Just when you thought it couldn’t get any more competitive…Not only is the weather warming up but the real estate market is trending hot already. You might be tempted to think it’s just a continuation of the same story from last year, but this year marks a new chapter.
Jordan had heard rumors that up north in Sacramento, there was an affordable market to invest in flips. LA was getting pretty competitive and the prices had knocked him out of the game. So he decided he’d move north with the returns on the last few flips and try his luck there. Sacramento prices were ridiculously low compared to there. Sanjiv, a Bay Area tech employee with a lot of stock options, dreamt of becoming a millionaire in real estate holdings. Investing in rentals in Sacramento could become a fun side gig as the Sacramento rental market grows more and more constrained with prices still low enough to invest in multiple units. Lois is moving from Campbell to Folsom to be near her grandchildren. She’s retiring and her money is going to go a lot further there. All believe the pot of gold is here in Gold Country.
Welcome to Sacramento where tectonic forces collide – overstimulated demand meets under-activated supply.
The winners are those Sellers with houses to sell right now. Houses that are partially to fully updated and are priced competitively garner multiple offers tipping the scale in favor of the sellers who get to selectively choose the best price and terms from hypercompetitive buyer offers. But what’s selling quickly? Updated homes especially at the entry level price bands.
Case in point, I sold my mother’s condo recently after investing in new laminate flooring and new paint, along with some new door hardware, 3 new light fixtures, kitchen cabinets professionally painted white with new door hardware got 8 offers over asking. But you can’t get greedy or go overboard where there’s no ROI (return on investment). Another condo which was completely renovated with new counters in kitchen and bathrooms that went on the market at the same time just down the street is still sitting without offers because it’s priced too high.
Updated homes with variations on a theme: homes with pools, single story homes, homes with views or no house behind them (and no road noise either), homes in good school districts, homes in East Sacramento, homes in Folsom, El Dorado Hills, Roseville, Rocklin, and Elk Grove. That’s not the end-all, be-all list though – homes that are priced right are selling anywhere here.
Year over year data shows there’s more activity earlier in the year this year with nearly 10% more houses getting into contact March of this year than last. We’re still feeling the pinch with just over a month of inventory. From April 1st to April 18th, this year there were nearly 24% more houses going into contract than last year, almost 12% sold, while only 5% new inventory came on the market. The absorption rate this year sounds like a vacuum that’s sucked in the end yarns of a throw rug – it’s whining at 93% because there’s not much left to pull in (compare that to the rest of the year at 55-85% which tends to give buyers more choice).
So if you’re thinking of selling. It’s looking to be a good year to be putting the For Sale sign up. You’re going to need a seasoned agent though because the hard work isn’t picking the best offer, it’s finding what features are going to sell your house, marketing strategically, pricing competitively, vetting Buyers, negotiating best price and terms, knowing how to ensure a low appraisal doesn’t sink your deal, timing repair responses to contingency releases, and keeping the escrow going until your payday. I’m available for a free consultation. Please call. Oh and if you need to buy a house in this local market, I’m a good scout. I’m always networking with agents to find out what’s coming on the market. Go with EXPERIENCE. Experience is what will help you with a successful move before the heat of Sacramento summers really kicks in. Enjoy the gold of summer in your new home!