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But at the same time I have been told by more than one realtor that the investors who purchased these units at the bottom of the market in 2010 are now only willing to lease them until stadium's construction is complete so they can gauge the market.
Burg, in this case I do believe them. The prices of the same units I looked at prior to the stadium are now up to $100K more. Now of course part of this is due to the market rebounding. But at the same time I have been told by more than one realtor that the investors who purchased these units at the bottom of the market in 2010 are now only willing to lease them until stadium's construction is complete so they can gauge the market. In fact, many owners in some of the downtown high-rises are requiring 1.5 yr long leases min. They know that everyone wants to get in on the downtown market right now and they have renters over a barrel. Unless you want to shell out the money now and you are lucky enough to beat the others in line, you have to sign a long term lease and attempt to structure an option to buy for as much as $500K for a unit built in the 1980's. Logically speaking, who was going to pay that prior to the stadium to live near downtown Sacramento, in an older unit no less? There really wasn't any reason middle class people wanted to live there before. Now people are lining up not only to live but more importantly, to treat their condo/home as an investment.
In 2009 there was quite a bit of inventory under $100k in Sacramento. Now there isn't. That has nothing to do with the arena. It has to do with the fact that between Q4 2010 and Q4 2013 Sacramento real estate went up in price by 30%. If everything appreciated evenly, and it doesn't as the low end is always more volatile, your $90,000 condo in 2010 would have been $112,000 at the end of 2013.
In 2009 there was quite a bit of inventory under $100k in Sacramento. Now there isn't. That has nothing to do with the arena. It has to do with the fact that between Q4 2010 and Q4 2013 Sacramento real estate went up in price by 30%. If everything appreciated evenly, and it doesn't as the low end is always more volatile, your $90,000 condo in 2010 would have been $112,000 at the end of 2013.
Jesus Christ dude the people that OWN the units have told me that they are waiting to see what the market does after the Stadium is built. As have other realtors who represent some of them. What part of that is so hard for you to understand? Do you think they are lying because they secretly have supported the stadium? Use some common sense.
Jesus Christ dude the people that OWN the units have told me that they are waiting to see what the market does after the Stadium is built. As have other realtors who represent some of them. What part of that is so hard for you to understand? Do you think they are lying because they secretly have supported the stadium? Use some common sense.
That real estate in the past few years is up by about 30-35%. If the condos they own were worth $300k now and are worth $400k now, it has nothing to do with the arena. Simple. Nothing against speculating against future gains above and beyond what occurred previously in the market at large, unless you're really dumb enough to think speculation about an arena had anything to do with the ~35% gain in the market from 2010 to 2013 for the entire Sacramento arena.
That real estate in the past few years is up by about 30-35%. If the condos they own were worth $300k now and are worth $400k now, it has nothing to do with the arena. Simple. Nothing against speculating against future gains above and beyond what occurred previously in the market at large, unless you're really dumb enough to think speculation about an arena had anything to do with the ~35% gain in the market from 2010 to 2013 for the entire Sacramento arena.
As has been posted here before, downtown Sacramento will take off when there's more housing aimed at middle aged empty nesters that's not above $400K... what we need are more condos and apartments priced in the $150-$200K range... and when we have more food shopping downtown and in Midtown. If that Whole Foods deal actually happens, things could get more interesting in the housing market. What will happen is a lot more gentrification of Midtown than what currently exists. I can see tear downs of those ugly 4-8-10 complexes that were what - built in the 1960s/70s - to be replaced with higher rise luxury apartments or renovations like the Elan at 25th and H - units in there are going for above $1000 a month. Downtown is still highly reachable from there by bike, foot, or Uber if you are wasted...
As has been posted here before, downtown Sacramento will take off when there's more housing aimed at middle aged empty nesters that's not above $400K... what we need are more condos and apartments priced in the $150-$200K range... and when we have more food shopping downtown and in Midtown. If that Whole Foods deal actually happens, things could get more interesting in the housing market. What will happen is a lot more gentrification of Midtown than what currently exists. I can see tear downs of those ugly 4-8-10 complexes that were what - built in the 1960s/70s - to be replaced with higher rise luxury apartments or renovations like the Elan at 25th and H - units in there are going for above $1000 a month. Downtown is still highly reachable from there by bike, foot, or Uber if you are wasted...
High-rise units aren't going to sell for $150-200k. That's about what you'll get in Natomas for a pretty decent condo. That was a cornfield, much cheaper to purchase than the 10-plex. Then high-rise construction is more expensive than low-rise. High $200k for mid-rise might be possible. Alexan (LINQ) sold for mid $250k/unit. L Lofts starts around $300k.
That real estate in the past few years is up by about 30-35%. If the condos they own were worth $300k now and are worth $400k now, it has nothing to do with the arena. Simple. Nothing against speculating against future gains above and beyond what occurred previously in the market at large, unless you're really dumb enough to think speculation about an arena had anything to do with the ~35% gain in the market from 2010 to 2013 for the entire Sacramento arena.
You are missing the point. The market overvalued units during its peak and of course undervalued them after the collapse. The "true" market value for most of these units is somewhere in the middle. And that middle was nowhere near $400-500K prior to the stadium's approval. Yes, units have appreciated since their bottom in 2010. But the units I was looking at were only selling for $180-200K at that time and they were purchased by investors with all cash. They are now going as high as $400K. If you are asserting that these units have experienced 100% rate of appreciation due solely to a modest rebound in the market (and some improvements) I have no idea what to say
You are just not understanding what is going on here. Or you are drying it. I tend to lean towards the latter, because everyone knows the midtown market was not supporting $400-500K for a one bedroom condo built in the 1980's prior to this stadium.
At this point I guess we'll just agree to disagree.
If the new recently-constructed housing in Midtown priced in the $400K range wasn't selling, then one might make the case that prices have to be lower. But from what I'm seeing, new for-sale housing in the grid and nearby is selling like hotcakes, primarily the small infill houses at places like 25th & R, or other previously-stalled projects like Tapestri Square, whose largest units sell for more like $800K for a 2500+ sf three-story building, basically the same price point they had during the boom. It's a mile or more from the stadium site so I'm not sure how much effect that has on the price point.
Similarly, in the rental market, new apartments renting for $1500-2500 a month are filling up quickly. Old 1950s apartment buildings are being refurbished and jacking up their rents--others are jacking up their rents but not being refurbished, just not as much, but vacancy rates are still quite low. But if you hunt around you can still find $600-800 studios and 1-bedrooms in Midtown.
If someone can figure out how to sell condos for $180-200K in Midtown, they would sell like hotcakes, because the demand is very high, and unless there was some sort of price control on them, the price would start to rise immediately as units sold and were resold. I can't see it happening in a steel high-rise, but maybe for a smaller apartment in one of the more recent "concrete ground floor/wooden upper floor) midrises that have popped up recently on the grid. Part of the key to making those units affordable is disengaging parking from the rental or condo: you buy a place to live, and find parking separately in a nearby garage, or market to those who don't feel owning a car is necessary. That saves 'em the $25-50K or so it costs to build a dedicated parking space in a garage structure. If you work and live downtown, not having a car saves a whole lot of money, allowing some of that money to be spent on housing. But, of course, it doesn't mean never having access to automobiles, with modern options like Zipcar available on demand.
One trend that started during the last boom, that I expect to restart, is older apartment buildings going condo. It happened in at least one of the ugly old 1950s apartment complexes, but it was also done in at least one older circa-1910 apartment building (the ones that look like single-family homes but are actually 4-8 apartments in a single building.) Midtown, for the most part, isn't zoned for high-rises, so I wouldn't expect to see towers built in place of those Mansard-roofed fourplexes, but we're already seeing ~3 story condo/apartment infill units going in on old vacant lots. I'm hoping that a lot more of the new infill (or old apartments) starts becoming for-sale housing instead of rental, because one of the long-term problems of the central city (at least since the 1950s) is the dramatically low level of homeownership in the central city--10% as opposed to more like 60% citywide, or 80-90%+ in adjacent neighborhoods like Land Park and Curtis Park.
You are missing the point. The market overvalued units during its peak and of course undervalued them after the collapse. The "true" market value for most of these units is somewhere in the middle. And that middle was nowhere near $400-500K prior to the stadium's approval. Yes, units have appreciated since their bottom in 2010. But the units I was looking at were only selling for $180-200K at that time and they were purchased by investors with all cash. They are now going as high as $400K. If you are asserting that these units have experienced 100% rate of appreciation due solely to a modest rebound in the market (and some improvements) I have no idea what to say
You are just not understanding what is going on here. Or you are drying it. I tend to lean towards the latter, because everyone knows the midtown market was not supporting $400-500K for a one bedroom condo built in the 1980's prior to this stadium.
At this point I guess we'll just agree to disagree.
And it really isn't today.
Show me these 1bd Midtown comps built in the 1980s that are selling for $400k. Fact: They don't exist. L Lofts is selling in the high 300k range and up and not moving units very quickly. The only thing selling for that price range that's not new construction is perhaps 500 N, but that's not for a 1bd. The most expensive 1bd condo in Sacramento, excluding L Lofts, on the market is under $200k. Given, it's the only 1bd condo in the grid on MLS aside from L Lofts at the moment right now. Look at recent sales you'll find plenty (mostly 2bds) in the $250-350k range. If you've watched 500 N, yes, many of those units had, in fact, appreciated by close to 100%. Given that's fairly unique. A lot of people were bailing out of a failing condo association that's now recovered.
The market is definitely hotter. L Lofts they've specifically said the arena is a factor in it their decision to convert units back to condo from rental.
Show me these 1bd Midtown comps built in the 1980s that are selling for $400k. Fact: They don't exist. L Lofts is selling in the high 300k range and up and not moving units very quickly. The only thing selling for that price range that's not new construction is perhaps 500 N, but that's not for a 1bd. The most expensive 1bd condo in Sacramento, excluding L Lofts, on the market is under $200k. Given, it's the only 1bd condo in the grid on MLS aside from L Lofts at the moment right now. Look at recent sales you'll find plenty (mostly 2bds) in the $250-350k range. If you've watched 500 N, yes, many of those units had, in fact, appreciated by close to 100%. Given that's fairly unique. A lot of people were bailing out of a failing condo association that's now recovered.
The market is definitely hotter. L Lofts they've specifically said the arena is a factor in it their decision to convert units back to condo from rental.
Sorry but you are way, way off. I looked at a 600+ ft studio on P that was asking $220K and a 950+ Sq/ft condo around 21st and I that went for around $330K. Both of these units were older, built in the 80's. The unit I referenced in the post that you are responding to (and others) were in fact at 500N. When I asked about purchasing an option to buy, the realtor explained to me that that is about the only way I'd have a shot to purchase, and I'd have to sign a long term lease of 1.5+ yrs just to get the option. He explained that more than a dozen separate investors had purchased these units at the bottom of the market and were not going to release any of them for sale until after the stadium had opened. His exact words were, "You are trying to jump in now before the stadium opens like everyone else. Why should they sell to you now?" So if you feel this strongly about it, maybe you should argue with the people that own these properties. LOL if you can convince them your theories are correct, maybe they'll sell me a condo.
I get that your schtick is to argue anything posted about this stadium, but I am a bit tired of debating concepts that are a no brainer for most people. Regardless of how you feel about the stadium, it is going to be a major center for entertainment and it's going to bring in a lot of foot traffic and small business. At the every least you should admit that. It doesn't take a market genius to understand that that is going to increase the value of neighboring residential properties. This is the same effect that the realtor explained to me when I inquired about the place on I ST, as she said the anticipation of the Whole Foods Market on 21st a couple blocks away had increased the asking price of the unit.
Debate finished for me on this.
Last edited by sacite; 01-01-2015 at 08:42 PM..
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