is that properties are selling on average 95% of asking price. 
Prop 5 not passing is going to add to the slow down.  I was holding out hope that prop 5 would pass.  That would have helped seniors move closer to their families and bring their property tax basis with them.  I had several folks from the bay area that were counting on that; however, looks like they're not moving now.  Can't say I blame them!
If you have any real estate questions, feel free to give me a call.

Thank you,
Chad Phillips
Remax Gold
916-3901476
DRE# 01405825

reverse mortgages

I just went to a lunch and learn about reverse mortgages yesterday.  Being in the business I had a rough idea of what a reverse mortgage was and how it works, but I really didn't.  There's multiple different reverse products and some can really make sense for some folks in particular situations.   I was made aware of a new where you obtain a reverse mortgage but it becomes a credit line.  You get the going rate plus a half a point and it will compound.  The longer you wait to pull the cash the more it grows.  Very interesting, it also get the gears going for me wondering where they put that money.  They have to be putting it somewhere in order to pay the gains.  The question is out to Big Valley mortgage now. 
The traditional reverse can work for people that are looking to more financial freedom in the golden years.  If you don't have kids and not really worried about leaving an inheritance, then a reverse is perfect.  Maybe you do have kids but you have other assets that you set aside for them.  Using a reverse mortgage can be the ticket.  It's becoming more popular that I ever imagined.  The baby boomers are getting to the age and they like the bigger and better.  They're not as conservative as their parents were.  I'm skeptical of the stat, but I was told 47% of the baby boomers are moving up, not down.  I thought it would have been around 10% of boomers moving up.  Typically seniors buy down, the kids are gone, don't need as big a place anymore.  Not our boomers!  lol.  A true testament to capitalism.
If you have questions about reverse mortgages, you can get in touch with Jeff Silver 916-204-4653

Octoberfest in Roseville Real Estate update

I can't recall how long it's been since my last Placer County / Sacramento County real estate update, but I know it's been a couple months.  Just like the season changing to fall, our market has hit the breaks.  We're seeing the market shift to more of a buyers market.  Inventory is up and less buyers out and about.  Rates are along climbing so it's having a negative effect on prices too.
We have real estate investors out there that are on the fence.  As investors we want to buy when the market is low and sell high... just like stock market and there's the general consensus that the market will continue to decline.  In my opinion, yes.  I think the market will pull back more; however, I just bought a rental property last month.  When I ran the numbers, it made sense to do the deal.  I put down 25% and I'm cash flowing $500 a month.  I did also have to put in 15,000 in improvements after closing escrow, but it should be a solid property with little to no issues for me in the near future.  I needed a write off, this is also going to help me come tax time.  There are a multitude of factors that go into an informed decision to buy a rental.  Having a good realtor/broker like myself to help guide you is important.  With me you'll get my experience in construction too.  I'm not saying I'm a licensed contractor, but I've worked for a home remodeling company and I've done enough work on my own properties to know what needs to be done and what it should cost.  I also have the people to recommend to get work done too. 
Back to the market, I do think we'll see a pull back in pricing.  It's not going to be substantial, 2-5% and we've already see a portion of that.  Interest rates are going to effect what people can afford to buy in Roseville.  I have clients that are considering parts of Citrus Heights because the prices are lower compared to Roseville.  There are pros and cons, school scores, different county! 
After checking the stats we're seeing a tend that is to be expected this time of year.  A decline in sales and values are part of the normal trend, it's cyclical.  Is there more to it?  I think we dealing with both a market correction and normal trend that the market slows this time of year.  We've been going up and up since 2012.  Cannot go on forever!  At the end of the day, if you're needing a place to live and you can qualify and comfortable with the payments, buy it.  It will be better for you in the long run vs renting.  Any questions, feel free to give me a call.  Your roseville real estate agent singing off.

-Chad Phillips
Re/Max Gold
916-390-1476
DRE # 01405825

I think its about time for another real estate update.  We're at the end of summer here in 2018, the kiddos are back in school now.  What can we expect the housing prices to do in Placer county for the rest of this year and next?  It certainly seems like we're in the mist of uncertainty.  It's like we're in a holding pattern right now and more inventory keeps coming.  The market has shifted from a sellers market in the spring, to a buyers market now.  The demand is lower than the inventory.  Interest rates also have influenced buyers and investors in Roseville & Rocklin area.  Historically 5% is really good, but people got used to rates in the 3's then 4's.  I'm in escrow buying an income property and I've locked my rate at 5.25%.  The numbers work with me putting down 25%.  It's a house in citrus heights that I'll be able to cash flow $400 a month.  I couldn't think of a better place to park some cash. 
I have 5 listings on the market right now that are all priced well.  One in cirby ranch in Roseville, one in Fair Oaks, one in Rancho Cordova and a condo in Rocklin.  With several more listings coming soon we're wondering where the buyers are.  The condo shows like it's a brand new model.  3 bed 2 bath for 227,000 and we have nada.  We hope that this dip is more indicative to the time of the year because this is normal and not a precursor to a market correction that we're due for.  Your guess is as good as any.  My advise would be to buy and hold as long as the numbers make sense.  If it's for your primary then make sure you're comfortable with the payments because you might be looking to stay put for a while.    Let's not use our houses as penny banks and refi out the equity.  As you can probably guess, I'm pretty conservative, much more so than some of the investors I work with.  Until next time...  Feel free to call me with your roseville real estate needs.
Chad Phillips - Re/Max Gold
916-390-1476