April was much like March in the Elk Grove market so I am tempted to just say, "ditto," but I will do my best to add something new and intriguing. Home prices are up%
Elk Grove Market Update for January 2021
Dated: February 16 2021
Elk Grove, January 2021
The Elk Grove market is proving to be very challenging for home buyers. Just look at the numbers, prices are way up year over year, few homes are on the market and, when the few houses available hit the market, they are in contract very quickly. Here is what we are facing day to day. A house comes on the market. My very well qualified client puts an offer in way over the highest recent sales and offers to pay all costs in the contract (traditionally, the seller pays most of the fees with a split of escrow and title costs). My client also offers to shorten every contingency period. If the appraisal would have come in low, my client agrees, in writing, to pay a hefty amount over appraised value. And yes, in writing, I agree to cut my commission. This is a win-win-win solution for the seller. What did that offer get my client? Second place out of 27 offers. In real estate, second place is last place. There is no consolation prize. It is tough to call a wonderful, qualified buyer and tell them, "Sorry, we did not get it." It is also tough to tell buyers that they have to give up so much of their contractual protections to buy their first home. It is really hard to protect your client when the market gets this heated.
This is a very good time to be selling your home. The one disadvantage would be if you are looking to purchase a replacement home too. The purchase will be the challenge. One other caution. There are a lot of groups, agents and investors offering to buy homes directly from homeowners right now (also known as iBuyers). This can be a good option at times. These companies usually offer to close quickly, based on prices of recent home sales in the area, with no sales commission, no fees and as hassle free as possible. The market is so hot right now, though, that your house really does need to be exposed to the largest audience possible.
I receive many of the same solicitations. One investor recently offered to purchase one of my rental properties. He offered me all the conveniences that I mentioned above. It sounded pretty enticing until we discussed price. His offer price was a full $100,000 under market value. I am willing to face a few hassles for $100,000. It is an excellent market for home sellers. Take advantage of it! Spend a little time getting your home ready and reach out to a solid agent to help you through the process.
Laguna West, Lakeside and Stonelake
I always like to look at this neighborhood because I have lived here since 1999. The numbers of homes sold here is a smaller sample size so it can skew the numbers a bit. To solve that problem, I use a rolling average of the last three months. The numbers are still inconsistent, though. It looks like prices have not appreciated as much in this area as in the whole of Elk Grove. It turns out the average size of homes sold in 2020 was 2,456 square feet versus an average size of 2,200 square feet in 2021. The homes sold this year have, on average, been 256 square feet smaller so the appreciation values look lower than for all of Elk Grove. Price appreciation has been higher than the table above indicates.
Today, the supply of homes available to purchase is very low. Laguna West has only four homes available. Stonelake has one available and there are no homes even available in Lakeside.
My friend, Charley Schmitt from ReMax Gold, has this to say about the Sacramento region, "I don't know how to respond to this market other than in my almost 48 years of being in this business full time, it has never been more difficult to be a Realtor. It is hard to get listings and even harder to get wonderful buyers into a home." She is right. Agent after agent says much the same thing. If you are going to purchase a home now find a really good agent and be persistent.
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Ray Henson has been in the real estate industry since 2010 as an agent. He has achieved numerous designations, including Graduate Realtor Institute, Senior Real Estate Specialist, Certified Negotiati....