Sacramento Real Estate Headed for Another Crash? (Riverside, Folsom: sales, 2014)

[Logic87]

I have been looking to move to Sacramento for the past year or so and I might finally take the plunge this later this year (more specifically September though December.) However, prices have drastically increased the past year and the amount of housing available is extremely low. It almost feels like some areas are approaching levels from 2004-2008 where housing was at its highest.

Let's take a look at a few areas, it appears that areas like Land Park and East Sacramento have approached the housing booms in 2004-2008.

East Sacramento:

East Sacramento, Sacramento average and median listing prices - Trulia.com

Land Park:

Land Park, Sacramento real estate overview - Trulia.com

The issue is low interest rates (increasing demand), low supply (not sure why, maybe banks are reluctant to release all foreclosed properties) and investors buying up property and flipping them for a profit. If I do move, I think it makes financial sense to rent in these areas and wait it out a year or so to see if the housing market will cool down or if inventory increases.

What is the thoughts of the locals here? Do you see housing prices cooling down?

[caligirlz]

I wouldn't base an assessment on Trulia which is know to be inaccurate.

[Logic87]

Originally Posted by caligirlz

I wouldn't base an assessment on Trulia which is know to be inaccurate.

The information provided isn't based off of Trulia's estimated value which can be innacurrate but are based off home sales and I assume the figures are pulled off MLS.

An article posted today:

Zillow: Low inventory squeezes Sacramento home affordability | The Sacramento Bee The Sacramento Bee

[Modification Specialist]

Originally Posted by caligirlz

I wouldn't base an assessment on Trulia which is know to be inaccurate.

Dito -

Other home value check websites.

• Zillow: Real Estate, Apartments, Mortgage & Home Values in the US

• PropertyShark - Real Estate Search and Property Information

• Moderator cut: link removed, competitor site

• https://www.chase.com/mortgage/mortg...alue-estimator

• Moderator cut: link removed, competitor site

• http://www.homes.com/Home-Prices/

• Property Records Search for Homes and Real Estate - realtor.com®

• Get a free estimated home value report on your property and view recent sold properties. | Eppraisal

• Welcome to Listingbook.com

[JohnS_15]

I just bought a house in Sacramento so I hope the housing market doesn't crash!

It's tough to pick the perfect time to buy a home. Unless you are an investor looking to make a short-term profit I'd look at the long-game when it comes to home ownership. If you plan on moving in less than 5-years then it might not make sense to buy a home.

If you like the Sacramento area and want to make a home here for the long-term then it doesn't matter quite as much if you don't buy at the bottom end of the market. Of course nobody wants to buy at the top end but who ever knows when its reached that point?

The East Sacramento and Land Park neighborhoods are the most desirable places to live...a lot of competition there for limited inventory drives prices up faster and higher than other areas. There are still affordable nice neighborhoods around where you don't need to have all cash and pay way over asking price. These areas seem to be increasing at a more steady rate. If you were looking for a really great "deal" on a home then you probably missed that boat. Although there was this thread recently
North Oak Park - Is it time to move in to the neighborhood???

California has become a very difficult place to make a life as a normal middle class family. Pretty much any desirable area of the state that actually has job opportunities has high housing costs. There are too many people in the state and not enough housing or other resources. Personally I don't see the housing market taking a dive like 2008 unless something very dramatic happens. Another global economic meltdown, the drought forcing a mass exodus of businesses and agriculture, a major earthquake. It may cool off some but the demand for single-family-homes (and just any homes in some areas) is real.

[derekjones]

Nobody can tell the what the market will be like in the future and if they can they should also be giving me the winning lottery numbers.

Do I think we're headed for another crash? No. One reason the median sales price has increased is lack of inventory at the lower price points due to investors/flippers. Investors/flippers bought most of the lower price point homes (the ones first time home buyers usually buy) and will those homes out of the equation median price for an area increased. I don't know the exact number off hand but if I recall correctly Blackstone bought close to 4000 homes throughout Sacramento in the last few years and then there is all the other investors/flippers.

Not to mention, not all locations were hit as hard when the crash occurred. Some places dropped in value by a few hundred thousand while other only dripped a few tens of thousands of dollars.

But there are still homes available and we're not hurting for inventory, it really just depends on your budget and area if that is realistic or not. If you're looking for sub $300k in downtown or midtown good luck.

As far as waiting it out, make sure you're looking at the greater picture. Is it cheaper to buy a $400k home now at 3.8% interest or a $380k home at 4.8% interest?

[Logic87]

Originally Posted by JohnS_15

I just bought a house in Sacramento so I hope the housing market doesn't crash!

It's tough to pick the perfect time to buy a home. Unless you are an investor looking to make a short-term profit I'd look at the long-game when it comes to home ownership. If you plan on moving in less than 5-years then it might not make sense to buy a home.

If you like the Sacramento area and want to make a home here for the long-term then it doesn't matter quite as much if you don't buy at the bottom end of the market. Of course nobody wants to buy at the top end but who ever knows when its reached that point?

The East Sacramento and Land Park neighborhoods are the most desirable places to live...a lot of competition there for limited inventory drives prices up faster and higher than other areas. There are still affordable nice neighborhoods around where you don't need to have all cash and pay way over asking price. These areas seem to be increasing at a more steady rate. If you were looking for a really great "deal" on a home then you probably missed that boat. Although there was this thread recently
North Oak Park - Is it time to move in to the neighborhood???

California has become a very difficult place to make a life as a normal middle class family. Pretty much any desirable area of the state that actually has job opportunities has high housing costs. There are too many people in the state and not enough housing or other resources. Personally I don't see the housing market taking a dive like 2008 unless something very dramatic happens. Another global economic meltdown, the drought forcing a mass exodus of businesses and agriculture, a major earthquake. It may cool off some but the demand for single-family-homes (and just any homes in some areas) is real.

I am starting to consider areas like Oak Park, Elmhurst, Riverside but even these places are starting to rise as well. Still I feel more comfortable in areas like East Sacramento and Land Park (the latter much more so) due to schools and long term value. I feel like half of the homes I look at in the MLS are flippers. Not as many flippers in the burbs like Folsom and EDH.

My plan is to stay long term and in the very least 5-6 years. If/when I have kids then I could move out to the burbs.

Originally Posted by derekjones

Nobody can tell the what the market will be like in the future and if they can they should also be giving me the winning lottery numbers.

Do I think we're headed for another crash? No. One reason the median sales price has increased is lack of inventory at the lower price points due to investors/flippers. Investors/flippers bought most of the lower price point homes (the ones first time home buyers usually buy) and will those homes out of the equation median price for an area increased. I don't know the exact number off hand but if I recall correctly Blackstone bought close to 4000 homes throughout Sacramento in the last few years and then there is all the other investors/flippers.

Not to mention, not all locations were hit as hard when the crash occurred. Some places dropped in value by a few hundred thousand while other only dripped a few tens of thousands of dollars.

But there are still homes available and we're not hurting for inventory, it really just depends on your budget and area if that is realistic or not. If you're looking for sub $300k in downtown or midtown good luck.

As far as waiting it out, make sure you're looking at the greater picture. Is it cheaper to buy a $400k home now at 3.8% interest or a $380k home at 4.8% interest?

I'm actually hoping the interest rates do go up since I plan to put down down a substantial amount down and plan to pay off the home in 5-6 years. It's just that my budget originally was $450k max, and although some houses are selling for near that amount, these same homes could of been had for 10-20% cheaper in just 2013.

Interesting about blackstone, I have read about them and I guess it affirms my hunch investors are driving up the Sacramento market along with low interest rates and a "better" economy. I guess the recent investments in downtown are also driving up demand? But many of the homes I am looking at appear to be flippers and if (moreso when) interest rates go up then prices could stabilize and maybe we will see these players leaving the market. Along with the drought news (I know California has a long record of droughts) I think prices have to come down. But like you said, who knows.

One thing I do disagree with is inventory. Sure it has gone up from say January when real estate tends to be slow but inventory is much lower than say 3 years ago.



Although Sacramento is not the only one with low inventory.

[2sleepy]

Sacramento real estate is undervalued, I can't imagine any scenario short of collapse of the entire economy where prices would significantly drop.

[Rempong]

this bad.
http://bestuipics.gq/18/o.png

[NinaN]

3 years ago was the absolute bottom of the market so inventory was at a peak. We are in a much more normal market now, leaning a little towards a sellers market. That does not mean awful houses will sell quickly at a high price.

I am seeing the nicest houses at all price point sell quickly. It doesn't appear people are up for major cosmetic updates in this market. Those houses are selling very slowly, where in the past people Felt like they were getting a good deal to buy a fixer-upper, and do the improvement themselves.