Here's Why You Need to Act Now

"Don't wait to buy... buy and wait"

If you follow financial news, you probably know that we're hearing that mortgage rates are going to start increasing. As in all things, timing in real estate is everything. The Fed has been keeping interest rates low for many quarters, and now they are ready to give inflation it's head (just a little, they say...).

What I know as a Realtor is that sellers suffer when interest rates go up - even a little -  because buyers who finance end up being able to buy less. Buyers suffer because they end up getting less house for their money. 

What are you waiting for? If you are thinking about buying or selling a home in Sacramento, now is the time to get going! Interest rates have never been lower and they are not going to stay that way. Don't let this July pass you by without taking action!

If you think it's a good idea to wait, take a look at the July 30-yr fixed mortgage rates since 1985 (that's when I got my first home loan).

Whether you're looking for a new home in Elk Grove, thinking of refinancing your home in Davis, or buying a Carmichael duplex to add to your retirement portfolio, now is the time to act. Call me and start designing your wealth plan today.

Will Home Prices in Sacramento Keep Rising?

Single family home prices in Sacramento have been going up since about mid-2012. Prices over the last 12 months have followed the same path, although fluctuating somewhat in the rate of increase.

Figure 1 shows an increase in average Sacramento home prices of about 8-10% over the last year. Prices are increasing beyond pre-recession levels and they continue to go up. The average home appreciation in the U.S.over the same period was about 5%.

Figure 1.

One of the factors that has pushed prices higher in Sacramento is that buyers continue to be willing to pay retail prices in order to find nice homes. Figure 2 shows that over the last year, sale prices are about 98% of listing prices, which suggests that buyers don't expect much of a discount from sellers. If this was a buyer's market, we would expect to see buyers demanding (and receiving)  a five to eight percent discount. A hot seller's market would see multiple offers and above-list price offers.

Figure 2.

Figure 3 highlights another condition creating rising prices in the Sacramento area. The number of months it would take - given the current sales activity - that it would take to sell all the homes for sale in Sacramento is under two months, and that time period has actually reduced from last year. Residential real estate markets are usually considered to be price-stable when inventories are in the 5 to 6 month range.

Homes are selling quickly in the Sacramento market. Even though prices have been rising for twelve quarters, the willingness of buyers to pay list price, lack of inventory and the resulting low number of days that homes remain on the market will continue to drive prices up in the Sacramento residential real estate market.