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10 Years of Sacramento Real Estate Trends
Ten years of Sacramento real estate trends by quarter from 2005 to 2015.
There seems to be an abnormal amount of buyers who are canceling escrow lately in Sacramento. Some of them don’t even make it into escrow by the time they cancel. Whenever I spot something weird going on in Sacramento real estate, I look at Sacramento real estate trends to see if I can find an answer in the numbers. Well, that, and I have an abnormal fascination for math and its relationship to our ordinary, everyday lives. Plus, I’ve been in real estate for so long that I can actually recall what happened 10 years ago and 30 years before that.
The chart above shows you 10 years of Sacramento real estate trends by average list prices versus average sold prices. There is always a gap between the average list price and the average sold price, and the two lines don’t necessarily relate to each other unless there is an unusually high number of homes for sale in Sacramento, like there was during 2005 to 2007. In fact, zeroing in on 2007, which was only 8 years ago as far as Sacramento real estate trends go, there are astonishing differences between that year and today.
For example, to gain a better understanding of Sacramento real estate trends, look at the statistics comparing quarters of October 2007 to October 2015 below:
Quarter Oct 2007 Quarter Oct 2015
For sale 31,322 For sale 8,354
Sold 2,476 Sold 4,684
Mo. inventory 12.7 Mo. inventory 1.8
Absorption rate 7.9 Absorption rate 56.1
Av. CDOM 98 Av. CDOM 36
Median 318,000 Median 289,000
What this tells you is we have 73% fewer homes for sale in 2015 than in 2007, but we are selling more than twice as many in one-third the number of cumulative days on market at about the same sales prices. That’s pretty astonishing. It’s a tight market. Buyers can’t afford to be squirrelly about it. If you need advice about Sacramento real estate trends, call your Sacramento Realtor, Elizabeth Weintraub, at 916.233.6759. I’ll be happy to help you sell or buy a home in the Sacramento area.
Chart: Trendgraphix, used with permission
Why October is a Good Month for the Sacramento Housing Market
Sacramento Housing Market statistics for 15 months thru October 6, 2015.
At first I had intended to show you a graph of the Sacramento housing market but the real information to be gleaned is not contained in the graph of the housing market in Sacramento, it’s actually in the numbers. Simply put, we do not have enough inventory, not enough homes for sale in Sacramento to satisfy demand. I noticed this in my own real estate business because all of my listings are selling. At any given time, I generally carry a couple dozen listings of one type or another, and at one point in 2011 my inventory was up to 75 listings or so. I’m selling them all now within about 30 days.
I checked the stats on other top producers, and their inventory is reduced, too. For the last 12 months in Sacramento, Elizabeth Weintraub ranks as the #7 agent in the area. If you’ve ever thought about putting your home on the market in Sacramento, now is the time to do it. Are you worried that you might not find another home to buy? No problem, you can sell your home contingent on finding another home, and most buyers will wait for you. This is the market to move up in. We’ve got a big group of entry-level home buyers itching to get into a home.
Interest rates are still low and not expected to rise until maybe December. If you wait to buy when everybody else under the sun is buying, you’ll have too much competition for the home you want to buy. Warren Buffet is the guy credited with saying that you should buy when nobody else is buying and sell when nobody else is selling. Our Sacramento housing market is a perfect example of that wisdom.
Look at the statistics in the UPPER RIGHT. Sales have fallen 75% the first week of this month as compared to the first week of last month. Our pending sales are down for the same time period by 35%. This is an excellent time to sell your home in Sacramento. You have the best of all worlds. The median sales price has remained pretty much steady at $290,000 for the past 4 or 5 months. That hasn’t happened in years. I can’t remember the last time that happened. I also can’t remember the last time my inventory of listings dropped below 10 homes for sale.
We’re not gonna see a big uptick in pricing next spring. If you want to sell a home, right now you should be on the market. We have fewer than 2 months of inventory.
Call your top producer Sacramento Realtor today, Elizabeth Weintraub, at 916.233.6759.
Sacramento housing market statistics, Trendgraphix.
The Sacramento Real Estate Market in August 2015
There are no glasses on the table because this family finished their Jell-o shots in the kitchen.
The Sacramento real estate market in August tends to slow down a little bit in all of this end-of-summer heat and stays fairly quiet until the weekend after Labor Day. Part of the reason is it’s fairly hectic getting kids back in school in August, which seems almost sacrilegious to old geezer, watching your summer cut so short like that. The other is families tend to travel over Labor Day or attend family celebrations, and they’re generally not out looking at homes to buy.
Not even on their computers or phones, unless they’re a bored 19-year-old at a family reunion, oh, wait, that was me. And I didn’t have any stinkin’ computer or cellphone to waste time on. No sirree. I was forced to come up with other creative ideas, like how many bottles of beer could we stuff in the trunk of my ’65 Mustang before anybody noticed. Yeah, people might talk about Sacramento real estate in August while chomping on a brat and dribbling mustard on a shirt that won’t wash out the stain, but they are not looking at real estate and nobody, really, is holding any open houses.
The buyers who are out now looking at homes, though, seem to be driving their agents crazy. I say this because of the types of calls I’ve been receiving from buyer’s agents on my listings. The fact that they are calling this Sacramento Realtor generally means trouble. Because if the agent’s buyer likes the home and wants to make an offer, usually agents are writing the purchase offer and not calling the listing agent. They would call to say they are sending the offer or they have sent the offer but not just to chat.
Calling just to chat tends to mean one of three things. Either the agent doesn’t know how to write the purchase offer (which is not all that uncommon in this industry), or the buyer’s agent wants an edge in a multiple-offer situation (which is not happening on a large scale right now), or the buyer wants to lowball. If the buyer wants to offer considerably less, the buyer’s agent sometimes wants to discuss this and get a feeling of whether the offer will be rejected or if the listing agent will forever hold the act against them. There are listing agents who blame the buyer’s agent for sending goofy offers but I am not one of those.
I received a call from an agent yesterday while I was driving back to Sacramento from a weekend in Anderson, California. She was incredibly difficult to understand, but I made out the key words. She called on a home in Elk Grove, and when I figured out the address, I asked if she was calling because the buyer wants to know if he can offer $10,000 less than list price due to “all the work” the home needs, even though those inspection reports are attached to MLS and the home is already priced 50,000 under the comparable sales, because also we don’t have eyeballs and we have no idea how much work the home needs. The agent laughed hysterically. That was my answer.
My passenger asked how I could understand what the agent was saying during our conversation, because my phone was on speaker in the car, and it was garbled going down I-5 in the middle of nowhere. I couldn’t make out half of what the agent said, but I did understand. It’s the time of year. Just wait until after Labor Day weekend. Normal lull to the Sacramento real estate market in August.
Is This a Good Time to Sell a Home in Sacramento?
Right now is a good time to sell a home in Sacramento.
The thing about selling a home in Sacramento is if it is urgent to sell, whether now is a good time to sell a home in Sacramento is not a question some sellers ponder. If there is no urgency, though, a seller is more likely to ask that question, and with good reason. There are good times and not so good times to sell a home, but none of those situations make the sale impossible, unless you’re underwater and don’t want to do a short sale.
Over the past decade, we have weathered a horrific time in Sacramento real estate and throughout the nation. From 2005 through 2011, sales were depressed and prices fell. Now, much of the turbulence has passed and the market has been on an upward motion ever since. The big price increases are pretty much over for a while, and not every seller is out from underwater, but many who bought in 2007 and forward are making out OK.
The National Association of Realtors just released the REALTORS Confidence Index for July 2015. I participated in that survey so I received an advance copy prior to publication. Although all real estate is local, the story is pretty much the same across the country:
- low inventory
- harder for buyers to qualify for a loan
- problematic appraisal issues
- delayed closings, and
- the looming interest rate increase on the horizon gives buyers pause.
Here are some of the facts released in the Realtor Confidence Index report, which I hope you will find interesting:
- The days on market for May to June in California are mostly under 30, whereas the days on market in Maine are over 90.
- The outlook for the next 6 months in California for selling single family homes, townhouse or condos is strong.
- Buyer traffic in California is strong; whereas seller traffic is weak. This is one sign for a seller that it’s a good time to sell. Easier to sell, but harder to buy. Contingent sales may be more prevalent in California as a result.
- The median price change over the next 12 months in California is forecast at 3% to 4%. The two states predicted to see the highest median price changes are Colorado and Florida, from 5% to 6%.
- Regarding distressed sales, nationally, foreclosures made up 5% of the market and short sales dropped to 2% of all sales.
- Cash sales are still strong at 23% of all buyers, but an interesting fact is 75% of those cash investors are foreign internationals. My mother learned to speak several Chinese dialects, and I wish she were around now.
- The rental market is on a strong upswing, and it’s cheaper to buy a home than it is to rent. Good time to buy and hold.
Overall, I’d say this is an excellent time to sell a home in Sacramento, especially since we are heading into our second strongest season in the area, which starts right after Labor Day. As long as interest rates don’t jump, the market will remain fairly steady into next year.
We desperately need more homes to sell. Call Elizabeth Weintraub at 916.233.6759, if you’re thinking about selling a home in Sacramento. I am a top producer with more than 40 years of experience.
Why One Home in Land Park Sells and Another Home Does Not
A good way to start my blog today could be with a comparison reminiscent of that old TV show The Naked City, to talk about there being 10,000 stories about real estate sales in Land Park, Sacramento, but we don’t have enough inventory anywhere in town to make a statement like that. In fact, probably the last time the entire Sacramento County region saw 10,000 homes for sale on the market was 10 years ago. Are you ready for the astonishing news today?
Today, this very moment, in the entire county of Sacramento, we have only 2,280 single family homes for sale in our multiple listing service. But wait, there is more. Guess how many single family homes are in some sort of pending status? You know I have the answer. It’s 2,791 homes. We have more homes in pending status than we have homes for sale, which means we can’t repeat this scenario next month because there is not enough inventory at the moment to satisfy demand! The pending sale line has risen above the number of homes for sale. We have a real estate drought in Sacramento real estate. It’s not just the water shortage we’re worried about, although granted we could die without water. Real estate, not so much.
SACRAMENTO COUNTY REAL ESTATE MARKET SNAPSHOT
To put it into technical terms, we probably have about 3 weeks of inventory for sale. We could sell everything in the next 3 weeks. And this fact is driving the market completely insane. If your home is not in the best condition, or if it is located in a less than desirable location, it could take longer to sell, but a well located home in move-in condition should attract several offers. This is not a time to sit idly, tapping your fingers on the desk, wondering if it’s a good time to put your home on the market. You don’t have weeks or months to think about it because summer is coming. Summer sales slip and slide. It’s kinda like Jon Snow’s real estate slogan: Winter is coming, except there is no snow, blood or gore. Just heat and not much action.
Which brings me to the point in this week’s Game of Thrones season opener when Varys charged Tyrion Lannister with the character of compassion. Tyrion responded quixically: “Compassion? I strangled my lover with my bare hands; I shot my own father with a crossbow.” I vote this best scene in Season 5, Episode 1, Game of Thrones. Made me laugh out loud and scared the cat off my husband’s lap. I enjoy this type of entertainment sometimes to keep my mind off the wild world of Sacramento real estate or I’d be consumed by it all night.
I closed another home sale in Land Park last week that sold so fast and for more than list price which, a year ago, might have taken up to six months to sell. Of course, it helped that the sellers listened to my advice and made improvements to make the home ready for market. We priced it on the high end, yet sold with a 3% price bump and no hassles. In fact, we negotiated a few days rent-back for the sellers who were relocating out of state. I’d like to believe my marketing techniques, vast internet exposure and excellent photography helped make buyers fight like wild animals over it . . . but it might also be that I work as one of the top 3 Lyon Realtors, at the largest independently owned real estate brokerage in Sacramento that sells many listings in-house through our huge network.
There is another home in Land Park I drive by daily that sits forlorn with a small sign in the yard and no traffic, no buyers. It’s been on the market for months. The sellers changed agents twice. The photography is decent, but it’s not being marketed the way I would do it. I’d like to get my hands on that listing and put it into escrow, but I can’t solicit another agent’s listing, nor would I want to be that kind of agent. If you’re thinking about selling your home, give Elizabeth Weintraub a jingle at 916.233.6759. I answer my phone.
