Good forecast for Sac area home appreciation in 2016

[caligirlz]

Originally Posted by calnbs

My brother and I watched patiently and when we felt the market have bottom out, we purchased in 2010. It was great for those who waited. Better for those who bought prior to the rise and sold it at the top and continue renting until 2010. Those people really cashed in.

I bought at the bottom as well. Sold at the top in 2005.
I hated renting.
I remember after I sold and had moved to Sacramento, I was following the The Housing Bubble Blog , and all those people were bitching and moaning about how home-ownership wasn't desirable. Makes sense as the price was rising. They'd harass anyone who took the plunge, "took the knife" as they'd say.....and today, many are still sitting on the sidelines. Even some people in the local Folsom forum questioned my buying again (while they were happily in their "owned" homes). And those people aren't active in the forum any longer.

Many of the financial "experts" are still predicting a huge economic collapse, so I may lose all eventually anyways. For now, I'm happy I bought.

Seriously, if you want/find a house that you can afford, the desired location, buy it if you want to. Or not. Do whatever makes you happy.

[calnbs]

Originally Posted by 2sleepy

Yep, and my husband and I made the same mistake in 2011 when we knew that when DH retired we would be moving to Sacramento, we looked at houses for $150-$200k and intuitively knew that they would never be that cheap again, but we weren't going to retire until 2014 so we would have had to rent the house out for three years, so we foolishly waited, bought in Oct 2014 and those 150k homes were selling for 280-310 ugh. In retrospect we would have been way ahead of the game if we had bought two of those homes, rented them both out, then when we retired moved into one and kept the other as an investment

I believe sister jumped in the market in 2011-2012 but she had limited income as her husband quit his job to take care of the kids. Both made the same amount except she have healthcare and he didn't. One had to quit. My sister was too picky and refused to settle, despite her limited budget. The market kept rising and now, she can no longer afford those homes she once refused to bid.

[DougStark]

I still think the Sac metro area is very underrated and worth the real estate prices. The snobs on the CA coast may disagree with this statement, but that's my opinion.

I've been working with some realtors in your area recently. One thing I'm blown away by is the huge lots you have there (Carmichael, Fair Oaks, CH.)

[WizardOfRadical]

Problem is too many people look at RE in short term gains. That's fine if you are a specuflipper. But otherwise you need to think in terms of a retirement portfolio. Chances are if you hold out for 20 or 30 years you are going to come out ahead. At the very least it is a great hedge against inflation too.

I always wonder about all the people who did "strategic foreclosures". Ie the people that could have stayed in their homes but walked away because they could not stomach the thought of being under water on their homes.

In the upscale parts of the Sac (East Sac, Land Park,Curtis Park) home values are getting to 2005 peak levels. Some times beyond.

[borninsac]

Originally Posted by WizardOfRadical

Problem is too many people look at RE in short term gains. That's fine if you are a specuflipper. But otherwise you need to think in terms of a retirement portfolio. Chances are if you hold out for 20 or 30 years you are going to come out ahead. At the very least it is a great hedge against inflation too.

I always wonder about all the people who did "strategic foreclosures". Ie the people that could have stayed in their homes but walked away because they could not stomach the thought of being under water on their homes.

In the upscale parts of the Sac (East Sac, Land Park,Curtis Park) home values are getting to 2005 peak levels. Some times beyond.

Agree with your long-term horizon and here in California, the benefit of Proposition 13 on property taxes makes a good real estate investment held for the long-term like a good bottle of aged wine. Despite the real estate crash, many who held residential rental real estate did not lose much rental income and the foreclosure "crisis" actually created some quality tenants who had walked from their upside down properties and needed a good rental situation for several years until they turned their credit around. So what if your rental property value dropped 25 percent if it didn't impact your net rental income. Can't go wrong in a long-term hold but location, location still is required for a good outcome.

[shelato]

Sacramento is nice but unlike Coastal California, there are are a lot fewer constraints on new construction. During the housing bust, housing prices fell in the Sacramento region below replacement costs. While housing prices have risen recently, they still haven't spiked high enough to stimulate a lot of new construction. Which is part of why housing prices are still going up, but at a certain price point, it starts making sense for the big builders to start doing much bigger housing projects and when that occurs that new housing supply tends to limit housing appreciation. If I had to guess right now, I would say low unemployment rates combined with low interest rates mean continued housing appreciation for probably the next several years until we find ourselves in the next recession.

[WizardOfRadical]

Building is starting to gear up too. Developers try to build as much at peak market as possible.

All over the Sac metro development is starting to gear up. Not at the rate of the last boom which is probably good. And so much infill going on in the grid.

[DougStark]

Good points to consider, thanks.

As an potential investor in your Sac market, maybe it would be easier for me to take my chances on the stock market instead of a rental property in in Sac to make a return on my money. I know that there are lots of people that make informed decisions on this type of issue- I'm a newbie for investment properties and return on investment.