Has Your Sacramento Home Price Increased by 30%?
In a conversation with my financial advisor yesterday, she asked if every Sacramento real estate transaction has its share of problems or if it just seems that way. She recently sold her home and bought a new home, so she’s had a little first-hand experience. The answer to that question is yes. Your agent might spare you all of the unnecessary details, but almost every real estate transaction has some glitch pop up. Part of the problems are fueled by the parties themselves: the sellers and buyers. Part is just due to the new climate: the post-Bubble real estate climate, without tossing in limited inventory and rising rates. And newspaper headlines don’t really help.
It’s not that the newspapers are wrong, it’s that people don’t read newspapers. They scan the headlines, believe they have digested the entire story and move on to other things. We live in an Attention Deficit Disorder society.
The headline in the Sacramento Bee story a few days ago was Sacramento-area home prices jump almost 30% in a year, lead 30 biggest metro regions. I read that and my stomach sank. Stomach sag is something that can happen completely out of the blue to us old people who forget that planking is our friend, but the main reason for my distress is because I know that many sellers will believe they can get one-third more for their home than they can actually get, based on that article headline. Please, listen to your Sacramento real estate agent, that article doesn’t literally apply to a Sacramento home seller. The reporter is talking about median prices for last month as compared to median prices from a year ago.
Median prices means half the homes sold for more and half of the homes sold for less. It doesn’t mean YOUR home. Every neighborhood is different. For example, we have a ton of inventory in Land Park right now. At the moment, a quick check in MLS shows 27 homes for sale in 95818 under $400,000 — which encompasses homes for sale in Land Park, Curtis Park and a few blocks north of Broadway. According to Trendgraphix, in July of last year, we ended that month with 18 homes for sale under $400K in 95818. There’s a bit of a glut right now in that price range in Land Park.
But take a look at 95757 in Elk Grove. That neighborhood is in high demand, over by I-5 / Franklin /Whitelock. Part of the demand is the schools. It’s also on the edge of construction, and many of the homes are somewhat newer, slightly more expensive than other parts of Elk Grove. A check in MLS for 95757 shows 23 homes for sale in Elk Grove under $400,000, which is a hot price point. Last year in July, Trendgraphix showed 24 homes for sale. Pressure is on this ZIPcode.
In other words, a seller will get more offers and a higher price for her under $400,000 home in that particular area of Elk Grove than she is likely to get for a similarly priced home in Land Park. Real estate is local. I sell a lot of homes in Elk Grove as an Elk Grove agent, especially in 95757, and I see it first-hand. I also specialize in Land Park because that’s where I live, and many people know I am also a Land Park agent.
As usual, the devil is in the details, and if you wonder whether your home has enough equity to sell, call a Sacramento real estate agent to get a free opinion of value. You can call Elizabeth Weintraub at 916 233 6759.
Note: Interest rates are going up. Interest rates have increased by 1% already this year and, when rates rise, real estate prices tend to take a dip.