Home to the California State Capital and rich with history and a sense of community, the Sacramento Region is also known for its growing business opportunities and one of the strongest economies in California. We’ve survived a number of years of a struggling commercial real estate market but analysts say much better days are ahead in 2013 and beyond for the Sacramento region.
Fourteen financial analysts from California State University, Sacramento recently unveiled their overall economic picture for the Sacramento Valley in a recent edition of the Sacramento Business Review. The experts agreed that the local economy and real estate market is improving.
Analysts attribute a large part of the economic improvement to growth in the regional population which positively affects the real estate market. According to a report recently released by TD Economics, all indications show that a recovery in our housing market foreshadows continued improvement in commercial real estate over the next two years.
“With population growth, you always see the service sector industry expand,” Sacramento State College of Business Dean Sanjay Varshney recently said. “Once again, you are seeing the people spending on restaurants and retail on buying new cars and buying new televisions.”
Despite challenges – including gradually rising interest rates and government spending cuts – TD Economics says the outlook for commercial real estate is positive. The U.S. economy is expected to grow by 1.9% in 2013 and accelerate to 2.8% in 2014. This growth will spur the creation of jobs over the next two years. As job growth accelerates, so too will demand for commercial real estate, leading to continued improvement in vacancy rates.
Become an SAR Intern Sponsor and reap the many benefits of working with an energetic, ambitious college student eager to learn the real estate business. Through a unique partnership with Los Rios Community College District, SAR has qualified intern applicants ready to assist in your real estate office ten hours per week while you guide them through the various aspects of buying and selling.
About the Program:
Highly-motivated real estate students invest their time and energy ten hours per week for a 16-week mentor program
Your knowledge and experience will prepare more students for a career in real estate
SAR will provide you with guidelines for the mentorship program
Broker/agent applications are due by Friday, June 28 for the Fall 2013 semester Apply to be an SAR Intern Sponsor Today!
A new SAR committee is working to encourage and organize REALTOR® volunteers. The Volunteer Coordinating Committee, chaired by REALTOR® Kelean Barragan, will promote volunteer activities both within SAR and to the general public.
Committee members are researching the charities that SAR has traditionally supported to learn about volunteer opportunities.
“I’m excited and honored to have been asked to chair this committee,” Kelean said. “Our tasks will be to find the volunteers and to find the opportunities. We know REALTORS® are great at serving their community. This committee will help more people get involved.”
The committee meets at 10:30 a.m. on the first Tuesday of the month at SAR, following the Main Meeting. More committee members would be welcome.
However, it is not necessary to join the committee or come to meetings to become an SAR volunteer. The committee will develop and publish lists of opportunities available to all SAR Members. To sign up for the committee or to learn more, contact Tony Vicari at tony@sacrealtor.org.
To all of you who attended C.A.R.’s Legislative Day in Sacramento earlier this month, thank you all for making it a great success! More than 2,300 of you turned out to hear California Gov. Jerry Brown discuss such topics as California’s economy in relation to the global economy, the state’s education and employment outlook, and the improvement in the California housing market. We then headed over for a photo opportunity on the steps of the Capitol and, later in the afternoon, returned to the Capitol to discuss with our state legislators the issues of importance to the real estate industry. In fact, thanks to your direct efforts at Legislative Day, we scored a big win with AB 905, a private transfer tax to fund environmental improvements to a property. C.A.R. opposed AB 905 because it forced a financial burden on future owners of a property with no oversight, no accountability and no limit on how long the tax can be imposed, even years after the improvement has been paid for or the useful life of the improvement has passed. Following Legislative Day, the bill’s author decided to make AB 905 a two-year bill, essentially tabling it until 2014.
At Thursday’s Mid-year Luncheon, C.A.R. CEO Joel Singer discussed the current housing market conditions and how the transforming real estate industry will impact your business. He also touched on the housing policy environment and how changes to the mortgage interest deduction will affect the housing market. He closed by discussing the long-term future of the real estate brokerage industry and how the disintermediation that has changed such businesses as travel agencies, bookstores, and stock brokerages may eventually alter the real estate industry as well. View the complete presentation.
While we were in Sacramento, we also commemorated the 100th centennial of the REALTOR® Code of Ethics, which was established in 1913. The Code is a living, dynamic statement which guides REALTORS® in their daily professional lives and is what makes the difference between a real estate agent and a REALTOR®. Show your pride in abiding by the Code of Ethics by visiting NAR’s Code of Ethics site to find radio interviews, shareable social media content, and other information about the REALTOR® Code of Ethics. And view a video shot in Sacramento of C.A.R. members who “Live by the Code.”
Month-to-month the median sales price increased 1.5% from $218,750 to $222,000. The current price is an 11% increase from the $200,000 sales price of January. The current number is 31.4% above the $169,000 median sales price of April 2012
An increase in sales volume brought the total number of closed escrows to 1,550, 9.2% and 130 units higher than the 1,420 units sold in March. The breakdown of sales for April was 133 REOs (8.6%), 361 short sales (23.3%) and 1,056 conventional sales (68.1%). This marks the highest percentage of conventional sales recorded since SAR started keeping track over 5 years ago. Compared to one year ago, REO sales accounted for 30.1%, short sales 30.5% and conventional sales 39.4%. Since then REOs have dropped 71.4%, short sales dropped 23.6% and conventional sales have increased 72.8%. Compared with April 2012, however, the sales volume has decreased 5.1% from the 1,633 units sold.
Homes priced between $200,000 and $299,999 accounted for 19.4% (302) of the 1,550 sales this month. Homes between $100,000 and $199,999 totaled 534 (34.4%) units and homes $99,999 and under totaled just 99 units (6.3%). A year ago, homes under $100,000 accounted for 16.4% of all home sold.
Closed escrows from cash financing (625 units or 37.2% of all sales) decreased 7.8%, conventional buyers increased 4.3% (604 units/35.9%) and FHA financing increased 5.3% (308 units/18.3%) sales. These numbers include the 132 condo sales this month. The average amount of days spent on the market (from list date to opening escrow) decreased from 27 to 22 days; the median DOM remained at 10. In a breakdown of length of time on market, 80.7% or 1,358 units sold in 30 days or less and 10.6% (178 units) sold between 31 and 60 days. The remaining 8.8% (146 units) sold in 61 days or more. This information is available in full on the MLS Statistical Summary report featured at http://www.sacrealtor.org/public-affairs/statistics.html.
The Sacramento Association of REALTORS® is working on a very exciting coalition project with The Sacramento Metropolitan Air Quality District, Rebuilding Together Sacramento, Habitat for Humanity, and UC Davis.
Two years ago, the City of Sacramento attempted to require that all homes receive an energy audit before close of escrow as part of the City’s climate action plan, in hopes of reducing CO2 emissions. A program such as this would achieve very few greenhouse gas reductions, and dramatically hinder the real estate market and the regional economy at large. SAR opposed this aspect of the plan, and worked with the Air Quality District to create a proactive, voluntary approach. In doing so, SAR and the Air Quality District were successful in working with the City of Sacramento on a climate action plan that did not include point-of-sale mandates.
Two years later and with additional coalition partners, the “Home Energy Conservation Program” has upgraded over 65 homes throughout the Sacramento region for low-income homeowners, free of charge. Improvements in the homes were made based on a comprehensive analysis by the Air Quality District on what individual upgrades removed the most greenhouse gas from the atmosphere for the least cost. This strategic analysis enabled the group to create a program that can treat homes for under $200 per home on average. Upgrades include window caulking, door weather stripping, installing electrical gaskets, replacing standard light bulbs with compact fluorescent, wrapping hot water heaters, insulating hot water pipes, and installing low flow showerheads. Program partners Rebuilding Together Sacramento and Habitat for Humanity are responsible for finding homeowners, qualifying them for the program and completing the upgrades.
On May 8, SAR’s Housing Opportunity Committee presented a Lunch and Learn entitled “Guts & Glory: the Story of Inventory.”
Panelists discussed ways to create inventory when it seems there are no houses for sale. Open houses can be a useful tool to get neighbors thinking about getting into the market. Open houses may seem old-fashioned in today’s market. However, the National Association of REALTORS® recently released interesting statistics in conjunction with Nationwide Open House, which was April 20 and 21. From the NAR annual profile of home buyers and sellers:
Repeat buyers are more likely to find their home from an open house than first-time buyers and repeat buyers use open houses more frequently.
Mid-income buyers, those with income between $55,000 and $75,000, are most likely to find their home through an open house compared to other incomes. However, as income increases the use of open houses actually increases as well. So higher income buyers are walking into open houses, but not finding their home through them.
Older buyers, 65 years and older, are more likely to find their home through an open house than other age groups. As age increases the likelihood of using open houses as a search tool increases—45% of buyers aged 45 to 64 used open houses, compared to only 28% of buyers aged 18 to 24.
Buyers of new homes use open houses much more frequently than buyers of previously-owned homes.
Married couples and unmarried couples are more likely to walk through open houses than single buyers.
Buyers whose primary language in the home is not English are more likely to use open houses—44% of buyers whose primary language is English use open houses, compared to 59% who use a language other than English in the home. Similarly, buyers who were not born in the U.S. are more likely to use open houses as a search tool—43% of those who were born in the U.S. use open houses compared to 57% of those who were not born in the U.S.
The last point, concerning buyers whose native language is not English, may be especially useful in a market as ethnically diverse as Sacramento’s.
The Board of Directors of the California Association of REALTORS® meets three times per year to set policy and conduct the business of the Association. The most recent meetings were held May 1 – 4, 2013 at Sacramento, CA. Some of the more significant actions taken are as follows:
The appointment for Trustees for the two Political Action Committees for terms beginning in November 2013 were made. Trustees from Region 3 include:
cREPAc Trustees for 2013-2015 – Eva Garcia
cREPAc Alternate for 2013-2014 – Doug Covill
IMPAc Trustee for 2013-2015 – Paula Colombo
IMPAc Alternate for 2013-2014 – Kim Tucker
The Membership committee proposed that C.A.R. urge NAR to modify the dues formula related to real estate licensees working exclusively as MLOs. This recommendation will be forwarded to NAR for consideration.
The Professional Standards committee proposed that C.A.R. support a position that local associations must notify the broker of salesperson complainant about an ethics complaint being filed provided confidentiality can be ensured. This recommendation will be forwarded to NAR for consideration.
We have recently passed through one of the most hectic administrative periods of the year for the Association. We had the collection of annual dues for NAR, C.A.R., SAR and Masters Club, as well as the quarterly fees for MetroList, and voluntary contributions for Political Action, the Scholarship Trust, the Charitable Foundation and the C.A.R. Housing Affordability Fund.
Throughout this stressful period as well as all other times of the year, your Association staff tries their very best to provide personalized and quality service to every one of our members. If, due to the pressures of the moment, we may on occasion fail to achieve that goal, I sincerely apologize.
On the other hand, we ask the members to keep in mind that staff does not set policy. We are merely charged with administering the policies set by your governing entities. We implement policies set by the NAR, C.A.R. and the SAR Board of Directors as well the MetroList Board of Directors
and the Masters Club Steering Committee. We have no authority to waive or modify those policies.
If a late arriving payment results in an imposition of a late fee or a disruption of service as required by policy, we may sympathize with any hardship that may create for you, but we must follow the policies we are given. We are confident that if you reflect on it for a moment you would agree that you would not want staff deciding whether or not they are going to follow policies that they are charged with implementing. Members should be confident that every policy is applied equally to all members of the Association.
C.A.R. is making a big splash with a new radio push to help promote the “Ripple Effect” messaging of the the 2013 consumer ad campaign. This year, C.A.R. will take over the Friday afternoon commute time, during which seven unique radio spots will air on three radio stations in the Sacramento area.
Listen to these stations on Friday afternoons between 2:30 p.m. and 6:30 p.m. through June 18 to hear about how California REALTORS® are Champions of Home and making a difference to California:
KHYL-FM
KQJK-FM
KBFK-AM
And don’t forget to tell your clients to tune in and hear how California REALTORS® like you are helping home buyers and sellers get into the homes, neighborhoods, and communities of their dreams.
Thursday, May 23rd, 2013
