SACRAMENTO (CBS13) — New home buyers are busy this summer trying to navigate an ever-changing landscape as new hurdles emerge after the housing bust.
The sign out front may be fresh, but the plan in the back of Ed Boyce’s mind has been stewing for awhile.
“My hope is to sell this for enough money to buy the place in Oregon,” he said.
His Sacramento County home has been on the market for about a week now, and he’s wondering how the local housing market is doing as he plans his retirement.
The man with his finger on the pulse of recent housing trends, Ryan Lundquist with Sacramento’s Lundquist Appraisal Company, gave us the scoop.
“The interesting thing about today’s market is it’s no longer driven by distressed properties,” he said.
Real estate-owned homes that have gone through the foreclosure process made up just 5.3 percent of all sales in the second quarter in Sacramento County. Just three years ago, that number was 30 percent, and in 2009 it was at 70 percent.
Short sales, when a distressed homeowner and lender agree to sell the home at a loss rather than defaulting on the loan, are down to just 5 percent of all home sales in Sacramento County.
Lundquist says the county home sales volume last month was high than it’s been in the past three years. While inventory is low, buyers are being more picky.
“Buyers are showing alot of discretion and saying, ‘You know I think I’m gonna pass,’ on that property on a busy street, or with the adverse location,” he said.
Cash investors are also stepping out of the market.
“Two years ago the market was driven by cash investors..outside investors coming in to Sacramento buying everything and ramping up values but we don’t have that dynamic anymore,” he said.
In Sacramento, Placer, Yolo and El Dorado counties, cash sales made up 16 percent of all sales, compared to 31 percent two years ago.
Federal Housing Administration loans that require just a small amount of money down have been on the rise. In the Sacramento region, FHA sales were up 23.7 percent last month and 31 percent overall this year.
“The thing is that sometimes, since FHA buyers are putting less money down, they tend to offer at higher price levels, and so that does create a lot of competition, particularly at the lower end of the market where there’s even more FHA loans going on under $200,000,” Lundquist said.
Interest rates are low as well, but it’s harder to qualify nowadays after the housing market crash.
The median price for a home in the Sacramento region is $323,000, up 7 percent from a year ago.