Frustrated. Your thoughts on the Sacramento Real Estate Market (Elk Grove: for sale, 2013) - California (CA) - City-Data Forum

cbc2013 · 02-20-2013, 01:45 PM

Anyone trying to purchase a home right now is probably experiencing the same thing that I am; it's almost impossible unless you have cash. It's been a few months now and I am starting to be very skeptical of how much home prices has driven up. It seems artificial. Homes are selling for a lot more than what they are valued at. Banks will not approve loan if the house does not appraise. Is it even worth trying right now if you are trying to purchase with a loan?

I am almost to the point of giving up and waiting it out....

wburg · 02-20-2013, 01:57 PM

Yeah, the housing supply has kind of dried up in my neighborhood--the only places for sale less than $300,000 are a few condos. There are investors with a lot of money to spend, and borrowing is a riskier proposition than it used to be, so things aren't good for conventional home purchasers. And if you were waiting for the housing market to hit bottom, you already missed that boat.

calnbs · 02-20-2013, 02:04 PM

Yeah, my sister have been house shopping for a year. She went from picky to damn, I should have just bought that house. LOL. You just can't compete against investors and their "WE PAY CASH". The house market is on the rise and IMHO it's not going to drop anymore. Now, I don't expect it to bust out crazy like it was during the house booming years but a steady increase.

I bought my house in Elk Grove in 2010 and even then it was stiff competition. My wife and I max out all our bids and we paid for all our closing cost. Lost every single bid except this one house, an 1800 sq ft 2 story home with a pool. It was listed at $189K, we bid $197K. We were fortunate enough to get that $8K rebate back from the Fed'l Tax. The only reason I think we won was....LOL....we were probably the last one standing when it was said and done. It was a short sale and it took 4 months to get a confirmation from the banks.

u225615 · 02-20-2013, 02:17 PM

There is still new home building activity near my neighborhood. I'm thinking (not an expert by any means) most investors are focused on "preowned" homes vs new homes. So new homes may be a possibility for those tired of competing with cash buyers on short sales or foreclosures. However the locations with new home building right now are limited and/or the type of affordable home may not work out (for example, patio homes in a more upscale suburb of Sac instead of a home with a regular lot).

calnbs · 02-20-2013, 02:31 PM

Quote:

Originally Posted by u225615

There is still new home building activity near my neighborhood. I'm thinking (not an expert by any means) most investors are focused on "preowned" homes vs new homes. So new homes may be a possibility for those tired of competing with cash buyers on short sales or foreclosures. However the locations with new home building right now are limited and/or the type of affordable home may not work out (for example, patio homes in a more upscale suburb of Sac instead of a home with a regular lot).

Newer homes are a good option along with homes that is not in the process of foreclosures or short-sale. Unfortunately, for some, foreclosures or short-sale are their only option as far as budget goes...but they do have to compete against investors.

My wife and I went with short sale. It was worth every penny we saved...but yeah, it was a headache going up against investors.

Majin · 02-20-2013, 02:54 PM

The housing market in the Sacramento metro vastly over corrected on the low side, and I mean VASTLY. In 2009-2010 the housing prices dropped to ridiculous lows that never should of happened (just the same where housing prices greatly overshot in 2006). The next year or so will be another correction to the right value of housing prices.

But depending on your price range, for lower priced homes $150k or less, they have NEVER been easy to buy even in the bottom of the market. That range was always mobbed with investors buying past asking price.

terranova · 02-20-2013, 04:25 PM

Quote:

Originally Posted by cbc2013

Anyone trying to purchase a home right now is probably experiencing the same thing that I am; it's almost impossible unless you have cash. It's been a few months now and I am starting to be very skeptical of how much home prices has driven up. It seems artificial. Homes are selling for a lot more than what they are valued at. Banks will not approve loan if the house does not appraise. Is it even worth trying right now if you are trying to purchase with a loan?

I am almost to the point of giving up and waiting it out....

That begs the questions: How long will you have to wait? And what will the prices be like when the Investors with Cash frenzy has played out?

Also, If institutional investors are brining in money from people looking for a "safe" place to get monthly cash flow and likely appreciation over the long haul, along with very low interest rates, this could be a long process . . .

NinaN · 02-20-2013, 04:57 PM

It's hard in our neighborhood too. We'll see 14 offers over the weekend on a $500K house, with the sellers taking the cash offer. Our cash buyers aren't investors, they are mostly coming from the bay after selling their house for twice as much.

terranova · 02-20-2013, 05:48 PM

Looks like real estate investment trusts (with $$ millions) from foreign countries are also jumping in:

Foreign Buyers Hop on Rental Trend - WSJ.com

cbc2013 · 02-20-2013, 08:13 PM

Quote:

Originally Posted by terranova

That begs the questions: How long will you have to wait? And what will the prices be like when the Investors with Cash frenzy has played out?

Also, If institutional investors are brining in money from people looking for a "safe" place to get monthly cash flow and likely appreciation over the long haul, along with very low interest rates, this could be a long process . . .

Prices could be higher or even possibly lower later down the road. Who knows. By waiting it out i mean waiting till prices level off (if ever); supply meets demand. Waiting until homes sell at appraisal value. I have the cash for the down payment, but not the additional cash to cover difference between a competitive offer today and appraisal value. I have been keeping record of homes i looked at months ago and they pretty much sold for 5-10% over asking, give or take, most likely cash. It doesnt make sense to buy and be immediately underwater.