Insane value increases (not really) and Facebook real estate trends

The market has been showing insane value increases. Well, on paper it looks that way, but in reality that’s not what we’re seeing right now. Let’s take a deep look at the market today and also consider real estate trends we can glean from Facebook statuses. This big monthly post is long on purpose. You can scan it quickly or pour a cup of coffee and spend some time here. If you aren’t in Sacramento, I hope you can still find some value. Do you see any parallels to your market? Any thoughts? 

Three real estate trends we can glean from Facebook:

1) Asking for inventory: I am seeing many posts from real estate agents saying, “I have buyers, but there aren’t any homes on the market”, or “Do you have any upcoming homes in XYZ city or neighborhood?”, or “There are only 11 listings in the entire zip code.” Even if we didn’t have actual numbers to show inventory is sparse, we could pick up on this reality by some of what we see on Facebook. This is a good reminder that data is not just about looking at sales. 

2) Asking for rentals: Many in the real estate community and the general public are asking for rental inventory on social media. There are so many posts from tenants needing to find a home or agents and loan officers asking on behalf of someone. A person I know recently posted about trying to rent a home in Roseville only to have to compete with 23 other contracts on one house.

3) Announcing price improvements: This market is “hot”, but buyers are not biting on absurdly overpriced listings. This is why we still see Facebook posts telling of price reductions or “price improvements” (a softer way of saying the same thing). You might think we wouldn’t see such a thing in a “crazy hot” market, but we do.

4) What is #4?

———————- big monthly market update below ———————-

DOWNLOAD 70 graphs HERE: Please download all graphs in this post (and more) here as a zip file (including a one-page quick stat sheet). See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

A MARKET SUMMARY:

Last month values increased no matter how we look at it. The median price, average sales price, and average price per sq ft all increased in Sacramento County, Placer County, and the region. This isn’t a surprise though because it’s what tends to happen in the spring. The mistake we can easily make though is to look at the median price rising nearly 5% last month and say things like, “Values increased by 5%.” Thus if we’re not careful we might claim values are increasing rapidly when in reality they simply got back to where they were at the height of summer before a lull in the fall.

While the market is said to be “hot” in the “Farm to Fork Capital of America”, let’s still remember the market is not doing the same thing at every price level. Inventory is incredibly sparse under $400,000, and that is putting tremendous pressure on values to increase, but in some higher price ranges and neighborhoods the market feels a bit flat. Yes, there are multiple offers on about anything that is priced right, but still we have to not confuse the aggressive feel of the market with rapid appreciation. In short, at the moment we are not seeing the type of rapid appreciation we had in 2013 at the height of the glory days of Blackstone. In all of this let’s remember too we’ve had value increases without much wage growth. Let’s keep rooting for wages and the economy to drive the market instead of anemic inventory and low interest rates. 

Lastly, let’s remember the bulk of listings in 2016 hit the market between April and August, so my advice to buyers is to keep waiting for inventory to come (many buyers are feeling hopeless). I would advise sellers to price according to other properties that are actually getting into contract too instead of sensational real estate headlines.

SACRAMENTO COUNTY:

1. The median price increased to $323,500 (8.2% above February 2016).
2. The median price rose 6% last month, but values were basically getting back to summer after a lull in the fall, so this doesn’t mean values increased by 6% in one month.
3. Sales volume in February 2017 was just about 1% higher than last year.
4. It took an average of 44 days to sell a home last month (one year ago in February 2016 it was taking 2 days longer to sell).
5. It took two days longer to sell in February compared to January (next month we should see stats show less days on market as spring unfolds).
6. FHA sales volume is down 6% this year compared to 2016 (but roughly 25% of all sales were FHA last month).
7. Only 3.8% of all sales were bank-owned and 2.3% were short sales.
8. The average price per sq ft was about $204 last month (about 2% higher than January, but 8% higher than last year).
9. The average sales price increased about 2.5% last month and is currently $348,892. This is 7.7% higher than last year.
10. Cash sales were 15% of all sales last month.

Some of my favorite images this month:

SACRAMENTO REGIONAL MARKET:

1. The median price increased to $355,600 (7.7% above February 2016).
2. The median price rose 4.8% last month, but values were basically getting back to summer after a lull in the fall, so this doesn’t mean values increased by 4.8% in one month.
3. Sales volume in February 2017 was about 2% higher than last year. Sales volume in the region is up nearly 3% this year so far.
4. It took an average of 48 days to sell a home last month (one year ago in February 2016 it was taking 3 days longer to sell).
5. It took one day longer to sell in February compared to January (next month we should see stats show less days on market as spring unfolds).
6. FHA sales volume is down 6.7% this year compared to 2016 (but roughly 22% of all sales were FHA last month).
7. Only 3.4% of all sales were bank-owned and 2.5% were short sales.
8. The average price per sq ft was about $210 last month (about 1% higher than January, but 7% higher than last year).
9. The average sales price increased about 2% last month and is currently $387,105. This is 4.3% higher than last year.
10. Cash sales were 16% of all sales last month.

Some of my favorite images this month:

PLACER COUNTY:

1. The median price increased to $435,000 (4.8% above February 2016).
2. The median price rose 2.5% last month, but values were basically getting back to summer after a lull in the fall, so this doesn’t mean values increased by 2.5% in one month.
3. Sales volume in February 2017 was about 9% higher than last year.
4. It took an average of 51 days to sell a home last month (one year ago in February 2016 it was taking 7 days longer to sell).
5. It took 1 less day to sell in February compared to January.
6. FHA sales volume is down 12.6% this year compared to 2016 (but roughly 17% of all sales were FHA last month).
7. Only 2.5% of all sales were bank-owned and 3.1% were short sales.
8. The average price per sq ft was about $219 last month (about 3.9% higher than January and 4.8% higher than last February).
9. The average sales price increased about 2.4% last month and is currently $478,589. This is 3.5% higher than last year.
10. Cash sales were 16.5% of all sales last month.

Some of my favorite images this month:

DOWNLOAD 70 graphs HERE: Please download all graphs in this post (and more) here as a zip file (including a one-page quick stat sheet). See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

Questions: Did I miss anything? What are you seeing out there? How would you describe the market? I’d love to hear your take.

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