Sacramento Real Estate Views

The State of Sacramento Real Estate

2011 Year In Review – Sacramento County

I thought it would be a worthwhile exercise to pull up some statistical information and see how values as well as sales fared in 2011.  Generally speaking, we see a lot of national news on values but that is a composite number of all regions and doesn’t apply anywhere specifically.

While that may sound obvious, many people hang their hat on these numbers when in reality they’re meaningless and at best irrelevant.  Because real estate values tend to be hyper local, the only relevant information resides with local industry professionals.

All of the information below has been pulled directly from the Metrolist multiple listing service that serves the entire Sacramento region and covers single family homes only. (Thank you to Metrolist, Inc. for all of the fancy graphs)

Summary

Overall, most of the data shows that the bulk of the Sacramento region has lost anywhere from 2% to 8% of it’s value roughly speaking.  While that may or may not be 100% correct, what I think is most striking is the “leveling” off of prices region wide with a few exceptions.

Depending on the month, values were up and down all year long.  As the graphs will show, one month values were up and the next a little higher then a little down the month after that.

How the multiple listing service figures the percentage of decline or advance is by comparing the beginning month to the ending month in any report inquiry.  If the month in the beginning of the report was an up and the month in the end was down, this will give an over estimation of a decline in value with little compensation to what happened in between these two points.

I don’t believe this to be an entirely accurate view of the market so I’ve included all the graphs for each area in this summary of 2011 home values.

Citrus Heights Home Sales – Both Zip Codes

The average sales price bounced around from a high of $169K in January of 2011 to a low of $147K in April and July.  The yearly average was $156K.  Not a lot of variance in prices here.

Fair Oaks Home Sales

Fair Oaks home values bounced around a little more than other communities in our region.  The high for the year was in January at $303K and the low in September at $223K.  There was a substantial dip in values started in May at $269K and gradually slid down to $223K in September.  The average sales price last year as a whole was $253K.

Folsom Home Sales

The Folsom market has been very resilient throughout the region’s housing downturn.  The trend in Folsom all year was consistently down but largely level.  The high mark was in April at $409K and the low coming in August at $361K.  The average sale price in Folsom was $388K.

 

North Natomas Home Sales

The North Natomas market is one that has bounced around a lot over the last 13 months.  The high at $242K in January and the low in September at $203K.  Like a lot of areas of the region, since September/October 2011, values have been on the rise.  The average sales price in 2011 was $219K.

Orangevale Home Sales

The home values in Orangevale have also trended down with a precipitous fall from July to November of almost 20%.  The average sales price in Orangevale for 2011 was $203K.

Sacramento Home Sales

Sacramento, was largely unchanged throughout 2011.  Besides a blip July and August, values were very stable all year long.  In fact, the average sales price in January 2011 was the same as the average sales price in January 2009.  Not surprisingly, the average sales price over the entire year was $166K.  Very level home values without much in declines.

Availability of Homes For Sale

All of 2011 was plagued by an ever dwindling amount of available homes for sale in the Sacramento real estate market.  As the graph indicates, from January and February forward, the total amount of homes for sale decreased significantly.  Sales have been consistent but not barn burning so it’s not that the pace of sales has increased beyond the point where the homes coming on the market can’t keep up.

Since the fall of 2008, there have been rumors that there will be a flood of foreclosures coming on the market at anytime..BE READY!!  It’s all turned out to be horse hockey.  Move up buyers are largely stuck cause they are underwater and can’t sell to move up.  Those who do sell short have to wait until their credit clears up before than can make a move.  These issues combined have greatly reduced the total number of homes for sale in the region.

 

Please keep in mind that every neighborhood is different within each zip code in the region.  What might hold true for one area may not for the next.  If you have questions about the value of your home in your neighborhood, please let me know.  I’ll be happy to calculate the value of your home and present it to you in a report format.

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Tags: homes for sale sacramento, sacramento real estate

Housing Inventory Continues Decline

Pending Sales Are Through The Roof!!

The total number of homes for sale in both Sacramento and Placer counties has been declining steadily since October.  After 10 consecutive months of increases in 2010, it looks like we’re on our way to normal inventory levels and without government intervention, we could be headed for a “normal” market.

What the hell that means I have no idea.

I’ve been in this industry almost 10 years and still don’t know what a “normal” market looks like.  Now that I take a moment and think about it, maybe what I’ve seen in almost 10 years IS a normal market!

There’s a scary thought!!

Sacramento County

The increase in sales I’ve been expecting for the last month or so is finally showing up with almost a 34% increase in sales from February to March.  As you can see, pending sales are continuing to increase as well with a “scant” 91.7% increase since October and a 41.3% increase from February to March.

That doesn’t leave many months of inventory left when you consider the pended sales.  Just 1.8 months of inventory left if nothing else were to come on the market and only 3 months left based on the sold homes.

That is such an incredible turn around in very short period of time.

You know what this means don’t you?  Now that the inventory is declining and sales are increasing, the basic fundamentals of Economy 101,  supply and demand take over.  That means, based on what the data shows, we could begin to see an increase in prices in the short term.

I’m not one to say… ”HEY!! Prices are going to go up!! Buy now or you’ll LOSE OUT!!” But based on the data, what do you think??  An anomaly? Market going to crash or double dip??

If I’ve learned anything in 10 years is that my crystal ball is always a little bit cloudy on predictions.

Most economist see, according to Forbes magazine, that we’ll lose approximately 2% value region wide this year.  This will be an interesting year to say the least.

Placer County

The numbers in Placer County are more dramatic than Sacramento county but it’s the same story, sales and pending sales are way up while inventory levels continue to decline.

Pending sales increased over 92% in the last 6 months and almost 50% over February.  Homes for sale has decreased 24% over the last 6 months.  There is approximately 2.9 months of homes for sale in Placer county.

While it could be said that some of this is seasonal, we don’t often see results like this in the market.  These are quite dramatic changes and sooner or later, prices will have to respond to this or so you’d think.

While a quick check today revealed a leveling off to a slight decline of prices in both counties, I wouldn’t expect that to last if the current trends continue.

Looking to buy a home and avoid paying more tomorrow than you could be paying today? If so, I’d love to help you.  Please phone, text, email or just fill out the form below and I’ll get right back to you.

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Tags: homes for sale sacramento, Rocklin, Roseville

Up, Up and Away!

Number of Homes For Sale Continues to Increase

Every month this year, the number of homes for sale has gone up.  This month is no different.  Now that there are no government incentives to buy, the market is just plodding along.

Values aren’t going up, they are going down slightly but generally, they are just bumping along a bottom not moving either way dramatically.  Some communities, Lincoln for instance, have lost more than others.

Pending any government intervention, this should be the case going forward.  Rates are low, which is powering sales, and it’s a pretty safe time to buy depending if you’re investor or looking for a home to live in.

Investors seem to be sitting back and waiting on the dust to settle, which it is, and I think we’ll see a slight increase in investor activity beginning during the holidays and extending into the new year but we’ll see.

Short Sales Becoming Even More Popular

It’s clear that the loan modification program is a complete and utter failure.  As such, the only options for struggling homeowners is either walk away and go through foreclosure or attempt to sell the home short.

More and more banks are beginning to refuse to extend short sale close times and trustee’s sale dates.  This being the case, homeowners now cannot afford to wait and live in the home for an extended period of time

Banks are not approving loan modifications as, simply stated, they don’t work.  So few people have been helped by the program that it seems the banks are just refusing to do them.  I’m hearing over and over of loan modifications being denied.

It’s just as well, honestly, as any loan modification that doesn’t include a principal loan amount reduction is useless.  The  values of homes will not be appreciating thus it just doesn’t make good financial sense to stay in the home unless you aren’t planning to move or don’t need a larger home.

Staying in a home that is worth less than is owed by $50K or more, to me, just doesn’t make sense considering the projections of the region going forward.

The fact is, it just makes sense to walk away depending on your situation.  If you’ve been reading my blog for any length of time, that has been my advice for well over a year.  I don’t see it getting better for homeowners who purchased earlier than the last 2 years.

The percentage of homes in short sale status’ has increased from roughly 28% of the market to 32% of the market.  The number of bank owned homes on the market has also increased from 16% or 17% to 20% of the available homes for sale.

Homes for sale that are neither a short sale or a bank owned home has declined from approximately 53% to roughly 47%.

While most feel the worst is over, “kinda sucks” will be with us for quite a while.

Looking to take advantage of historically low interest rates and buy an affordable home somewhere in the Sacramento region?  If you need some help with that, we’re here for you.  Just fill out the form below and we’ll respond to you promptly.

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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.

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Tags: homes for sale sacramento

“We Don’t Need No Stinkin’..HOUSES!”

Available Homes For Sale Continues Decline

The inventory of homes for sales is, yet again, lower than it was last month bringing the amount of single family, detached homes down to it’s lowest level of the year at 5500 homes in active and active short sale status.

“Active” listings for sale is defined as bank owned or regular real estate sales between a willing buyer and seller.  An “active short sale” listing is defined as a home selling for less than what is owed on the mortgage.

Properties in “active short sale cont.” status while appearing available, technically, aren’t as the listing agents rarely submit more than one offer representing the highest and best offer to the bank.  As such, they aren’t included as available.

As screwed up as the banks are, this is a good policy!

Rumors Abound

While it’s clear at this point that there will more than likely be no dramatic increases in the amount of homes for sale, I’ve been talking to several prominent resources about increases in the amount of homes for sale and across the board I’m hearing that there will be increases in the available homes for sale after the first of the year.

I know, I know…we’ve been hearing this for a year and a half now but I think it’s getting to where the banks must do something and I believe we will see modest increases over the next couple of years if not over the next few years.

Besides this, it’s time for another market shift and I think we will see that in early 2010..don’t ask me why, it’s just a feeling.  After being in this business for a while, you begin to get a sense that change is in the air but can’t put your finger on it.

One thing is for sure, the foreclosure crisis isn’t going away anytime soon. While notices of defaults have declined slightly, people are still losing their homes, or walking away, and we will see this trend continue for at least the next 2 years.

Wishing you abundance and joy..

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Your Questions Answered!

“Has the market cooled at all with the Nov. first time home buyer money coming to an end?  Is it a waste of time to offer less?”

I got these questions today and I thought they were great ones to address because in 45 days or so the first time home buyer tax credit may come to an end.

No, the market hasn’t cooled because the number of homes for sale has decreased dramatically.  There are multiple offers everywhere, prices have increased a bit due to the competition for homes and the title companies are seeing short sales closing a little faster as well as an increase in regular real estate transactions. (between willing buyer and seller, like it used to be!)

Should you offer less?

Only on properties that have been on the market for extended periods of time. This applies to homes in higher price ranges that are taking longer to sell.  Everything below $300K or so is flying off the shelf, so to speak.

First Time Home Buyer Tax Credit Extension

Based on my research, I have a feeling the tax credit will be extended. There is so much support for the first time home buyer tax credit as it has added 400,000 additional sales this year and could add up to another 1.86 million sales* in 2010 if it was extended for one more year.

Read the rest of this entry »

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Sacramento Homes for Sale

Sales Down, Sales Prices Up

Average home sales prices have gone up every month consistently since May in Sacramento while home sales have continued to dwindle.  Concurrently, the inventory of homes for sale has steadily decreased in Sacramento since the beginning of the year.

The appreciation may be short lived depending on when and if the banks release the homes that have been foreclosed on to the open market.

The total number of  foreclosed homes not on the market could be as high as 30% of homes owned by the banks in the Sacramento real estate market.

Average Sales Price Increases

The average sales price in Sacramento climbed 1.75% since August and 3.5% since May for all zip codes of Sacramento.  There are some areas that have appreciated a little faster than others due to the values being lower in these areas than others.

The first time home buyer tax credit is accounts for the competitive sales environment we’re experiencing.  It expires November 31st and at present, there is no definitive sign that it will be extended.

Right now, first time home buyers are scrambling to get into escrow.

Most every home for sale has multiple offers and all offers must represent the buyers highest and best terms and price in order to be considered.  The only offers getting a counter offer are those selected to be the highest and best offer.

Don’t Buy Because of the Tax Credit

At this point, if you’re not already in escrow, it might be a good decision not to try and purchase to close prior to November 30th.

The tax money, while attractive, will be long gone in the short term and you’re going to live in your home, hopefully, for the long term. 

Hurrying to buy a home could cause you to pay too much for something very important and make a poor decision in the process.

Think about the opportunities that will exist after the tax credit expires.  Hopefully there will be a little less competition as the holidays are upon us and most folks will be preoccupied.

If you need help buying a home, please contact me.

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Tags: homes for sale sacramento