Timing the Micro Housing Markets in Natomas Sacramento
There are a few neighborhoods in Natomas that comprise such a high percentage of rental homes that the unbalanced situation is negatively affecting property values. Home buyers relocate to Natomas because they want that close-to-downtown urban commute but they also want the suburban lifestyle offered in part by other homeowners who live nearby and who are just like them. If they wanted to live near tenants, they’d live downtown Sacramento or in Midtown. No matter how you cut it, if your street begins to dip toward more tenant-occupied homes than owner-occupied homes, your property values will undoubtedly suffer.
Landlords for a home in Natomas called last fall to ask about listing their rental. It’s a home that had been underwater for years, and they, like many people, did not want to do a short sale. Luckily for them, they were not so far under that they could not rebuild equity, unlike others. Further, the comparable sales in that neighborhood supported higher values, high enough that they could have sold, paid all expenses and probably pocketed $20,000 or so. But, they decided to wait.
Fast forward to this year, with far less inventory and fewer sales, which resulted in fewer comparable sales. This is a disappointing situation for those who try to time the market. I have sold a lot of homes in Natomas and, in particular, in this certain neighborhood. One of those homes, in fact, was an identical model to my client’s home. Same square footage and located a block away. That other home was filmed in 2009 for a House Hunter’s episode because it had been sold as a Sacramento short sale, and I used it as one of the 3 homes my buyers chose when I appeared on that HGTV show.
The sellers struggled with the value I presented. It wasn’t as high as the value from last fall, but the housing markets in Natomas and for that neighborhood had changed. The comparable sales did not support that higher price. The strategy I suggested was to list it under a certain price point and let buyers bid it up by a few thousand over that particular price point, and it worked. Market demand dictates price. We sold the home. Yet, I got the feeling that the sellers had wished for a better turnout, a better return.
They sold the home for slightly more than they paid for it 8 years ago, and they made a few thousand in profit. That’s better than a poke in the eye with a stick, don’t you think?
It’s really difficult to time the real estate market. I monitor the housing markets in Natomas day-in and day-out, and I would not try to time the market, even though my finger is on the pulse. I sense the lesson of this particular situation is when the price is right for you, jump on it and put that home on the market. Don’t always try to push that envelope by waiting to squeeze a bit more because it might backfire.