Some 2005 Sacramento Home Buyers Are Still Underwater
Do you believe some 2005 Sacramento home buyers are still underwater? By that I mean they cannot sell the home for the amount they paid in 2005. Not that they need to do a short sale. Although in some instances, it can be pretty close to not being able to pay all the closing costs and mortgage, most of these sellers can squeak by. They just don’t make any money on their investment.
You might wonder how does this happen? How is it possible that 2005 Sacramento home buyers are still underwater when we’ve had such great appreciation? One of the ways this can happen is to pay too much at the time of sale. Another way this can happen is the sales price at the time of sale did not reflect the way buyers look at homes today.
Many 2005 sales were sold strictly AS IS and home buyers, in the heat of the market frenzy, bought homes without inspections, waived appraisals and overlooked remedying expensive pest reports. Which, of course, is not happening today. In today’s market, not only will buyers refuse to waive or ignore these reports, but they will hit the sales price too. On top of refusing to buy a home without updates.
Welcome to 2019 Sacramento real estate.
One of my former sellers bought a home at the height of the market. Suspecting they paid too much at inception, I pulled the comps within 3 months of his closing and presented the findings. The findings suggested he paid $50K too much, based on the comparable sales. But they also lost about $100K due to the condition the home, by which today’s buyers judge and reject.
Another potential seller is very tight on her equity in Natomas. She cannot sell for the amount she paid, but at least she won’t have to pitch in any money to close escrow. Just when we think that 14 years ago should have been enough time to recoup our investments, it’s important to note that notion does not hold true for everybody.
Because some 2005 home buyers are still underwater today. In case you think appraisals will save some of these situations, it most likely will not. Not every neighborhood features cookie cutter homes. Those with unique homes are generally hurt the most because it’s easy to pay too much in these areas. Which is why you need a specialist.