— A new breed of “bad apple” is emerging from the real estate sector, one that has made it harder for buyers to find bargains on the secondary market, but one that may make some buyers feel more confident buying their own homes.
The real estate industry is bracing for what is sure to be a bad apple, said Richard A. Lunsford, a senior vice president at brokerage Apartment List.
This is a new breed that is out there, but it’s not very well known and it’s definitely not a household name, Lunsfield said.
It’s definitely something that is new, and it can be difficult to differentiate between the two.
Lunsford said the new breed is likely to attract some high-end buyers looking to get into homes that are in the higher-end of the market, which will lead to higher prices for homes in those areas.
In fact, the average home in the top 10 percent of price ranges in the region, including Sacramento, will average about $2.6 million, Lobsford said.
The average home will also cost about $500,000 in Sacramento.
Lunsfield, who is also a vice president for the National Association of Realtors, said some of the new buyers will be the same buyers who are the targets of an anti-trust investigation by the Department of Justice and will not necessarily have the money to get the homes appraised.
The DOJ probe into the real-estate industry is ongoing, but in the meantime, Lonsford said it is very difficult to tell who the new “bad apples” are, especially if the “bad” apples are located in the Sacramento area.
“I think a lot of people have seen the bad apples and have come away from that knowing that there’s a problem,” Lunsfords said.
Linsfield said many buyers have noticed that the “bargain” that has become available in the market has gotten tougher, as buyers look to find a home that is on the lower end of the range.
“There’s a tendency to overvalue and to underestimate what a home really can be, and that’s something that we see across the country,” Linsfords added.
“That is why a lot more buyers are choosing to look for properties in the lower-end market, as opposed to the higher end.”
Linsfolls said many of the sellers of homes on the market are looking to buy homes that would otherwise go to buyers with a larger down payment, but the sellers who have seen their properties go for less will likely be more cautious.
Lonsford added that the new, high-priced homes may have a lot in common with other real estate markets.
That means that they are a reflection of the trend, not the trend itself, he said.