Tuesday, March 08, 2011

Sacramento Real Estate Market - March 2011

Post off-topic links, observations, and stories about the Sacramento real estate market. Please read the comment policy before posting.

11 comments:

RV6Flyer said...

http://finance.yahoo.com/news/Doubledigit-rent-rise-is-cnnm-1354637756.html?x=0&sec=topStories&pos=6&asset=&ccode=

patient renter said...

Many renters are not a captive audience. If rents increased dramatically that would simply push more fence-sitters towards buying.

husmanen said...

The rental market is in a weird funk.

There are lots of people looking for single family house rentals but they may have bad credit (Foreclosure), job loss or ?

The market usually takes care of this by requiring additional deposit levels or higher rents, but this is usually not the majority of the market.

Increasing rents in turn are usually supported by high demand and low supply. As well as an economy to support this.

General inflation in the house rental market in our area could take off if general inflation takes off and is followed by wage inflation.

The CPI for Feb 2011 rose 0.5% in one month due to fuel and food prices. If this continues inflation pressures will mount.

PeonInChief said...

I think it unlikely that rents will rise much here: we have high unemployment, more than a third of the sales are to investors (who are likely to either flip the property or rent it out), and there is no income growth in the state sector.

Giacomo said...

We're moving to another rental house in our rural neighborhood -- about the same size, but 20% cheaper (and we had multiple choices). Our landlord is scrambling to find someone who will pay the same rent that we've been paying for the least 3 years, and it hasn't been easy. He's now telling applicants that he won't necessary rule them out even if they have a low credit score.

The MLS is wackier than ever here, with foreclosures (with acreage) often asking less than $100/sq.ft, while some underwater owners are still trying for $150,170,200+.

The inclination of homeowners to see a bottom is strong, but I think it's based more on wishful thinking than on thoughtful reasoning. I see no real supports at this level, and expect substantial prices drops ahead-- hence the new 1.5 year lease for me.

husmanen said...

I have friends in Gold River where their landlord raised the rent 15% and they said no way and moved. But they didn't get a home cheaper than their previous rent, about the same.

Their old landlord may have someone specific in mind for the new place, or just wanted to test the waters. Could have been a costly test by the landlord, but a 15% increase is above market rents.


Another point, my old rental wanted to increase the rent, but backed off. Probably because the house is so easily identified as a pre-foreclosure and the rent increase was about 5% (not much but it has to be discounted drastically if someone will risk a potential move again due to foreclosure).

In Folsom and EDH the rents for homes appears pretty stable for the last year or so.

Karen said...

My Folsom apartment intends to raise my rent by $70 when my lease is up. That's way above comparable market values. I'm started house hunting in Folsom, but find most homes in my price range (up to $300,00) are either dumps, old with undesirable features, in bad locations (such a busy street) or in the Folsom slum.

I don't want to rent a house, then find out it's now being short sale'd. Moving is such a hassle.

husmanen said...

Karen. Folsom and parts of EDH are still living in bubbleland, and prices are probably 10%-20% too high in general. There are rental parity homes that do arise but they are soon pending with the most qualified buyers that have a minimum of 20% down.

In your price range there are some, but not many homes available. Your max of $300k puts your PITI for a home at about $1600 with 20% down.

A few homes that rent for about $1600 per month that have recently sold in Folsom include:

689 Hillswick
608 Hillswick
555 Caislean Ct
104 Silberhorn Dr
884 Densmore Way

These all went for around $300k and have different size lots, streets, sizes but are generally newer homes that didn’t need a lot of fixing up.

Although these homes sold for close to rental parity there is still a very high chance that the prices will continue to fall further. The prices will not go to zero but may go another 10%.

husmanen said...

Karen. Regarding renting a home that could go into foreclosure, you could do a little research and identify those with the highest risk. Things to look for are:

Last sold If sold between 2003 and 2006, high risk. Source: Zillow.com
Taxes Check the Sac County Tax assessor site to see if they are paying their taxes. Source: http://www.assessor.saccounty.net/AssessorsParcelViewerApplication/default.htm then check ‘accept’ put in address and then click on tax link, which opens another page.
Auction Sites Check Realtytrac.com, fidelityasap.com and priorityposting.com to see if the house is identified as being in the foreclosure pipeline.
Ask Ask the landlord if they are underwater
Contract Get a lease for at least a year. If the house goes to auction this increases your leverage. You get at least 90 days to move out under current law.

Just some thoughts.

PeonInChief said...

Karen--

You should also check out your landlord at the Recorder's site. There you type in your landlord's name and you'll get all of the recorded documents attached to that name. If anything looks weird, check it out further, particularly liens and notices of default. Those may not be attached to the property you're looking to rent, but it may indicate and landlord in trouble.

arrielle_p said...

Blogs are good for every one where we get lots of information for any topics nice tips keep it up !!!

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