First Quarter, 2011

Wright Report

THE WRIGHT REPORT

Trends in Investment Real Estate in the Greater Sacramento Area

The State of Investment Real Estate in the Greater Sacramento Area (Sacramento, Placer,
Yolo, and El Dorado Counties) including statistics and trends affecting the Residential Real
Estate Market, Investment homes, duplexes, triplexes, and fourplexes.

First Quarter 2011

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The Wright Report

Prepared by:

Edited By: Joel Wright

Document Version: Final

Last Updated On: May 26th 2011

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This work is licensed under the Creative Commons Attribution-ShareAlike 3.0 Unported
License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco,
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TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................................... 4

EXECUTIVE SUMMARY:.................................................................................................................... 5

THE EXPERTS WEIGH IN: .................................................................................................................. 6

Sacramento Appraiser: (Ryan Lundquist) ............................................................................... 6

Local Building Association: (John Orr) .................................................................................... 8

Real Estate Attorney: (Steve Beede) ....................................................................................... 8

SPOTLIGHT: Sacramento’s Declining Market ................................................................................ 10

MARKET UPDATE: .......................................................................................................................... 12

FINANCE & BANKING: .................................................................................................................... 16

DISTRESSED PROPERTY:................................................................................................................. 18

NEW CONSTRUCTION: ................................................................................................................... 21

INVESTMENT PROPERTIES: ............................................................................................................ 21

MULTI-FAMILY UNITS: ................................................................................................................... 22

ZIP CODE STATISTICS – Changes in price sold by zip code ............................................................ 24

SACRAMENTO MEDIAN PRICE CHANGE CHART ............................................................................ 25

HISTORICAL PRICES BY ZIPCODE .................................................................................................... 26

RESOURCES AND METHODOLOGY: ............................................................................................... 43

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EXECUTIVE SUMMARY:

Media outlets tell the world that the United States’ economic
“recession” ended June 2009, but residential real estate prices are still
being pounded. The predicted double dip in real estate prices is
occurring and economic forecasts point to even lower values to come.
Sacramento, despite having peaked before the rest of the nation by
two years, may not yet have reached bottom.

Consumer’s need to buy real estate seems to be on hold even as

interest rates remain at historic lows and affordability is at all time
highs. Many consumers who want to purchase are finding it difficult to
get loans. Lending requirements have tightened tremendously making
it difficult to qualify for a home loan; and many homeowners who lost
homes are sitting on the sidelines waiting to be able to qualify again.

Even with low sales prices and even lower interest rates, consumers
are emotionally hesitant to pick up the buying pace out of concern for
their employment, continued real estate price drops, and economic
and political instability.

The banks seem complacent with this slow moving market as they
restructure and streamline, and do what they can to can manipulate
REO inventories so it does not sink their bottom line. Ultimately home
sales are the only permanent method to liquidate bank inventories and
shift our financial and housing markets to stability.

All signs point to a 4 to 5 year recovery timeframe for the U.S. housing
market, which may be even longer for Sacramento due to the state’s
current unresolved fiscal crisis.

However, this is a unique opportunity for homebuyers and investors

willing to brave uncertainty. The market is rapidly changing and the
returns are more lucrative than any time in the past decade. As prices
continue to drop, cash flow rises, and investors can increasingly buy
better deals for lower prices to get even higher returns.

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THE EXPERTS WEIGH IN:

Sacramento Appraiser:
Property values have been skidding downward in the Sacramento area
so far in 2011. Despite positive news that the percentage of REOs has
decreased and short sales have increased, the level of distressed sales
overall is still very high in most communities in Sacramento – and
tending to drive the market. It’s not uncommon to see the total
number of distressed sales (REO + Short Sales) to be 60-75% of all
sales in a given area. For example, over the past year in Elk Grove,
73% of all sales were either bank-owned or short sales. This figure is
an improvement from two years ago when 86% of all sales were
distressed, but obviously the housing market is still in the thick of
attempting to recover.

One of the challenges of appraising in a market dominated by

distressed properties is filtering through all types of sales to determine
market value. Is there a difference in price level between foreclosures,
short sales and typical arms-length sales (including investor flips)? As
the graph indicates, regular sales usually do sell for more than
distressed sales. However, it’s honestly not easy to sift through often
conflicting market data and very few regular sales either. This has led
to some problems with appraisals where appraisers use only distressed
sales in their reports to supposedly demonstrate market value, which
according to Fannie Mae is “the most probable price which a property
should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller, each acting prudently,
knowledgeably and assuming the price is not affected by undue
stimulus.”

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Ryan Lundquist is founder and principal of the Lundquist Appraisal Company.

Based in Sacramento area, the Lundquist Company provides residential real
estate appraisals within 10 counties in the Greater Sacramento Region, and
serving brokers, banks, investors, governmental agencies, real estate agents,
attorneys, home owners, insurance agents and more. Lundquist Company
also provides home owners with property tax appeal services. Discover more
about Ryan Lundquist and his appraisal services at LunduistCompany.com or
his tax appeal services at SacramentoTaxAppeals.com.

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Local Building Association:

New home sales in the Sacramento region continued to show slippage
during the first four months of 2011, versus the same period last year.
The North State Building Industry Association tracks 81 new home
communities, or about two-thirds of the total number of new home
communities in the Sacramento Metropolitan Area. Sales were 28%
lower in the first trimester of this year over last. Among the major
challenges for homebuilders are the number of foreclosed properties
on the market, the obstacles potential homebuyers face in obtaining
mortgage loans, the high jobless rate in the area, and a general
feeling of uncertainty about the overall economy.

The slow pace of new home sales has resulted in fewer single-family
building permits being pulled during the first three months of 2011.
There were 49% fewer permits obtained in the first quarter of 2011,
compared to the same time frame last year.

For those individuals and families fortunate enough to be able to make

a new home purchase, prices have fallen to 2001 levels, and the new
homes of today are more energy efficient than at any time in the past.

John Orr has been President and CEO of the North State Building Industry Association
for 25 years. He is well respected throughout the industry and can be reached at
johno@northstatebia.org. The association's website is http://www.northstatebia.org/.

Real Estate Attorney:

Upside-down borrowers, frustrated with a lack of lender willingness

to modify their loans and desperate to keep their homes, often turn to
lawyers who promise to stop foreclosures and force lenders to modify
loans. But all too often what appears to be a meritorious Complaint
gets quickly thrown out by the Courts and the borrower ends up still
losing their home… plus thousands of dollars in legal fees.

Significantly, in these cases the borrower typically requests and is

granted a Temporary Restraining Order (TRO) to stop the pending
foreclosure sale. It appears as a quick victory. But a TRO is just a
short-term stoppage for approximately two weeks at which point the

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borrower must convince the court to grant a Preliminary Injunction

stopping foreclosure for the entire time it takes to get the case to trial
which could be two years or more. Here is where the lenders are
winning the war. Courts are refusing to grant the Injunctions and are
letting the lenders foreclose based on the following conclusions:

1. A Borrower has no right to sue a lender to force a HAMP

modification. California laws do not impose a duty to
modify a mortgagor’s loan.
2. A lender’s oral promise to extend a foreclosure is not
enforceable to alter their written right to foreclose.
3. Under California law there is no requirement to produce
the original note prior to completing a non-judicial
foreclosure.
4. MERS has a right to foreclose.
5. Just because the foreclosure notice was defective does
not give you a claim unless you can first prove you would
have and could have paid.

Bottom line for borrowers is that neither the Courts nor the legislature
are going to help them save their homes unless they can pay.

Steve Beede is a practicing real estate attorney in Sacramento. Prior to becoming

an attorney he invested in Residential Real Estate and he became a Broker. His
law firm, BPE Law Group, started in 1994 and specializes in Real Property Law
and Business Law. Steve can be reached by e-mail at sjbeede@bpelaw.com or
check out the company website at www.bpelaw.com.

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SPOTLIGHT: Sacramento’s Declining Market

The Sacramento housing market has been declining since August of

2005 when it hit the median price high of $392,250. This has not
always been reflected in the statistics and median price because of the
nature of the continued decline.

This graph shows the average price dropping to a low of $187,795 in

March 2009. Then rebounded two times with the Federal Tax Credits
in December 2009 to $212,444 and again in June 2010 at $215,710.

The median price hit bottom at $167,000 in February 2009, only to

rebound up to June of 2010 at $194,000 and then to fall lower than
2009’s low point to 166k in March of 2011. These observations,
however, do not show how the market continued to decline even while
the median and average prices rebounded.

The two graphs show the average sales price by seller type –
Conventional (traditional seller), Short Sale, and REO (bank owned
foreclosure). It trends downward and while REOs hit their bottom in

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2009 and rebounded upwards they also accounted for 74% of

purchases in the market place. In March 2011 REOs account for 48%
of sales, a 35% drop. During 2009 the moratoriums placed on Bank
Trustee Sales reduce the number of foreclosures resulting in an
inventory drop from 2,231 in November 2008 to 592 REOs for sale by
June of 2009.

Since that bottom price point for REOs in Q1-2009 the sale prices for
Conventional and Short Sales properties continued to decline, while
the price of REO’s rebounded upwards with the reduced inventory.

When prices leveled off in 2010 Sacramento seemed to have found its
sales price comfort level near $180,000. It was as if 180k was what
buyers felt was a good price to pay for homes. What was not seen
from the 2.35% drop in median price from January 2010 to March
2011 was that while the average price of homes adjusted down just
.3% the value of property dropped much more dramatically.

The price/square foot dropped 8.9% and the amount of square footage
that could be purchased for that comfortable “median sales price” rose
4.6% through the same 15 month period. So as prices of homes went

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down slightly, the price/square foot got cheaper and the size of home
you could buy dramatically increased, ie. more home for your dollar.

If we have not reached the bottom yet in Sacramento, it is uncertain

when we will; especially with the State Government’s looming financial
woes. The quick fix did not work…, the recovery will take some time.

MARKET UPDATE:
National Update –

Across the U.S. the median home price in March 2011 was $159,000,
5.9% lower than March 2010. 40% of homes sold were distressed
sales (REO or Short Sale) and the market is projected to drop another
5% to 11% over the next year. Home ownership is also down across
the nation to 66.5% in Q1-2011 from over 69% in 2004 and 2005.

Home owners losing their homes end up moving to a rental which is

having positive impact upon commercial multi-family complexes and
storage units. REITs with these property types in portfolio are doing
quite well this year.

http://blogs.wsj.com/developments/2011/04/27/homeownership-rate-drops-to-
1998-level/

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Some economists project up to a 20% correction over the next few

years. The following graph of real estate prices adjusted for inflation
over the last century seems to show prices increasing commensurately
with inflation. This is used as evidence to predict a strong decline yet
to come in the market.

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

Some interesting concepts brought to light by this graph are whether

we can expect to return to the post war average around $110,000? Or
is this a transition period similar to the end of WWII (1945 – 1947),
where the market reset and found itself permanently changed by the
experience.

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This graph also emphasizes that although real property values

fluctuate dramatically over time, they seem to maintain their weight
against inflation. Given the Fed’s fiscal market repairs made by
Quantitative Easing 1 & 2, owning real estate may be one of the only
secure hedges against the inflation ahead of us.

Further argument for a continued drop in national real estate prices is

supported by the uncommonly high inventory in comparison with
demand (more than 1,000,000 homes more than usual) and
absorption of this excess inventory will take 4-5 years. Sacramento
has yet to experience this problem as inventories remain low, less
than ½ the CA average. High inventories of homes and the projected
reduction of distressed properties hitting the market throughout the
nation which in total will likely add up to more than 6,000,000 homes
going through foreclosure or short sale during this recession.

Employment also seems to be following this trend. While

unemployment remains high and little job creation occurs the
economic recovery is expected to take several years to return to the
historical average of 6% unemployment.

While the recession officially ended Summer 2009, we have not yet
seen the price bottom of the national housing market and the return to
the vibrant economy we so enjoy.

Local Update –

California’s median sold price in March 2011 was $286,510,

substantially higher than Sacramento’s median price of $166,000.
March’s median price in Sacramento County ($166,000) was down
8.8% from the previous year, and 7.3% drop from December 2010.
The average sold price (March) fell to $190,391 from $203,289 in
March 2010 – a 6.7% drop.

Affordability (the ability of the median income family to buy the

median priced home) is up across the state rising from 50% in Q1-
2010 to 53% in Q1-2011. Placer County saw quite a jump in
affordability from 58% Q1-2010 to 64% Q1-2011, and Sacramento

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rose from 68% to 71% during the same period. The number of
months of inventory in Sacramento is substantially less at 2.5 months
than the state’s average of 5.3 months.

Of all the purchases 29.7% paid cash, 34.4% used conventional loans,
and 27.7% were FHA buyers. The average days on the market was 74
days (though the median days was 49).

For Sale inventory at the end of Q1-2011 was almost identical to the
number at the end of the fourth quarter (6,800). However, the
number of REOs for sale dropped dramatically from 1,410 to 1,068
from December to March. This drop was compensated predominately
by increases in the number of short sales available, and secondarily by
the number of conventional sellers coming to market to sell as the
market heats up in Spring.

The breakdown by seller types for homes on the market at the

beginning of the quarter was as follows: 25.5% Conventional Seller,
21% REO, and 53.5% Short Sale. Of the properties that actually sold
during the quarter 29% were Conventional Sellers, 48% REO, and
23% Short Sale Sellers.

Here are the zip codes whose median price fell 10%+ during Q1-2011.

1 Month % Quarter % 1 Year %

Zip Code Change Change Change
95823 -10.1% -10.1% -20.5%
95831 -9.5% -10.3% -24.5%
95833 -2.2% -12.9% -14.6%
95655 -20.8% -15.2% -12.2%
95815 -10.5% -15.4% -25.2%
95628 -25.1% -16.2% -17.4%
95662 -4.2% -17.5% -17.1%
95841 -13.0% -18.7% -23.9%
95838 -5.1% -20.3% -22.1%
95822 -15.2% -29.4% -29.4%
95693 -17.1% -31.9% -17.9%
95683 -16.4% -32.2% -27.9%

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FINANCE & BANKING:

The big news in financing is consumer protection. Hundreds (if not

thousands) of changes have been made within the lending system and
the biggest one from 2010 was NMLS (Nationwide Mortgage Licensing
System). This is a new system of licensing with additional classes and
requirements for loan officers to make them more accountable.

Another important change within the last year are the requirements
added to and changing the HUD-1 disclosures. Unfortunately, instead
of creating greater clarity it generated more paperwork and confusion.

Already anyone trying to get a loan under $50,000 had better just get
hard money, as no lender can actually do the loan due to the
comparatively high costs associated with doing the loan and the red
flags raised on account of usury law for the originating company with
federal regulators.

Needless to say these new requirements are driving even moderately

committed loan officers out of business, and attrition numbers in some
offices are as high as 80%. The loan brokers that continue working
are some of the most dedicated and highly qualified in the field. Banks
are much less affected as their licensing requirements are not so
stringent.

Recently banking institutions have garnered a huge share of the

lending pie during this time with the 2 biggest (Wells Fargo & Bank of
America) accounting for 40% of loans done during Q1-2011, and the
top 10 banks doing more than 70% of loans nationwide. While it
might not be a monopoly yet, the “too-big-to-fail” are more than
20% bigger now and account for a huge portion of the nation’s
deposits & savings.

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http://www.thetruthaboutmortgage.com/wells-fargo-top-mortgage-lender-in-fourth-
quarter-2010/

Of these loans estimates of 90% are sold on the secondary market;

and realistically there is no secondary market, there is only Fannie Mae
and Freddie Mac – two quasi governmental organizations propped up
to the tune $153,000,000,000 (as of February 2011) that the
government itself is trying to divest itself of. Estimates are that these
two organizations will need upwards of $400,000,000,000 before they
can be dismantled and they will likely fed to the end of the decade.

In Q1-2011 Freddie Mac turned a profit of $676 Million, while Fannie

Mae experienced a loss of $8.7 Billion. I will write that again for those
who like zeros: That is a $676,000,000 gain for Freddie Mac and a
$8,700,000,000 loss for the American Taxpayer.

Some of the larger banks did okay this quarter. Citigroup reported $3
Billion dollars in income. Wells Fargo did a bit better with $3.8 Billion
dollars in revenue. Bank of America experienced what the media
stated was a “39% Drop in Income” when comparing Q1-2010 and
Q1-2011 by only making $2 Billion ($2,000,000,000) dollars in Q1-
2011. What they forget to mention is that 2 Billion is significantly
better than the $1.2 Billion dollar loss they took in Q4-2010.

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Interest rates remain at historical lows – under 5%, the historical

average is somewhere closer to 7-8%. After rising almost a whole
point to 5.5% dropped down after the end of the first quarter.

This positively affects the ability of buyers to buy, but it should be

remembered that rates (especially artificially low rates) will remain low
only so long, and must at some time return to reflect the risks
inherent in lending money. They will go up. When the inevitable
inflation and higher interest rates arrive, it will not matter if the prices
drop even further because the payment will rise with rates and the
ultimately costs higher.

DISTRESSED PROPERTY:

In the U.S. 40% of homes sold in March were Short Sales or REOs. In
California that number is 51% (32% REOs – 19% Short Sales). In
Sacramento County it is 70% (48% REOs – 22% Short Sales).

% of Distressed Sales to Total Sales –

March 2011
Distressed Short
Location REOs
Properties Sales
California 51% 32% 19%
Sacramento County 70% 48% 22%
Placer County 58% 31% 27%
El Dorado County 65% 42% 23%
Yolo County 61% 35% 26%

This is not surprising since CA accounts for 25% of foreclosures

nationwide, even though it is still beat by AZ & NV for the number of
foreclosures as a percent of the population.

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The price difference between REO Sales and Conventional Sales in

Placer County in March is $123,718 or 34%. In Sacramento County
that drops to $82,475 but still remains a 34% price difference relative
to the average Conventional Sale price of $238,173. Placer County’s
average Conventional Sale price is $360,731 and its average REO sale
is $237,014, a difference of $123,718.

In Q1-2011, 681,153 U.S. properties had a foreclosure filing on them.

That is a 15% decrease from Q4-2010 and a 27% decrease from one
year ago. California experienced 168,543 filings or about 25% of the
total.

NODs (Notice of Defaults) also saw similar drops with 197,112 notices
received during Q1, down 17% from Q4-2010 and 35% from Q1-2010.

In CA new NOD filings dropped off 15% from March 2010 to 28,032 in
March 2011, and NOT (Notice of Trustee Sale) filings dropped off
28.3% to 24,397. California still maintains an inventory of 231,000
homes with filings that have not yet gone to foreclosure, and another
112,000 homes in bank inventories.

California cities account for 11 of the top 20 cities with the highest
foreclosure rates: Merced being #2, Stockton #3, and Sacramento
#11 with one in 63 homes receiving a notice.

Sacramento County NOD inventories dropped to 5,496 in March 2011,

a 37% drop from March 2010, and the number of homes with NOT
(Notice of Trustee Sale – this is the notice of the auction on the
property) filed against them dropped 15.5% during the same period to
land at 5,478. The number of bank owned homes however, increased
15% from March 2010 to March 2011 to 6,498 REO homes. So the
1,068 homes on the market at the end of the first quarter represents
only 16.4% of the local REO inventory on the market.

March’s 835 sold REOs gives the banks 7.8 months of inventory on
their books. If you account for pre-foreclosure inventory of 10,974
and add the REO inventory you have 17,472 homes that make up the
distressed inventory in Sacramento County. Total numbers of Short

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Sales and REOs sold in March 2011 were 1,213 leaving the banks with
approximately 14.4 months of inventory of distressed properties to
work through.

While not all these pre-foreclosures will result in sales (some will be
modified or become current) it is still 9.9 months inventory if you cut
in half the number of NODs & NOTs that go to sale.

During 2010 more than 1,000,000 foreclosures occurring in the U.S.:

2011 projections are much lower. In Q1-2011 lenders foreclosed on
215,046 so the numbers will likely not hit 2010’s high. As the
numbers drop, and the market works through the glut of pre-
foreclosures and foreclosures, the number of homes lost to foreclosure
during the recession is projected to affect a total of nearly 6,000,000
homes across the nation.

http://www.benzinga.com/11/05/1084592/u-s-housing-market-6-million-final-stage-
forclosures-by-2014-guest-post

The total number of currently distressed properties is approximately

12% of the 32.9 million homes with mortgages on them. The total
number of properties with an NOD, NOT or foreclosure hit 3,825,637

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(more than 1,000,000 being foreclosures) and the number of new

notices file in March 2011 was 270,681.

There are also an estimated 2,100,000 mortgages with 90+ day lates
that have not yet received a foreclosure notice. This could mean a
total of nearly 6 million distressed properties currently across the
United States.

NEW CONSTRUCTION:

New home construction in Sacramento is still lagging at historic lows,

and while the number of new home starts rose in March it looks as if it
will be another difficult year for new construction.

In the first quarter 2011 there were 90,000 building permits pulled
across the nation, down 22% from Q1-2010. California accounts for
about 4,800 of those. Multi-family starts were up 23% over first
quarter 2010 with 36,900 permits pulled nationally.

INVESTMENT PROPERTIES:

During Q1-2011 4,201 homes sold for an average sales price of

$190,805. The average size of these homes was 1,712 square feet,
with a median lot size of .15 acres, and built in 1980.

A pro-forma analysis of SFR homes sold in Q1-2011 found 29%, or

1,284 of these 4,201 homes could provide positive cash flow when
rented. (See “Methodology” at the end of the report.) Pro-forma CAP
Rates for these cash flowing properties was 8.3% average, and the
average monthly cash flow was $181 per month.

Of these 1,284 cash flowing homes the average price was $94,490.

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Nearly $100,000 less than the total average sold price for homes
during the quarter. The average size was also nearly 500 SqFt.
smaller at 1,240 SqFt., and the average age was 1968, 12 years older
than the average sold home.

MULTI-FAMILY UNITS:

Of the 156 properties sold in Q4-2010, 40% were REOs, 37%

Conventional Sales, and 33% were Short Sales. The largest change is
Short Sales, up over 200% from the 16.2% of total sales in Q4-2010.

That is in stark contrast to active multi unit properties on the market

where REOs represent only 17%, Short Sales compose 27%, and the
rest are Conventional Sellers (56%).

(This graph shows the downward trend of prices from the low 200s
in January to under $150,000 by the end of March.)

Duplex: During Q1-2011 the number of duplex sales declined 15%

from 150 Q4-2010 to 127. They took an average of 66 days to sell,

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and the average sold prices was $160,791. That is 5.2% below Q4
average price of $169,637. The average price per unit is $80,396.

37% of sales are Bank Owned Sales (REO) and 26% are Short Sale
Sellers meaning that 63% of duplex sales are distressed properties.
This number of Short Sale sales is very interesting and signals a shift
in banking policy as historically banks have been very hesitant to
approve short sales on investment properties. It appears now that the
trend is shifting, and banks are allowing more of these short sales to
be completed instead of taking them back as foreclosures.

The pro-forma CAP Rate for duplexes is estimated at 7.8%, and the
estimated rents average $118 per month net income.

Triplex: The 1st quarter 2011 saw 6 triplexes change hands in

Sacramento County; a 40% drop from the 10 sold last quarter 2010.
The average sold price was $131,000, down 25% from the $175,400
in quarter 4. Pro-Forma monthly cash flow is $445/month when
rented, and the average Pro-forma CAP Rate is 10.8%. The average
Days on Market (DOM) was 102, and the average age of the
investment was 1924 (quite old compared to the rest of Sacramento).
Beware, for while the returns look good the age will play an important
factor in overall return and deferred maintenance can be generous.

Fourplex: 23 sold in Q1-2011 for an average price of $163,124. That

is $40,781 per unit, and 29.3% below the $230,821 price sold for Q4-
2010 (a huge drop over a 3 month period. The average age of the
investments was 1963 and the average time on the market was 35
days, 48% drop from last quarter. From the original listing until the
day sold the purchase price dropped 5.9% on average, meaning that
banks are getting more aggressive in their pricing from the beginning
of the listing for sale.

The average pro-forma CAP Rate was 11.2%, and the pro-forma cash
flow estimates a $586 per month projected net income. That is $146
per unit. About seller types: 52% were REOs, 26% were Short Sales -
so distressed properties accounted for 78% of sold fourplexes.

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ZIP CODE STATISTICS – Changes in price sold by zip code

Median

Zip Median 1 Mo Qtr 1 Yr Zip 1M Qtr 1 Yr
from Sold from
Code Sold Price


Code



Peak Price Peak
95605 $144,000 63% 30% -4% -18% 95816 $300,000 26% -11% -1% -17%
95608 $224,900 53% -5% -6% -24% 95817 $112,500 59% 125% -36% 50%
95610 $215,000 55% -2% 3% -15% 95818 $315,000 32% 11% -5% -14%
95621 $204,500 59% -7% -5% -17% 95819 $302,000 32% -4% -2% -20%
95624 $327,000 50% -5% -7% -4% 95820 $74,500 75% 3% -3% -22%
95626 $157,900 30% NA 59% 71% 95821 $173,500 50% -14% -20% 11%
95628 $194,900 58% -25% -16% -17% 95822 $89,000 72% -15% -29% -29%
95630 $179,900 41% -4% 2% -16% 95823 $103,393 69% -10% -10% -20%
95632 $86,000 60% 5% -9% -10% 95824 $77,000 71% 1% -7% -20%
95638 $170,000 0% 0% 0% 0% 95825 $155,000 57% 30% -9% 6%
95655 $153,750 53% -21% -15% -12% 95826 $159,500 56% 9% -3% -10%
95660 $129,000 71% 1% 3% -22% 95827 $145,950 57% 6% -7% -12%
95662 $202,700 55% -4% -17% -17% 95828 $129,900 63% 1% -5% -5%
95670 $225,750 63% 6% 0% -13% 95829 $215,000 49% 25% 8% 2%
95673 $310,000 65% 16% -3% -9% 95831 $249,000 49% -9% -10% -25%
95683 $247,500 67% -16% -32% -28% 95832 $115,000 62% 52% 15% -3%
95691 $250,000 49% 3% 1% -10% 95833 $135,000 64% -2% -13% -15%
95693 $182,600 66% -17% -32% -18% 95834 $171,000 60% 0% -5% -9%
95742 NA 0% 10% 15% -8% 95835 $210,000 57% -7% -1% -14%
95757 NA 0% 1% 0% -7% 95838 $74,000 76% -5% -20% -22%
95758 $202,700 64% 0% -5% -13% 95841 $126,200 64% -13% -19% -24%
95814 No Sales 0% 0 0 0 95842 $110,000 67% 7% 0% -23%
95815 $63,000 79% -10% -15% -25% 95843 $165,600 59% 0% -2% -15%
95864 $329,000 36% -29% 33% 29%

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SACRAMENTO MEDIAN PRICE CHANGE CHART

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HISTORICAL PRICES BY ZIPCODE

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RESOURCES AND METHODOLOGY:

ABREVIATIONS

CAR = California Association of Realtors

HAFA = Home Affordable Foreclosure Alternative

HAMP = Home Affordable Mortgage Program

MLS = Multiple Listing Service

NAR = National Association of Realtors

NOD = Notice of Default

NOT = Notice of Trustee Sale

REO = Real Estate Owned by a bank, or foreclosure

SAR = Sacramento Association of Realtors

WRE = Wright Real Estate

METHODOLOGY

All properties of a given type were downloaded from the MLS and separated
by Seller Type and analyzed to achieve the highest degree of accuracy. The
following assumptions and estimates were used in the calculation:

· Appreciation = No appreciation has been included in our estimates, though

it will certainly occur.

· Cash Down Payment = 25% of purchase price

· Closing Costs = 4%

· Initial Repairs = repairs at purchase have not estimated at $5,000.

· Insurance = .4% annually (divided by 12 for monthly estimates)

· Interest Rate = 6% amortized over 30 years

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· Maintenance = these repairs vary dramatically by home, therefore we have

provided an estimate based on gross rents and adjusted up or down
according to the age of the home.

· Property Management = 10% of gross rents. An adjustment (1/2 of 1

months rents) has also been factored in for rent up every 2-4 years
depending upon the zip code.

· Rents = projected based on our internal findings for each zip code and
adjusted based on the number of bedrooms (SFR) or number of units.
Therefore, estimated rents for Duplexes, Triplexes, and Four-Plexes vary
by property type and zip code, and SFR rents vary by number of
bedrooms and are adjusted by zip code.

· Taxes = 1.25% of the purchase price annually. Although this number

varies the amount is not significant.

· Vacancy = like maintenance has been adjusted according to the area and is
factored into the equations. 5% of gross rents

ADDITIONAL RESOURCES

MetrolistMLS.com - to search for properties. www.metrolistmls.com

NorthState Building Industry Association (BIA) www.northstatebia.org
Rental Housing Association (RHA) www.rha.org
Ryan Lundquist, Appraiser www.lundquistcompany.com
Sacramento Association of Realtors (SAR) www.sacrealtor.org
Steve Beede, Attorney www.bpelaw.com

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Serving the Sacramento Area since 2004.

Check out our BLOG and additional STATISTICS on the web at:

www.WrightRealEstate.US

For FREE Information and Consulting Services contact us:

Office: 916.726.8308 Info@WrightRealEstate.US

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