Forclosures in Sacramento Homes DECLINE 29.5% in September

October 29, 2008

New Law Takes Effect; It’s Doomed!

The headline looks good but, unfortunately, it’s destined to fail just as it did in other states.  You’d think the state government would get a clue from other states on helping out homeowners if that is their aim but, alas, that isn’t to be.  For a recent article on this, see my other site, Sacramento Real Estate Views.com.

Foreclosures in California

While foreclosures declined statewide in September, California is still in one of the top spots for foreclosures at #3 falling one spot since last month at #2 with two states, Nevada and Florida, leading the way.  On one hand this isn’t good news but on another, it’s great news for investors and first time home buyers of Sacramento real estate.

The recent law enacted by the state has ensured that buyers will profit in the long term by purchasing homes in Sacramento.  With the glut of inventory coming on the market in the next couple months, values will most likely decline further making the Sacramento region one of the most affordable locations in the state if it isn’t already.

That’s one in every 189 homes in California this month receiving a foreclosure filing, down from one in every 130 homes receiving a filing in August.

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How To Shop for Investment Homes in Sacramento Real Estate

October 25, 2008

Recently, we had a property come back on the market that had been in pending sale.  I had gotten a call from an investor, let’s call him “Jerry” who was interested in the home and said to call him if it became available again.  While watching this one, it came up I called him and we met at the property.

Jerry is Running

Jerry is working with a guy with a million bucks in the bank whose throwing it at investment homes in Sacramento.  Their strategy is that Jerry goes and finds the homes for a referral fee of some sort and Mr. Moneybags buys the homes.  They fix them up and put people in them who lease option or rent.  They are in this for the long haul and that’s a sure winner.

The only problem is that poor Jerry doesn’t have access to the MLS and is depending on the deadbeat agents he calls to help him out.  What he found is that most agents won’t write offers on homes lower than list price or make no sense to him at all.  This made no sense to me.

Jerry is Calling Lazy Agents

Jerry isn’t coming in that low.  He knows that the longer a home sits, the better chance he has of scoring  a deal for Mr. Moneybags and the homes that are fresh on the market don’t often present the best opportunity.  They are coming in all cash asking nothing back from the seller but a lower price.  Sounds fair to me but he can’t find an agent to work with who will write them up for him.

Do they think it still 2004?  I hear this all the time from agents..”How much? Oh, I won’t write that.  I have a reputation to uphold/that will never get accepted/I just like not eating” whatever the excuse, these “professionals” are basically clueless.

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Deal of the Week in Sacramento Real Estate!

October 23, 2008

3260 Nordyke Drive, Sacramento

This home is 3 bedrooms, 2 baths just over 1000 square feet.  The lot size is nice and has fruit trees in the backyard.  Its a great starter home for a first time buyer or a cash flowing rental for the investor.

It’s currently priced at $87,970 which is a pretty good value for the area.  There is a potential here however to get a better deal than the list price.  For more information on this, give me a call or send an email. I make sure and get you all the information you need or meet at the home for a peek.

Thanks for watching and as always, have a great day!

For more information about Sacramento and Placer County real estate, please visit my other site at SacramentoRealEstateViews.com.

“To Flip or Not to Flip – THAT is the Question!”

October 17, 2008

While I doubt that Shakespeare invested in the Sacramento real estate market, I don’t think he’d mind my liberal use of his most remembered line from Hamlet.  (if he actually wrote it!)  Anyway, during our sales meeting yesterday, we discussed “flipping homes” with our team leader, Ian Maker, and his response was quite predictable as most of us already knew what type of purchase is “investor best” in Sacramento real estate right now.

Flipping Homes

Flipping, as probably most of you already know, is buying homes that are in need of either routine maintenance or a full on remodel, and everything in-between, getting that work done and putting the property on the market quickly and selling or “flipping” it at a profit.  Simply said, that’s what it is.

These homes are marketed and sold at prices much lower than market to make them attractive to potential investors or anyone looking to buy.  I’ve run into many of these homes in Sacramento, there are many and going to be many more in the coming months, and they present an awesome opportunity for long term gain.  Flipping, however, is highly risky right now and my belief is that only a very small percentage of homes in the Sacramento market qualify as flip possible because of the direction of the market.  That said, you’ve got to have the resources to buy these homes, quickly have a crew to do the work and get them back on the market in 60 days or less to make it worth while.

Flipping in a Depreciating Market

The reason that I say that flipping is highly risky and that very few homes in Sacramento qualify is because the market is depreciating, value is being lost rather value being gained.  While depreciation has slowed, we are still depreciating. The margins you’ve got to have to get this done are so high that you’d have to make very low offers on these to cover all costs and come out ahead.  Because there are so many long term investors and first time home buyers in the market right now and there is competition, this becomes difficult.  Long term investors have a little more latitude as, if the property positively cash flows, they can just do the minimum, improve the home over time, wait for the market to come back while earning a living on it then sell later and 1031 exchanging into something more profitable or at least different.

In fact, I would venture to say that going through normal channels to acquire homes to flip, waiting until the home hits the open market, isn’t the preferred strategy at this point.  To be successful at this, you’d have to get the home prior to anyone else seeing it.  Not many people have connections like that but it is possible.

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Deal of the Week – 79th Street, Sacramento

October 15, 2008

A GREAT Opportunity in Sacramento Real Estate

This 3 bedroom, 2 bath almost 1200 square foot home has been on the market priced at $106,900.  It has new carpeting, dual pane windows and looks like a newer water heater and air conditioning condenser.

Being that it’s been on the market for awhile, this property can be had at a MUCH lower price than what it’s currently listed for.  If you’re interested in this home and what I think it will sell for, please call me.

LowBall Time has Arrived in the Sacramento Real Estate Market

We’re seeing very low offers being accepted on homes in the region.  FORGET WHAT IT’S LISTED FOR AND LET’S WRITE IT LOW! We may just get it done and if we don’t, we’ll find something else and write that low.  We will succeed somewhere.  It almost doesn’t matter where you’re buying, investment or primary residence, new or resale, beginning with the 4th quarter, getting a good deal on Sacramento real estate just got a lot easier.

It’s the last quarter of the year, a typical slow time in real estate sales.  Listing prices will probably stay at relatively consistent levels but the offers coming in will be few and they should be LOWER THAN LIST depending on that list price.  Need some help negotiating a good deal?  Give me a call and I’ll be happy to help you too.

Enjoy the video and as always, thanks for watching!

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EXTRA, EXTRA! The Date of the Bottom of Sacramento Real Estate REVEALED!

October 14, 2008

Now that’s pretty catchy, huh?  Hype, I know, but I just read an article by Jim Cramer from “Mad Money”, the show on CNBC, written at the beginning of September saying that the bottom of the real estate market would be June 30, 2009. I wonder what time?  Can we give Jim a call on this?  Did it change over the last 2 weeks? Jim, I want to be prepared, I really do!

I’ve watched this program many times, it’s entertaining and live.  I recommend it.  But calling the date?  I thought it satire until I read it.  He makes some great points and I would have had to agree, in substance, with his assertions if it hadn’t been for the events of the last two weeks.

See, that’s the thing with predictions like this.  Life sometimes interferes.  I find it best not to make them, as much as I’d like to.

“No, really, here’s why.”

JIm cites the following ten reasons he believes this is THE date of the end of the housing downturn and my take on how it applies to our market:

1. Declines in New Home Construction

By June of next year, we won’t be building enough homes to meet demand.  I don’t know, with all of the inventory of foreclosures in the Sacramento real estate market if this is true.  I can’t disagree with it either.

Locally, construction starts are way down and there isn’t nearly the inventory there was just 8 months ago.  Pulte homes has just laid off more people and the builders are running very lean operations.

2. FHA Restructuring Loans, Reducing Foreclosures

Because of the FHA taking over some high interest rate mortgages and turning those into lower interest, fixed 30 year notes, Jim predicts a decline in foreclosures that will reduce the inventory to much lower levels creating more demand.  Hmmm….we’ll see.  A lot has changed in the last two weeks.

We’ve seen a slowdown in foreclosures but the word on the street is that there are still more to come.  As the economy falters and unemployment rises across our region, now at 7.4% I’ve heard, it may make it very hard for people to keep their homes.

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Wow! Have Home Prices Plummeted in Old Roseville!

October 12, 2008

I’m working with a buyer who is looking in the Roseville, Antelope and Carmichael areas and we ran across this one. 2900 square feet, looks to be newly renovated, at least over the last 2 years and has an income producing rental behind it over the garage in a secluded ally way.

I remember this home being on the market in 2006 as I had a listing right around the corner from it around the same time.

In 2006, this home sold for $465K.  Man.  I’m looking at it this morning with my buyers and it’s currently listed for $235K.  A $230K difference in price.  That is simply amazing to me and I’m sure, to everyone else.  It’s bank owned and that does drive the price downward but still, that’s an amazing deal.

The comparable sales within a half mile radius don’t have the income producing potential, are smaller and sell for right around the same price!

I’ll post an update after I get back from seeing it.

Looking for a great deal on a home like this? Give me a call, I’m running into these all the time.

Source: Metrolist, Inc.

90 Year Old Woman Shoots Herself, Saves Home

October 11, 2008

Before anyone gets any ideas, please understand that Capitol City Foreclosures does not recommend this strategy to anyone.  While effective in this case, it’s highly risky and may result serious injury or death.

Desperate Times, Desperate Measures

I could literally “go to town” on the banks in the current Sacramento real estate market.  What’s going on in real estate right now is by far the most crazy I’ve ever seen.  The rules have changed and the banks are running the show while failing on Wall Street.  The inmates running the asylum.

Addie Polk, 90, from Akron, Ohio, purchased a home with her husband in 1970.  Her husband passed away and Addie ran into hard times, like so many others today, and began missing payments.  Fannie Mae assumed the loan and then filed the foreclosure documents.

Sheriff’s deputies had tried, and failed, to evict Addie 30 times before.  Guess they really do have a heart in Akron!  This time, she took matters into her own hands and not seeing a way out of this, shot herself twice in the upper torso, was bleeding to death before a neighbor climbed into an upstairs window and came to her aid.  She had arranged her pocket book, car keys and life insurance policy neatly where the could be found clearly indicating that she had intended to commit suicide over losing her home.

Addie Polk is recovering, doctors said that she’ll make it fine.  Two shots in the torso at 90 years old and living to tell about it is pretty darn tough.

“The Appropriate Thing to Do”

The bright side of this is that Fannie Mae forgave the loan and lifted the foreclosure proceedings.  They thought that under the circumstances, it was the “appropriate thing to do”.  With all that’s going on out there that is completely inappropriate, I’m glad that they got this one right.  The home is now hers to live in until she no longer needs it.

A comment I saw on an Ohio.com says, “Addie Polk is to the foreclosure crisis what Rosa Parks was to the civil rights movement.”  Fantastic analogy, wish I had thought of that as it seems true for me as well.

Times are tough right now and it’s not over, not by a long shot, so far as I can see.  That said, this will end it always does.  It happened in 1929, 1987 and now again in 2008, all three in October.  What’s with October?

I found an interesting list of stock market crashes on Wikipedia.  The reasons seem to be the same.  When will we learn! :)

Stay dry out there.  If you’re thinking of buying or selling a home is Sacramento, please contact me.

Source: CNN.com

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