Is everyone in Sacramento house poor?

[WizardOfRadical]

Originally Posted by sav858

It did but that is when there was a ton of foreclosures, a lot more inventory, and lower prices. That was more during the bust than the boom part of the cycle.

Exactly. And a big problem for Sac was the forclosures were scooped up by flippers and investors putting 50%down or all cash. It wasn't really new home owners scooping up propererties.

All of this is why homeowner ship rates are lowest they have been in several generations. It's not a healthy organic market like it was even 30 years ago.

As far as actual owners, I would say most are house rich. As in their equity essentially defines their net worth.

[Ultrarunner]

I think homeownership peaked during the Bush Administration?

Values in terms of prices sure took a hit in my part of California 2008-12 and have rebounded and more.

One home I had been following built in the late 50's sold foreclosure in 2009 for 375k... it is now marked pending with a list price for 995k and will be very interesting to see what it sells for.

A retired contractor bought it... refinished the floor and cabinets, put on a new roof and poured the driveway (regular concrete for 2 car)... and of course paint in and out while he lived there the last 6 years.

He either got a buy of the decade or prices have really changed.

[sav858]

Originally Posted by WizardOfRadical

Exactly. And a big problem for Sac was the forclosures were scooped up by flippers and investors putting 50%down or all cash. It wasn't really new home owners scooping up propererties.

All of this is why homeowner ship rates are lowest they have been in several generations. It's not a healthy organic market like it was even 30 years ago.

As far as actual owners, I would say most are house rich. As in their equity essentially defines their net worth.

That wasn't during the "boom" though, that was my point.

[WizardOfRadical]

Originally Posted by sav858

That wasn't during the "boom" though, that was my point.

And I get that, but that does not change the fact that the Sacramento RE market is driven by speculation and flipping. It's not driven by consumers looking to own and live in the homes.

[2sleepy]

Originally Posted by WizardOfRadical

And I get that, but that does not change the fact that the Sacramento RE market is driven by speculation and flipping. It's not driven by consumers looking to own and live in the homes.

I disagree, that might have been the case in 2012, 2013 but not now. Rent isn't high enough to draw in that many investors and the market isn't moving fast enough to attract flippers

RealtyTrac: Investors Flipping Fewer Sacramento Area Homes - capradio.org

[b.hughes]

Originally Posted by WizardOfRadical

And I get that, but that does not change the fact that the Sacramento RE market is driven by speculation and flipping. It's not driven by consumers looking to own and live in the homes.

This is pretty outdated - some periods between 2005 and 2013 this was true but isn't true anymore. Im guessing you're not involved in real estate in the area?

Inventory is too low for either of these activities to be rampant and the traditional ratios that work in the favor of investors are not advantageous enough when compared to other areas. Yes flippers and investors are still part of the market but most have been out for at least a few years now. The overwhelming majority of homes are bought with conventional financing and have been for a couple years now.

Right now the defining force of the Sacramento real estate market is people from the bay area looking for homes who have been priced out plus people looking to move to California without the extreme cost of the coastal cities.

I'd also say that over the past 4 years or so WAY more speculative buying has been in the bay area markets than in Sacramento.

[WizardOfRadical]

Originally Posted by b.hughes

This is pretty outdated - some periods between 2005 and 2013 this was true but isn't true anymore. Im guessing you're not involved in real estate in the area?

Inventory is too low for either of these activities to be rampant and the traditional ratios that work in the favor of investors are not advantageous enough when compared to other areas. Yes flippers and investors are still part of the market but most have been out for at least a few years now. The overwhelming majority of homes are bought with conventional financing and have been for a couple years now.

Right now the defining force of the Sacramento real estate market is people from the bay area looking for homes who have been priced out plus people looking to move to California without the extreme cost of the coastal cities.

I'd also say that over the past 4 years or so WAY more speculative buying has been in the bay area markets than in Sacramento.

Just because activity has slown down, does not change the fact that the RE market in CA is based off investor speculation. It simply means activity has slowed down. And that is due to lack of supply, decreased appreciation, and decreased amount of first time buyers who can no longer afford to buy.

In an RE market where the median home price is unaffordable to those making the median income, the more likey it is because of competition from investment speculators.

Sac RE market has been dictated by how much bay area investor class wants to pay. They increase competition that otherwise wouldn't be there, have more financial means, and that drives up prices.

It's definately Jr Varsity when compared to the Bay market. Same problem, just not as dramatic and less complex than what you find on the coast.

[Ultrarunner]

People still buy homes because they need somewhere to live...

A co-worker just closed on a home in Fairfield... she has wanted to own her own home forever.... last year she married and they just celebrated Christmas in their new home... both had been renting in apartments.

She wanted a yard for a vegetable garden and fruit trees... he wanted room for his woodworking tools....