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My Welcome to East Sac blog has moved. The new blog now has the feature to easily subscribe by Email or RSS Feed.

I hope to see you over there.


Nathan

New Website Coming Soon!

I am in the process of doing a huge update to my website and blog!

My blog still contain all sorts of great information of news and events in and around East Sac as well as updates on the real estate market. The format will be a bit more dynamic and located as a page within my full real estate website  You can still reach it by going to www.WelcomeToEastSacramento.com or by going through the primary website at http://WelcomeToEastSac.com/blog/.

I've also made great changes to my real estate website and now have it located at www.WelcomeToEastSac.com. The website has greatly improved search features including an improved Map Search, a detailed Advanced Search, the ability to search by Address, MLS number and even preset searches for some of my favorite neighborhoods like East Sac, Land Park, Sierra & Arden Oaks, Curtis Park, River Park, Elmhurst and Midtown / Downtown.

I've also been able to upload many of my past client thank you notes and referral letters in a Testimonial section. Turns out that I had over 50 great letters, notes, comment cards and Yelp reviews to post to the new website!

The new website even has a great way of sharing my Referral Network great companies that I have worked with and would recommend to my friends.

With the launch of my new website will come a new email address. While Nathan@East-Sac.com will still get to me, I'm switching over to Nathan@WelcomeToEastSac.com to have a cohesive brand (and so I don't have to explain the "dash" between East and Sac every time I give out my email over the phone).

I'm really excited about the new site and blog. I hope that you like it too!

Knob and Tube Wiring and Appliances

I am getting very close to helping a neighbor buy a house that I once lived in when I first moved back to California. It is a great older home in East Sac, on one of the friendliest blocks you could ever want.

The lender called me with the concern from the insurance company that the house still has knob and tube wiring. The lenders concern was that modern appliances shouldn't be run on knob and tube wiring and they wanted to know if the whole house is knob and tube.

I looked at the inspection report and the pictures of the electrical panel all opened up by the inspector. Sure enough, there is plenty of new wiring connectors in there. Looking at the pictures in the crawl space there is a mix of knob and tube as well as new wiring. When I asked my favorite home inspector what he remembered of this job from two weeks ago and if the wiring was updated for the appliances, he made a comment about the fact that most appliances weren't around when knob and tube wiring was around.

This got me thinking and I did a bit of digging on the internet. Apparently knob and tube wiring was popular from the 1880's through the 1930's and into the early 1940's.

The next search turned up that the first hand powered dishwasher was invented in 1887 but the first domestic dishwasher didn't come about until 1926 and they didn't gain main stream use until the 1950's.

The first clothes washing machine goes back to 1752 and the first electric one was advertised in 1904. Demand for the electric washing machine really started picking up in the 1940's and by the 50's they were very popular.

Electric stoves were first patented in 1892 but were just a novelty until after the 1930's since electricity prices were so high and other fuel was more affordable.

While there is some overlap of the use of knob and tube wiring and some of our main electrical appliance, the majority of American homes probably never had knob and tube wiring run to these appliances.


What did I learn from this hour long trip down the historical rabbit hole of wiring and appliance? That I'm very lucky to have been born when I was and to have always lived with these great luxuries! Sure, when I was a kid we didn't have cell phones and console games were things like Pong and Tank. Kids these days have no idea how good they have it, but then again, neither did I when I was their age (but I didn't have the internet to look up how good I had it).

St. Jude Fundraiser

My wife and I are going to be hosting a block party BBQ and fundraiser. While I can’t make the invitation open to everyone who reads my blog, I wanted to share what we are doing and hopefully inspire others to connect with their neighbors and/or give to a good cause. 

This fundraiser is in honor of our next door neighbor, Mike Keating, who lost the battle against cancer on February 8, 2014. While he was an East Sac resident living on the same block for over 35 years, we only knew him for the 9 months that we lived next door to him. In that time he touched our lives deeply. We will miss him and he will be in our hearts forever more. 

He loved kids so we thought St. Jude's would be a wonderful organization to do a fundraiser in his honor. St. Jude's focuses on treatments for childhood cancer and other catastrophic diseases. You can learn more about them at www.stjude.org.

If you had the honor of knowing Mike or ever enjoyed a Murder Burger in Davis (he was an owner at one time) and would like to make a donation in his name or if you just want to give to a great cause, you can do so at www.stjudeevents.org/sherman.

As the weather turns to spring and everyone starts to get outside more, I encourage you to get to know your neighbors, pull the BBQ into the front yard, share some wine and beer and hang out with the amazing people that make up our community. Then make a habit of it! 

How is the Market Doing?

I’m often asked how the market is doing. While each neighborhood has its own microeconomics that affects it, these are the numbers for the greater Sacramento area and it should give you a good idea of where the market is.

Back in August of 2005 the Median Selling price was way up at $392,750 and then it went all the way back down to $160,000 by January 2012.

(Click on the Chart to Enlarge It)

During the height of the market we saw 2,325 escrows close in the month of June 2004 and at the slowest point we only had 707 close during September 2007. Now we are back to a much more reasonable level of transactions per month.

(Click on the Chart to Enlarge It)

2002 and 2003 inventory was low and the prices increased greatly. In 2006 prices started falling and inventory rose to record levels in 2007. By the end of 2011 inventory has dropped to a very low level and by 2013 to historically low levels. This combined with relatively low prices and very low interest rates has made it a competitive market…

(Click on the Chart to Enlarge It)

(August 2007 and again in January 2010 SAR adjusted to better reflect short sales and bank owned properties on the market).

The Months of Inventory is a reflection of how many houses are for sale and how many are being purchased each month and how long would it take for them all to sell at the current rate. Not surprisingly, the lowest Month of Inventory had been April 2003 and the highest was September 2007. 4 months of inventory is a balanced level with numbers lower than that being considered a sellers market and anything above that being a buyers market. We have been in a new historical low since early 2012!

(Click on the Chart to Enlarge It)

 So what does all of this mean? It means that the market was at a crazy low inventory for over a year, interest rates were at a historical low level and demand finally came back when everyone realized that the bottom of the market had passed. Prices have come up off the bottom, the frenzy has calmed and the years of pent up demand is somewhat satisfied. Sellers can't assume a quick sale and a higher price than their neighbor just got. Buyers aren't going up agains multiple offers on every property and agents are able to breath a little easier as we return to a more "normal" supply and demand.

The market has changed, again. Who knows what winter and spring will bring, but I can tell you I'm happy that I don't have to give my buyers the "multiple offer competition is the norm" prep talk at the start of a search. Now I have to give my sellers the "don't expect your home to sell in two weeks" prep talk instead…

At least it is never a dull job!

How NOT to stage your home for sale!

OK, I toured a great house today. It is in a good location, it has been well updated, I even liked the layout and the landscaping. Even the price is right, so it has so much going for it.

Some of the art in the house was very cool and some of it was rather odd.

There was a couple pieces of art that were a little bit distracting, but there was one that just made me stop in my tracks. 

This sums up the “How NOT to Stage Your Home”. Don’t have art that might put a buyer off or art that is so distracting so the clients remember the art instead of the house, and remember to put the toilet seat lid down, especially if it looks like this!

Zillow, Zestimates, Love and Hate

I love Zillow and I hate Zillow.

I love Zillow. I've loved it since I first discovered it a decade ago. My love of zilliow is for it's compilation of information in a mapped source. I can pull up the app on my phone and zoom in on a house across the street from a listing and be able to tell my clients the lot size and square footage of their neighbors. I will probably be able to see what it last sold for as well.

I hate Zillow. I hate how inaccurate the price opinion is in Zillow, what they call a “Zestimate”. They can't give an accurate estimation of price just by averaging similar sized home sales close by. This doesn't take into account upgrades, lot size and most importantly, location, location, location! East Sac can have a huge price change in just one block. Compare the sales in the Fab 40's to any sale just one block outside of those boundaries. Some streets are quite with a full canopy of trees and the next street over could be a high pass through street with very little curb appeal.

When a home owner tries to use Zillow to get an estimate of value on their house, they could be greatly off.

Zillow recently published a very interesting article about the accuracy of their Zestimate numbers. Looking at Sacramento, they proudly state that 24.4% of the time their estimate is withing 5% of the actual sales price of any give home that sells. Without going into how much being 5% off on the price can cost a seller, let's look at the rest of their numbers.

When you increase the margin of error up to 10% they hit that 47.1% of the time. This means that less than half of the Zestimate numbers for Sacramento properties are within 10% of the actual value of the home. 74.8% of the time they are within at least 20% plus or minus the actual sales value of a home.

Wait, this means that the other 25.2% of the time they are off by more that 20% of the actual value of the home! I don't like those odds at all.

As much as I love Zillow for the easy access it gives to a variety of information, I hate the false sense of accuracy the Zestimate gives buyers and sellers.

Nothing can replace the accuracy of an experienced agent working the neighborhood and knowing the value of each given block and why the comps in the neighborhood might be better or worse than any give home.  

Catching Up on the Blog

OK, here I go again, realizing that my blog has suffered while my work has had a wonderful Spring bloom.

Time to start catching up, again....

This time I am making a plan on I'm going to stick to it! Regular blog updates of work, play and East Sac events.  

Shadow Inventory

I don’t usually post about new articles that I see, but this one was very good and relevant to so many conversations that I’ve had recently.

The article is titled “Now You See It, Now You Don’t” and it is about the “shadow inventory” and the market condition.

Anyone that works in the real estate industry knows that right now we have very low inventory and lots of interested buyers. Sacramento currently has 0.8 months of inventory on the market.

The Months of Inventory is a reflection of how many houses are for sale and how many are being purchased each month and how long would it take for them all to sell at the current rate. The lowest Month of Inventory durring the boom was April 2003 and the highest inventory in the bust was September 2007. 4 months of inventory is a very balanced level with numbers lower than that being considered a sellers market and anything above that being a buyers market. Now we have seen several months in a row with inventory levels lower than 2.0 and even below 1.0!

What is the reason for this? Are the banks holding onto a lot of shadow inventory, covering the carrying costs, keeping the non-performing assets on their books (or just doctoring them so they don’t show up) and waiting for/manipulating the market to improve before selling them? Do they have hundreds of thousands of houses that they have foreclosed on and are going to dump them on the market when prices come up?

While I love a good conspiracy theory, I also believe that the simplest explanation with the least assumptions is often the best (a version of Occam’s Razor).

This article went into several detailed aspects and included that by all expert analysis there is only a minimal amount of bank owned properties that aren’t put on the market quickly. I have often seen bank owned listings that show only 1 day on market (DOM) but hundreds of combined days on market (CDOM). I look at the history and see that this was a short sale that sat on the market for months waiting for bank approval for the sale but finally ended in foreclosure. The bank then had their asset manager arrange for the clean out, new paint and carpet and listed the property for sale, all in less than 30 days (otherwise, the CDOM would be the same as the DOM).

The big issue that this article pointed to is that there is a different kind of shadow inventory and it’s not what I or most people consider or refer to as shadow inventory. It is all the properties that are delinquent on their payments and will most likely never become current. It is the houses in pre-foreclosure, foreclosure or short sale status where no payment is being made, the owners are getting further and further under water and the most likely outcome for them is foreclosure.

The article then goes further to point out that all the people that are living in a home in foreclosure, pre-foreclosure or a long, drawn out short sale process aren’t selling, they aren’t buying (and won’t be able to for a long time) and they aren’t even renting.

According to the reports, if all the properties that are currently owned by banks but not on the market were listed tomorrow, we wouldn’t even notice it. On the other hand, if all the delinquent properties were foreclosed on in the next couple months and put on the market, that would make a huge impact and we would definitely feel it.

Of course, this hypothetical blood bath of massive foreclosures over a few months time isn’t going to happen for many reasons. The real reasons this wont happen and the conspiracy theory reasons include: foreclosure regulations, loan modification attempts, banks being too slow and bogged down, banks wanting to hold off on foreclosures until the properties are worth more, etc.

Many regular sellers don’t want to sell at the bottom of the market if they don’t have to, so they are sitting on their property waiting for the value to come back up. I’m pretty sure that the bottom of the market for Sacramento was in December 2011, but we still have a ways to go for many owners to have enough positive equity in their homes to do a regular sale.

Whatever the real story is, there isn’t enough inventory on the market and the banks are not sitting on vacant houses that they own but just don’t want to sell. My buyers are scrambling over the few properties that are on the market and competing with multiple offers. It is a brutal market and I look forward to getting back to something that could pass as “normal”. Fortunately, we live in a world of impermanence and this too shall pass.

You can read the full article here starting on page 14.

Squirrel!

This little guy was hanging out on my neighbors tree and posed for this picture.
Just too cute when they are all splayed out like this.

 

Potential Pest Problems

OK, not your traditional pest problem that an inspector might encounter, but you try getting this furry little guy out of the wood work!

American River Trail First Ride of the Year!

We took our five wheeled tandem recumbent bike out for the first ride of the year. Last year we didn't get in very much ridding and maybe we should have started out with a lighter ride, but Cheryl was inspired and I didn't resist. We cranked out 30 miles today on the American River Bike Trail.

The first 13 we felt great and strong. At mile 15 we had a lunch break in one of the many parks to regain our energy and then started the ride back home. Somehow, we didn't regain our energy. The ride home was a bit of a slow grind. We are both very sore now and I think tomorrow will be worse...

It was well worth it. We got to see lots of great wildlife and had a wonderful day of it. Just a couple of the great pictures we took on the trail.

To see more about the bike, go the our website for it at www.5-wheels.com

My Masters Club plaque

Here is my official Masters Club plaque!
I look forward to filling up all the spaces each new year.

2011 Masters Club!

It is official, I made the Masters Club for 2011. To make it into the Masters Club you have to be in the top 10% of the SAR Membership based on your production in 2011.

The purpose of the Sacramento Association of REALTORS® Masters Club is to support the Sacramento Association in providing additional programs and services that enhance the competency, professionalism and productivity of its Members, and to recognize the achievements of top REALTORS® who apply for membership and who have earned a level of excellence in real estate sales.

2011 was a great year and 2012 is shaping up to be even better. I love that when I help more people find a great home or sell their old home that it means I’m having a great year!

The Slow Season?

I love it when a source like the Wall Street Journal confirm what I was thinking.


Sales Stir Hope for Housing Market
Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.

Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors' chief economist, called the December gain "a good finish to a very tough year."

December and January were crazy busy months. I'm loving the work, but need to find a way to make it sustainable without burning out. The days off have become a bit too rare recently.

Not that I'm complaining mind you. This is the best problem to have in a business!

East Sac Tree Work

Found these guys working on the trees on my street this morning.

Glad that I'm a Realtor and not climbing way up in a tree with a chainsaw dangling from my hip. It looks like a bit too much heights and excitement for me...

The Slow Season

I have been told that the holidays are the "slow season" in the real estate business. I've been told this from many sources and once upon a time I did believe that it was a little slower around this time of year.



I thought that an agent that was willing to still work the business at this time would still have a little business because many other agents we’re not as active.



I never imagined that this was the busiest time of year, but for me that sure is the case! There have been no posts to my blog in over a month because I’m focused on taking care of my clients in every working hour. Priorities!



Happy holidays!