Sacramento real estate market... ?!? ;)

#1
Also some rent luxury homes or even condos where the hoops they may have access to are not private and therefore off-access.

Unless a player plans to be Sacramento for life they'd be foolish to invest in a permanent multi-million dollar home in the Sacramento area. First, or at least direct second-hand knowledge here.
 
#2
Unless a player plans to be Sacramento for life they'd be foolish to invest in a permanent multi-million dollar home in the Sacramento area. First, or at least direct second-hand knowledge here.
Not necessarily true. Lots of folks lost big on the heels of the last recession.

But sans recession, top end home prices have been increasing around the SAC area due to demand. Lots of folks moving from the Bay and SoCal looking to escape a much higher cost of living. Because of that, the SAC area market has been strong for a while. Again, everyone lost ground due to the recession, none more than top end housing.
 
#3
Not necessarily true. Lots of folks lost big on the heels of the last recession.

But sans recession, top end home prices have been increasing around the SAC area due to demand. Lots of folks moving from the Bay and SoCal looking to escape a much higher cost of living.
Like I said, direct experience. Maybe we just got horrifically unlucky. But I've seen it happen in other locales as well.
 
#4
Like I said, direct experience. Maybe we just got horrifically unlucky. But I've seen it happen in other locales as well.
To be clear, not saying it doesn't happen. I know that it does. I know of folks that it has happened to. But all from the fallout of the last recession.

I'm sure prop values will be hurt by what's going on now too.

But prior to the recession things were going well and were back on that track until recently.

My POV is influenced by several real estate agent/brokers in the family. They've historically been seeing SoCal and Bay area transplants moving up here and putting down significant capital on multi-million dollar homes. And since there are more and more folks escaping those higher priced areas, the demand hasn't stopped and the values still good in re-sale. Except in times like now and the last recession.

Sorry to hear about your direct experience. Hopefully you'll be more fortunate next time around.
 
#5
Sorry to hear about your direct experience. Hopefully you'll be more fortunate next time around.
Hopefully nobody who I have a direct financial relationship with ever buys that type of property again. I didn't like it when it happened and I hated it when they realized what a money pit it was.

My family does include some high end brokers as well, they struggled to move this piece.

This was Gold River for whatever that's worth. Maybe other areas do better.
 
#7
Hopefully nobody who I have a direct financial relationship with ever buys that type of property again. I didn't like it when it happened and I hated it when they realized what a money pit it was.

My family does include some high end brokers as well, they struggled to move this piece.

This was Gold River for whatever that's worth. Maybe other areas do better.
Been following your convo. My two cents:

1. Real estate has some advantages, which makes it one of the better investments--interest on the mortgage is a deduction, cap gains is excluded on a primary residence (up to a point, at diff levels depending on whether you're single or married). If it is a rental, you can depreciate the property, which shelters the net rental income. We used to be able to write off property taxes, but that's been jumbled together with local taxes and capped at $10k. And should anyone be fortunate enough to inherit property, the prop taxes from your parents carry over via prop 13 and 58.

2. That said, the idea that real estate appreciation is linear is not true. As evidenced by what happens during recessions when home prices compress. And the focus on home prices alone is wrong--the focus should be on whether the owners are able to carry the debt service during recessions. If you can't pay the mortgage, the home gets taken away--along with your equity in the home.

3. I have a lot of close friends, who are in real estate. At pretty much every level of the supply chain--from realtors, to flippers, to hotel and Airbnb owners. I've fired a few of my real estate friends as clients over the last few years, because their view of risk was distorted by the 11+ year bull run in RE. Better to maintain the friendship than to argue over risk. Their expectations were distorted. Hard not to be distorted when everything you touch turns into gold in RE. The one common thing that I've noticed among them is that they end up doubling and tripling down in the industry (rather than diversifying away from it), which has unfortunately lead to a potentially catastrophic situation now when the economy has effectively grinded to a halt.

4. As for non-Sacramento residents buying Sac property. It's true. We almost bought a property in El Dorado in 2011. Should've since the property has appreciated 150% since then. Will likely buy in that area, should RE properties compress. Would like to have a place there because it's an hour or so from South Tahoe (usually takes us 2.5 to 3 hours to get to Tahoe) and it gives us a place to stay when we're visiting friends, fam, and going to Kings games.
 
#8
I am for the record generally pro-real estate. But not pro-statement homes that carry >10k month maintenance expenses and are now subject to the SALT caps. For whatever reasons I tend to hear about athlete's with custom homes that are very specific to athlete needs lingering a lot.

If your 4 million dollar home has a private basketball court and a private gym for example, a 10 car garage for your car collection and a recording studio for your solo rap career during the offseason it's going to have a very distinct appeal and not sell overnight. I do get that maybe that's a 10 million dollar custom home in SoCal - but again, how many athletes want to make their primary residence in Sacramento - vs. say Miami or Texas where the tax situation is favorable and there are hundreds of other pro-athletes living from multiple teams vs. a town with one major sports team?

And that to get the land for a big custom house like that you are going some place like Gold River, Folsom, Rocklin, Auburn, Elk Grove.

That's kinda what I'm getting at? If I were a pro-athlete I'd buy/rent the nicest place in mid-town or get something in the Fab-40s and go live elsewhere in the off season. Unless I was totally committed lifelong. Am I wrong? But in that case you are committed to using the team's practice facilities.