Expert tips for buyers and sellers in Sacramento’s competitive real estate market

If you’re a potential buyer touring a house that’s for sale, don’t criticize the home while you are in it, don’t act too excited, and don’t talk about how much you’re willing to offer while standing out front.

That’s because you may not be alone. Increasingly, sellers have recording equipment in their homes, from Alexa devices on the bookcase to Ring video recorders on the front porch, and they may be listening in.

“I tell my clients, ‘Just keep your comments to yourself,’“ says Yuri Ramirez-Villanueva of eXp Realty in the Sacramento area. Wait until you’re in the car or back at the office to offer opinions or talk money. “It’s safe to assume everyone has a camera or recording device in their home ... they are probably listening.”

Ramirez-Villanueva’s tip was one of hundreds of insights offered last week by seven Sacramento-area home real estate experts during Sacramento Bee Real Estate Week, a series of five recorded webinars currently offered for viewing on The Bee’ website for Bee subscribers. The full list of the real estate videos can be found on The Bee’s website.

The series of exclusive conversations, entitled “Your guide to the craziest housing market in 15 years,” takes place in five videos, each about a half-hour long, and each focused on some aspect of the Sacramento regional housing market.

Here is a quick listing of what the Sacramento Bee and its guests discussed each day:

Day 1 - An inside look at how Sacramento’s real estate market works

Real estate analyst Ryan Lundquist kicked the week off, offering behind-the-scenes data that show what’s happening right now in the local market, including new numbers that show the first signs the area’s red-hot price increases have cooled off.

The median sales price of homes in the region eased slightly in July and early August after rising more than 20% in the last year.

“We are seeing normal (seasonal) slowing,” Lundquist said. He and other Bee panelists say they project Sacramento home prices to remain roughly steady over the next few months.

Sellers still have the upper hand, Lundquist said. He offers several charts that explain what makes this such a sellers’ market, including new data on what percentage of home sales are going for more than the asking price.

“We are still having one of the most aggressive markets we have ever had,” Lundquist said.

Day 2 - Is the Sacramento home price bubble about to pop?

No, the price bubble is not going to pop, says Dean Wehrli, whose job at John Burns Real Estate Consulting involves advising home builders and institutional investors on what the market will do next.

Bringing his expertise to regular buyers and sellers during day two of the Bee’s real estate week, Wehrli detailed the four key reasons analysts believe today’s high prices are here to stay, albeit with the possibility of a slight dip as buyer’s earnings catch up with house prices.

That includes a detailed discussion of key underpinnings of the local market: mortgage interest rates, millennial buyers, Bay Area emigrees coming to Sacramento to telework, and the continued low rate of new housing construction.

He also offers his two fundamental reasons why it may not make sense for Sacramentans to move to Boise or Austin in search of cheaper real estate.

Wehrli cautions against the FOMO – fear of missing out – that led to a frenzy of home buying this spring, but also said waiting in hopes of a real estate market collapse will be futile.

“If you are waiting for prices to collapse, it is not going to happen,” he says. And if you buy, “you may have to settle for less than your ideal.”

Day 3 - How to buy a home in today’s hyper-competitive market

Realtor Yudi Ramirez Villanueva and real estate company owner Tim Collom discuss the first mistake that potential home buyers make these days that practically assures they will lose out on the first house they want to buy.

The pair offer guidance on why it is essential to pre-qualify for a loan before they begin their house shopping. They also discuss negotiating tactics when involved in a bidding war with other buyers, and offer their take on whether or not it is smart for buyers to forego having a home inspected before they make a bid.

“I won’t say it is reckless,” Collom said of the growing trend to do away with the home inspection contingency. But it can be risky. Buyers who skip the home inspection “are outside their comfort zone.”

Collom offers his general guidance on whether or not to offer more than the asking price, and how much more, depending on how many other bidders are in the running.

Day 4- Selling your home? How to get the best price

Broker Associate Erin Stumpf and Realtor Kelly Pleasant talk about whether sellers should price their homes higher than the regular market price in hopes of capturing the so-called “unicorn” buyer, that Bay Area resident who shows up with $1 million in their pocket willing to overpay for a house.

Those buyers in fact do exist, Pleasant said, but it is usually a mistake to focus on them.

“If you are in a ZIP code where that yields that type of demand,” he said, “then that is something to look at but it is situational. I say you want to price it for the masses, not for the unicorn.”

Stumpf says if a “unicorn” shows up among the bidders for your house, fine, but “that is the exception to the rule. Don’t try to price for the unicorn because you will eliminate most of the potential audience for the house.”

The pair also tackle the question of why there are so few people putting their homes on the market, despite high prices.

“I suspect COVID has had a great impact on keeping homes off the market,” Stumpf said. “A lot of people are uncomfortable having people in their homes.”

Day 5 - First-time homebuyers: How much home can you afford?

Brandon Haefele, CEO/President of Catalyst Mortgage, guides first-time home buyers through the steps they need to take to pre-qualify for a loan, and importantly, to decide just how much of a house they can afford to buy.

He suggests potential buyers start on that process of shopping for a loan months before they begin house hunting. Borrowers are much less likely to get into financial trouble now than they were a decade ago because the qualification process involves more steps and more proof of financial wherewithal than in the years leading up to the real estate crash in 2007.

“You pretty much need a DNA sample, I tell clients,” Haefele said. “We have truly sound, quality mortgage loans that are being written. It is truly apples to oranges.”

Haefele offers his take on how to shop for a mortgage loan among local mortgage brokers, banks and online mortgage companies. And, he talks about grant programs, down-payment assistance programs, and how much of a down payment a person may want to include in the purchase deal.

How high does your credit rating need to be? It depends on the situation, he says, but it could be as low the low $500,000s or as high as $620,000, he says.

This story was originally published September 3, 2021 at 12:00 PM.