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.
When we purchased our current home in 2011, we were very careful.
For instance, even though I'm a seasoned real estate broker, I hired a colleague to be our Buyer's Agent. I was glad I did... her help and expertise were invaluable. They say that an attorney who represents themselves has a fool for a client. That's true for real estate brokers, too.
I made sure that I went over the property with a fine-tooth comb. I had a complete home inspection. The home has three independent heating and air conditioning systems, so I had each system inspected by an HVAC contractor (and, as a result, we decided to replace one unit for $8,000). I had a roof inspector "walk the lid" and issue a 3-yr roof certificate.
Many homes need more than one type of inspection
A pool inspector came out and inspected the pool chemistry, condition of the stucco, the filter and filtration equipment, the electrical connections (including the pool light) and the electrical panel, and the natural-gas pool heater. He passed the pool with flying colors and taught me how to operate the pool systems.
Always have a built-in pool inspected
Finally, we closed escrow and moved in on Saturday.
Sunday morning, we turned on the washing machine and all the first-floor toilets backed up all over the floor.
WE FORGOT THE SEWER INSPECTION!
The plumber who saved us - the repair ended up costing about $1000 - opened the clean out drain in the ground next to our front door and showed us all the roots that were invading the pipe and making the toilets back up.
Buying a resale home? Get a sewer inspection
We learned the hard way... a sewer inspection would have cost me about $185 and discovered bad root problems, which I could have negotiated to have the seller remove before purchase, saving me big bucks.
I recommend that you have the sewer inspected on any resale home you purchase.
Don't get suckered by plumber's ads offering free inspections - pay for a visual inspection of your sewer line(s) from the toilet and sink to the street (the city or county sewer main that meets your pipe at the street).
plumber will inspect sewer with camera
Include a sewer inspection in your due diligence if you are considering purchasing a resale home. Spending a little money up front will give you peace of mind if all is OK, and you'll have the information you need to renegotiate terms of the home sale if the sewer turns out to be a problem.
It's not just the temperatures that are sizzling around here this summer... Sacramento is one of the hottest real estate markets in the U.S.
Home sales are heating up just about everywhere in the country - demand is at pre-recession levels - mostly because buyers realize interest rates are going to rise and because buyers want to get in on the appreciation party as affordability becomes a real life issue for anyone that has to make payments.
Here are the 20 hottest residential sales markets in the U.S.
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.
The Federal Reserve told us all last week that interest rates are going to rise, but it will be a slow climb.
Should be smooth sailing, right?
Cheap money we can count on for the time being, so there's no hurry to think about the future, right?
Not so fast!
Interest rates bottomed out about a year and a half ago, and they've been going up since. So,
the rise in rates is not something we need to plan for...it's here...
Check out this chart:
If you have to make payments, it doesn't take much of an interest rate hike to make that house you dream of buyingmuch more expensive - an increase of just 1.5% (like from 3.3% to 4.8%) can make that $300,000 dream home actually cost you about $100,000 more in interest!
The upshot is that a higher interest rates usually means you will be forced to make a higher payment or you will have to buy less house.
Ask yourself:
Are homes in Sacramento going to be less expensive or more expensive in five years? Can we expect interest rates to stay low? Find the house you love and buy it now while prices and interest rates are reasonable.
I drove by the course yesterday and snapped some pictures. Grandstands and service tents are visible at the corner of Marconi Ave and Morse Ave and down Morse Ave along the back of the course.
Del Paso Country Club was first developed in 1916
Hospitality and service tents
Corner of Morse and Marconi
Grandstands Actually, there shouldn't be much to do to get the course ready for action, as the members recently completed a $10 million dollar renovation that marks the seventh remake of the course and its layout since the first 1916 design by John Black.
New park-like fairway design
I remember living in the neighborhood back in the 1970s when Del Paso hosted the Gene Littler Swing-for-Cancer Charity event. Other major tournaments of the past included
1957 US Women's Open
1960 US Senior Women's Amateur
1976 Women's Amateur
1982 US Women's Open
130,000 fans are expected at the event. Marconi Ave will be closed all week from about Lacy Lane all the way to Watt Ave. Pope Ave will also be closed.
Del Paso CC was laid out back in the day on a 147 acre parcel of land left over after developers carved up much of the Rancho Del Paso land grant.
It was mid-twentieth century when the area really took off.
In the 1940s, developer Jere Strizek went on a tear, building Town & Country Village out of old recycled building materials, and designing and building homes and apartments throughout the area. Today, the district is just beginning to change the look that Strizek stamped on it throughout the forties.
Under construction 1946
Ad for some of the original T&C Village Shops. The Maleville's (Coral Reef Restaurant) owned an appliance store
Bohemian Gardens cost Strizek $1,000,000
1948
BTW -Thanks Atomicpear for some of the great images
And finally, the go-to getaway right in the middle of the neighborhood - ALDOS!
A great neighborhood and an interesting part of Sacramento history.
Many homes need more than one type of inspection
Always have a built-in pool inspected
Buying a resale home? Get a sewer inspection
plumber will inspect sewer with camera
