Lauren Schenke

Your Partner in Real Estate



Sacramento Real Estate Market Seeing Changes

Since spring of this year, the Sacramento Real Estate market has started seeing trends that makes me wonder what the next year will bring. Last year and the first few months of 2013 were for lack of words, frantic. There were dozens of offers on each listing, prices were increasing by the hour, and buyers needing  financing found it tough to get into escrow on a home.

Then Spring and early summer came along and interest rates increased a point in reaction to fiscal news of an improving economy and possible decrease in stimulus funds. The interest rate increase just about killed profits for investors putting 20% down on properties and financing the rest. Other cash investors moved on to markets outside of Sacramento where prices hadn’t increased 30+ percent over the last year. I read not long ago that Stockton is now the new hot spot realizing high increases…just a few months delay behind Sacramento and they will be right where we are now.

In my opinion, the once frenzied real estate market has somewhat normalized over the past few months. Listings that go on the market at atrocious prices aren’t getting showings….or offers. Open house agents are reporting crickets when their sellers want to start out at too high of a price. Not too long ago, listing your home at a high price was “normal”…and you would even get offers above list price, with buyers removing their appraisal contingencies and willing to pay the difference between appraised value and offered price! Today, the days on market counts on MLS are increasing, sellers are finding themselves reducing their list prices to compete with nearby listings, and buyers have once again started asking for home warranties and pest clearances…those “extras” that we never asked for before when there were 12 offers on the table.

I personally think this is good for the local real estate market in Sacramento. If we had continued to increase at 30+ percent appreciation in values per year over a long period of time, I think there would have been the possibility of another dreaded bubble. Today, I think we hopefully flushed the frenzied activity out of our system and have plateaued at a normal growth level that we can hopefully sustain over time. Local trend graphs are showing changes in the market over the past few months, with a large increase in inventory of homes coming on the market, sellers reacting to competition coming on the market around the corner, and buyers having more power in their pockets. I for one look forward to normalcy when two hours on the market doesn’t mean the home is already sold to a cash buyer. The buyers that need to sustain our market and our economy are not those that have cash…they are those that need financing.

I’ll continue to keep you posted as more changes happen in the local market. Send me any questions/thoughts!

inventory 101413prices oct 13


Mortgage rates are low low low….

Every time I think mortgage rates can’t possibly go even lower, they continue to surprise me. Here’s a great visual for you to see exactly what rates have been doing since 2000. It’s a great time for first time buyers, investors, and all buyers to get in the market or refinance their existing mortgage. If you need referrals to some of my favorite lenders, please check out my “vendor” tab on this site…and then start saving money!


Real Estate….You Either Love It or You Hate It

The current real estate market is a funny thing…you either love it, or you hate it. Most people fall in one of these two camps and are outspoken about the side they are on. The one side knows that this is an amazing time to buy right now. The combination of historically low interest rates, low – or “normal” – home prices, and the number of foreclosed homes being sold at auction make it a great time to get in the market and purchase a primary residence or an investment property. Every time I utter the words, “Rates just can’t possibly go lower”, they somehow find a way to do just that and prove me wrong.

There are so many buyers taking advantage of the market right now – and many of these are first time buyers, and many more are savvy investors. For first time buyers, it is a great time to purchase a starter home where six years ago it would have been impossible. For many real estate investors, there is an amazing opportunity to buy long term rental properties, or “flip” homes. These investors that flip homes buy properties at auction with cash and “flip” the property back to the market for positive income. They may or may not do repairs or updates to the home such as new carpet, paint, and granite countertops or a new kitchen…things that today’s buyers are looking for in a home. Other investors simply take advantage of low starting price of foreclosed properties, and buy a newer home to simply put it right back on the market without spending a dime!

On the flip side, there’s a whole lot of homeowners who are more or less stuck in today’s real estate market. These homeowners may be under water, and their mortgages may be looming over them as they wish they could upsize or move to a different location. For these buyers, I always suggest that they open their minds to think creative and be creative. Recent communication from the President may possibly bring good things for buyers – such as the ability to refinance an underwater loan, or even qualify for a principal reduction – but I wouldn’t bank on it. The government programs I’ve seen come up in the past few years have been less than successful. I would urge you to consider your options and meet with your lender to sit down and sketch out a two year or a five year plan. I believe that interest rates will stay low, and prices will be great over the next few years. Don’t lose faith – you haven’t missed the boat of the right time to buy just yet. If you need a lender referral, I’d be happy to provide some I’ve come to trust and respect.

It’s not all doom and gloom, and I hope that 2012 will bring positive changes – either by enacted legislation, or by an improving market. Be proactive and take this time to pay down your principal. Skip a few cups of coffee each month and put a few extra dollars towards your principal. Set a goal for yourself – you’ll end up paying down your mortgage faster than you think. Then, once you’ve met your goals, consider refinancing and keeping your current home as an investment property while you move into something you’ve been dreaming of. Your lender would be the best point of contact to help you sketch out these goals, and I’d be happy to help in any way you see fit. Good luck!

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