Sacramento Is California’s Newest Real-Estate Hot Spot

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Price cuts have been replaced by bidding wars. A once-sleepy downtown is flush with urban-renewal projects. A luxury condo tower with penthouses priced over $4 million is under construction. Sacramento, Calif., long seen as a fairly bland government town, is in the midst of a real estate boom.

When Suzanne Greer listed her six-bedroom home just outside of Sacramento last month, so many potential buyers showed up to the three-hour open house that her real-estate agent had to extend it by two hours. Offers started coming in that evening. Eight buyers entered a bidding war.

“We’ve been here 17 or 18 years and have never seen it like this,” says Ms. Greer, who, with her husband, owns a commercial air conditioning business. She sold the home for $40,000 over the $799,000 asking price—plus two months of free rent so she doesn’t have to move out right away while she builds a new home nearby.

Houses are moving fast. Homes in Sacramento have been selling in an average of 34 days—six days faster than they were at this time last year, and 28 days faster than the U.S. overall.

It is a dramatic turn of events for a city that just a couple of years ago was still struggling to pull out of a deep housing slump, even as other markets in California surged. Sacramento is finally seeing the kind of downtown resurgence that is been happening in cities across the U.S. over the past 10 to 15 years. And the region is partly benefiting from some spillover as San Francisco and Silicon Valley’s tech boom brings skyrocketing prices and a housing shortage, pushing buyers to look further afield.

bout an hour-and-a-half drive northeast of the Bay Area, Sacramento remains relatively affordable. The median price a square foot of a Sacramento-area home is $228, compared with $531 in the Bay Area.

If current trends hold, Javier Vivas, manager of economic research for Realtor.com, predicts that Sacramento prices will rise 7.2% thisBN-TP140_SACRAM_P_20170524153605 year over last year, compared with a national average of about 3% over the same period. San Francisco prices are forecast to rise by 8.4%. (News Corp., owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.)

Nick Sadek, a real-estate agent with Sotheby’s International Realty, says about a third of his buyers come from the Bay Area. One client, who works for Google and is able to work remotely, sold his small home in Menlo Park for $4 million and bought a 3,800-square-foot home in a Sacramento suburb for $1.3 million.

Raleigh and Nan Klein sold their home in Alameda, near Oakland, last year to buy a home in Davis, 20 minutes outside of Sacramento. After 30 years, the empty nesters say they were tired of the Bay Area’s congestion and looking for an easier place to live.

“We were looking for somewhere we could walk and bike a lot,” says Mr. Klein. In December, they purchased a two-bedroom home with a den in the Cannery, a new-home community set up around an urban farm that is bikeable to town. Though the couple declined to say what they paid for their homes, similar models start in the $700,000 range.

Developers are betting big on a revitalization of the city’s downtown, which is pocked with seedy areas and long offered little beyond offices and the state capitol building.

MN-AO891_SACRAM_P_20170524153036A partly vacant West field mall has been mostly dismantled to create Downtown Commons, an 11.8-acre pedestrian-friendly residential and commercial plaza. Developed by the NBA’s Sacramento Kings and JMA Ventures, it includes offices, shopping and the new Golden 1 Center, the only indoor/outdoor NBA arena that is 100% solar-powered (and boasts an $8 million Jeff Koons sculpture). Nearby, a local developer is turning a 100-year-old bank building into a 30,000-square-foot upscale food hall. Local developer LDK Ventures is turning an old 140-acre rail yard into a development with a Kaiser hospital, a Major League Soccer stadium, offices and housing.

One of the most ambitious residential projects is the Residences at the Sawyer. Offering city and river views, as well as room service and a concierge, the condominiums are breaking new ground in pricing and amenities. Set on top of a new 250-room Skipton Hotel, condos also come with VIP access to Golden 1 Center, a private lounge and a pool and terrace overlooking the arena. One-bedrooms start at $600,000 and three-bedroom penthouses with over 3,300 square feet go up to just over $4 million, says director of sales Christopher Miller, of the Agency Development Group. The building, part of Downtown Commons, is expected to be completed in late 2017.

For more Information: Candace Jackson

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Noisy Construction in the Building

Q. A shareholder in our co-op is combining two apartments. For the past six months, the construction has made our lives miserable, tying up the elevator and disrupting any quiet enjoyment on weekdays from 8 a.m. to 5 p.m. The board and the managing agent have shrugged off the concerns of shareholders, and we are at our wits’ end. Is there anything to be done?

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A. The co-op may have signed off on renovation plans, but that does not give your neighbor license to make everyone else miserable. “They can’t just do anything,” said Ingrid C. Manevitz, a partner at the law firm Schwartz Sladkus Reich Greenberg Atlas.

Your neighbors cannot create unreasonable noise. If they do, and the board fails to intervene, then you might have a claim against your neighbor and the building, Ms. Manevitz said. To prove that it is unreasonable, you could hire a consultant to measure the noise. Armed with that evidence, you may be able sue the building for violating the proprietary lease, the warranty of habitability and your right to the quiet enjoyment of your apartment. As for your neighbor, you may be able sue him for creating a private nuisance.

But litigation is expensive and grueling. Do any of us really want to get embroiled in a lawsuit with our building and neighbors? Gathering evidence of excessive noise could help you, even if you don’t sue: You could bring it to management, urging them to address the problem properly.

Consider the long view. Your neighbors will, eventually, finish the renovation. But this won’t be the last time someone takes a sledgehammer to a kitchen. “Many of my clients have endured renovations by neighbors before they proceed with their own,” said Paul Barnla, the founder of Artistic License Interiors, a contractor based in Brooklyn. “It’s a bit of a rite of passage and a trade-off for living in the big city.”

To prepare for the next big project, get more involved with your building and perhaps run for a board seat. With a leadership voice, you could influence how projects are handled. The board could revisit its standard alteration agreement, enacting stricter rules about how a contractor works and limiting hours (or even months of the year) when work can be done.

For More Information:- RONDA KAYSEN

Residential real estate : Sales, median price both up

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Millennial will have a limited supply of single-family homes to pick from as median home prices continue to rise and supplies of homes continue to be tight.

Realtors sold 609 single-family homes during March, the third greatest number during the past 12 months and highest since August, according to the Ocala/Marion County Association of Realtors. The data does not include homes sold by owners.

The number of closings during March was 12.4 percent higher than during March 2016 and up from February, when only 438 Realtor sales were recorded.

Along with more homes sold, the median sales price also rose to $142,000, up 11.6 percent from March 2016 and the highest since at least 2013. The year-over-year percent increase for the past 12 months has been in the double digits, with the greatest leap in January, when the median sales price increased 31 percent compared to the year before.

“I think we have healthy growth right now,” said Vicky Morrison, vice president of the Ocala/Marion County Association of Realtors. “And it’s growing steady and the prices are getting back to a normal market.”

Morrison is also the broker and owner of Bricks and Mortar Real Estate and Development.

Also reflective of a healthy market is the sales price in comparison to the original asking price. The median sales price for March was 96.2 percent of the original asking price. That was a 2.3 percentage points better than the same month in 2016. The 96.2 percent was the highest percent of the asking price since at least January 2013.

This is a good indicator of the recovering market, as buyers realize the market is starting to favor the seller.

Some of what’s driving the market could be more people moving to Marion County, Morrison said. She thinks new businesses setting up distribution centers here, such as Auto Zone and Fed Ex, are having an impact.

“Now we’re seeing a reflection in the housing market,” she said.

As sales numbers increase, the inventory of existing homes for sale is not keeping up with the demand. The inventory of active listings during March was 2,730 homes, a drop of 16.8 percent compared to March 2016. The consecutive year-over-year drop in inventory has been in the double digits since September 2016.

 

For More Information:- Fred Hiers

Foreign Banks Reduce Lending to U.K. Commercial Real Estate

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North American banks cut new lending for U.K. commercial property by more than half last year as a market slowdown reduced the number of big deals being done.

Banks focused more on refinancing existing loans than extending new credit, a trend that favored domestic firms, according to a survey of 77 lenders by De Montfort University. U.K. banks and building societies were the only group to record an increase in lending in a market hurt by the vote to quit the European Union.

North American banks active in the U.K. are generally focused on providing acquisition finance in larger transactions, of which there were far fewer last year, partly because of Brexit,” Jon Rickert, investment director at money manager GAM Holding AG, said in an interview.

The weakness of Britain’s commercial mortgage-securities market also prompted a “general rethink by several North American banks around the resources they want to commit to the U.K.,” he said.

Lenders from across the Atlantic extended 3.3 billion pounds ($4.2 billion) in new credit to British commercial property deals in 2016, down 56 percent from the previous year, according to De Montfort’s survey, published Thursday. German and other international banks cut new lending by 18 percent and 25 percent, respectively.

U.K. commercial-property investment shrank by more than a quarter last year with investment at the lowest level since 2012, researcher Costar Group Inc. said in February. The overall volume of new loans fell 17 percent to 44.5 billion pounds, with uncertainty in the run-up to the June 23 referendum on EU membership weighing on first-half activity, according to De Montfort.

New lending for acquisitions no longer accounted for the majority of the market last year. Banks also became more conservative about where they were willing to extend credit, with 48 percent of commercial-property debt secured against central London real estate, the most in at least 12 years, the survey showed.

For More Information:- Jack Sidders

Clearer process needed in hot Toronto real estate market, Tory says

Officials hint that new rules and tougher penalties could help in the drive to cool the market.

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Mayor John Tory and Ontario Finance Minister Charles Sousa have hinted that changes to real estate industry practices could be part of the solution to cooling — without killing — the over-heated Toronto housing market.

While he wouldn’t provide specifics, Tory said there needs to be more transparency in real estate transactions.

Asking prices for homes rarely reflect their true value and desperate consumers are subject to bidding wars often with little to no information on the number or the nature of competing offers, he said.

“How could that do anything but contribute to the frothiness of the real estate market and the frenzied increase in prices,” Tory told the Toronto Star on Wednesday.

He also said he is concerned that home buyers are being pushed to waive conditions such as home inspections, on their offers.

Some Toronto realtors say it’s common for the successful purchaser in competitive bidding wars to far exceed all the other offers on the table. Buyers can’t know what the competition is offering. Only the seller sees all the offers and realtors aren’t permitted to disclose that information.

Ontario Real Estate Association (OREA) CEO Tim Hudak is calling for an overhaul of the 2002 provincial rules and code of ethics that govern real estate practices.

He says the majority of realtors are honest and ethical. But there are problematic practices including double-ending sales, says Hudak.

Double-ended sales, where one agent represents both the buyer and the seller, means more commission for the realtor and can potentially shut out competing offers.

Hudak called for tougher regulations and penalties for agents who break the rules. In a hot market, penalties meted out by industry regulator the Real Estate Council of Ontario (RECO) can be just the cost of doing business, he said.

RECO registrar Joseph Richer said “If there is a call for greater fine level, certainly we can look at that.”

But in any market situation where there is more demand than supply, some people will take advantage, said Richer.

“When you have 10 or 20 people knocking on your door to buy your house, I’m not sure what the individual (realtors) could be doing to drive prices higher,” said Richer.

RECO fines range from about $5,000 to $25,000.

Toronto realtor David Fleming has called for more severe RECO penalties for some rule breaches. But on Wednesday, he accused the mayor of politicking.

Fleming said, the “easiest, slam-dunk policy change” to cool the Toronto market is a non-resident foreign buyers tax that Premier Kathleen Wynne was expected to announce as early as Thursday.

Foreign buyers “are getting rich off our backs and the hard-working, tax-paying Canadians that live here can’t afford real estate,” said Fleming.

The Toronto Real Estate Board referred questions about unethical or improper business practices to RECO.

“TREB members adhere to a strict code of ethics as set out by RECO, and TREB not only welcomes a review of the Real Estate and Business Brokers Act but has officially asked for it,” said the board’s CEO John DiMichele in an emailed statement..

For More Information:- John Tory