Six trends in the Sacramento real estate market

Let’s take a drive through the real estate market in January 2013 and “stop” off at six quick destinations to highlight some trends in the Sacramento area. I’d be curious to hear your take too, so feel free to comment below.

Stop 1:  The Distressed Market

Short Sale and Foreclosure Percentages in Sacramento County - by Sacramento Appraisal Blog

It’s incredible to see how the market has shifted in recent years – particularly over the past year as inventory has shrunk and foreclosure sales (REOs) have seen a massive decrease. It’s also striking to consider the total percentage of distressed sales (short sales + foreclosures) right now is less than half of what it was during January 2009.

Stop 2:  Cash Spending Spree

Sacramento Placer Yolo County Cash Stats January 2013 and 2012 - by Sacramento Appraisal Blog

Overall it seems cash stats are fairly similar to what they were in Q4 of 2012, though maybe there was a slight dip. It’s remarkable to think 35.5% of all sales in Sacramento County in January were cash. Ultimately we’ll see what the numbers do through an entire quarter when there is more time to really unpack stats. Keep in mind there are far fewer sales in Yolo and Placer County, so these stats really do need more than just one month to become clear.

Stop 3:  Cash under $200,000

Trend Graph - Sacramento Placer Yolo County Cash Stats January 2013 and 2012 - by Sacramento Appraisal Blog

Cash sales were very dominant during the past two quarters of 2012 under $200,000. There was overall a slight downtrend in January, but that’s only one month of data. Let’s see what happens over these next few months to really get a better picture. Will investors continue to devour the market in 2013?

Stop 4:  Comparing FHA, Cash & Conventional under $200,000

Cash FHA Conventional Stats in Sacramento County - by Sacramento Appraisal Blog

These figures help illustrate what it’s like in the market right now for buyers under $200,000. While it’s not always easy to get an FHA offer accepted, it’s still important to realize 1 in 5 sales are still going FHA. Cash and conventional have been the most dominant forces in the market. Anything you’d add? Realtors, what are you experiencing in the trenches?

Stop 5:  The job market in Sacramento

The unemployment rate is finally below double digits in Sacramento County. 9.9% is still really high, but it hasn’t been this low since January 2009. Honestly, I figured the unemployment rate would have increased recently in light of closures by Campbell Soup and Hostess, but it keeps going down.


Stop 6:  Rental signs are a “sign” of the times

Blackstone Signs in the Sacramento Market - Photo by Ryan Lundquist

Have you been seeing these signs throughout the Sacramento area? These signs are on many properties that have been purchased by the private equity fund Blackstone (they’re buying as “THR California”). This photo was taken in Natomas, and there were actually three signs on this one street (though I could only fit two in the shot). The questions we all wonder are: 1) When will they slow down purchasing?; and 2) Can they effectively manage such a large portfolio?

Question: What else has been happening the market? What are you seeing? I’d love to hear your thoughts in the comments below.

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