Sacramento Real Estate Views

2009 Sacramento Home Sales Report

Average Sales Price Increases 18%

While it’s difficult to look at these numbers and not think about the amount of homes that are likely to come on the market this year ruining what gains have been in 2009, let’s be grateful for the year we had as bad as it was.

It could have been worse.  I think.

I have been hearing rumors about the number of available homes for sale increasing and have seen a slight increase over the last few days.

As of this writing, there are 5536 single family detached homes on the market which is an increase over the 5400 homes that were on the market just last week.

The public perception that I’ve heard in coffee shop conversations is that there are an enormous amount of homes on the market for sale.  This is not the case as the numbers show.  In fact, to me, a couple thousand more homes on the market would give us a little breathing room and buyers more choices.

The average sales price in Sacramento rose 18% in 2009 according to month to month data obtained from Metrolist, Inc., the Realtor MLS serving the greater Sacramento region.

December was the highest month of the year at an average sales price of $184,266 and February was the lowest month at $155,540 for a 3 bedroom, 2 bath home of 1516 square feet single family detached home.

More Value To Lose?

This is not going to be a “recovery” year for the housing market in the Sacramento region.  There are just too many variables out there that have the potential to make 2010 just the same as 2009 and potentially worse.

One thing we can be grateful for is that I’ve heard no one say that the total number of homes for sale at any given time will go down.  There will be homes to sell this year based on what I’m hearing.

If the inventory numbers increase significantly, expect there to be a value drop region wide.

While the lower price points, below $200K may be insulated, the higher to mid range price points may have further value to lose.

Variables At Play

From the failed Loan Modification program to the “shadow inventory” coming on the market to people just flat walking away from their homes and renting, our housing market has a couple of years before we’ll see recovery or a “normal market”, whatever that is.  Some economists think we’ve yet to see the bottom of the market.  In some price points, especially above $300K. I agree with this based on all factors.

The upper end market will take a beating this year yet again and I believe that even communities like Folsom, where values have been miraculously sustained, will be affected in greater degree this year.

Good Year For Investors?

Could be.  It depends on what you’re looking for.  Most of the investor clients I’m working with are discouraged that there aren’t more choices and that the price points in the lower ranges have crept up almost out of the investment criteria they’ve established and been successful with.

If you’re looking to 1031 some money into nicer communities, I think you’ll get some great bargains region wide but again it really depends on what you’re looking for.  While there are similarities, not all investors are looking for the same opportunities.

Rents have been stable to dropping a little in 2009 and I don’t see that changing in 2010 depending on how many homes come on the market, are sold to investors and converted into rentals.  The job market being what it is, the demand for rentals isn’t high but at this point it isn’t suffering either at least in the single family detached market.

There shouldn’t be any major surprises in 2010, at least as far as I can see.  Unless the government intervenes to further delay the recovery again, we should be progressing toward a recovery of our market in the next couple of  years.  What that recovery will look like is anyone’s guess.

Just hope it’s better than what we’ve seen over the past couple of years.

Thanks for visiting!

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Tags: homes for sale sacramento

This entry was posted on Tuesday, January 12th, 2010 at 8:19 am and is filed under Home Sales Reports. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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