As Prices Fall in Region, Investors Step Up
Posted Mar 28, 2008 @ 7:32 pm, Viewed by 231 Visitors, Read 242 Times.Speaking of the greater Sacramento Region, it seems as if $200,000 is the level at which demand steps up to meet the supply. Reports are that homes at $200,000 and below are experiencing multiple offers as of late.
My previous post points out however that precious few of these low priced homes are available in Davis and Winters. Woodland and Sacramento seem to have more supply.
As mortgage requirements get tighter, it is investors filling the void. First time buyers struggle against current eceonomic conditions to save a down payment and qualify, while experienced investors with cash and financing snap up the bargains.
There is no doubt that housing in Yolo County and Sacramento County is becoming more affordable. In my next post, I will provide some details as to the latest median home prices and sales numbers for the area.
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I am a Realtor with Coldwell Banker, Doug Arnold Real Estate in Davis, California. I have been working in Real Estate for 20 years, and have been selling Davis Real Estate, Woodland and Yolo County Real Estate for over 12 years. Read More
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As a homeowner, investor, and veteran appraiser, I agree with your assessment to the extent that 2008 may well be looked back upon as the best time to buy. Interest rates are low, and prices are low. Seldom do these two variables intersect. The greatest discounts can be found in market areas with greatest distress. The most stable areas, particularly those with their own micro-economic bases that exceed their surrounding areas, will not likely have the same price reductions as the surrounding areas. From a personal perspective, when I look at real estate for my own portfolio, I focus on a couple of different factors. One is "What is the up side?", meaning- If I buy this now, what kind of gain can I expect in the future? Another is "What is my risk?", meaning- If I buy this now, what, if anything, am I risking? Is the market likely to continue to decline? How long will I have to hold to see a gain? Yet another is "What kind of financing can I get, and how much will it cost me?". And the answer is different for each property. Financing is still readily available, at very attractive rates, for 1-4 family, owner-occupied residential properties, but the days of 0 down appear to be gone for now. Will values go up? A look at historic values, including bubbles, peaks, and down cycles, will give some evidence as to what has happened with California real estate. A simple test is to look at the median price in a given market at each market peak over the past 30 years, to go out 10 years from that peak, and see what the values did. It is a GREAT time to buy! It is an exciting time in the market for buyers. Incredible values are out there, all over the Sacramento Valley (and the rest of California, too!). The good thing about a down cycle is that history shows us that it is always followed by an up cycle.