10 things to know about low housing inventory

Inventory is low. Really low. That’s one of the big stories right now in real estate, so I wanted to spend some time kicking around some thoughts. Let’s take a look at ten things to know about housing supply in Sacramento. If you aren’t local, I hope you can still find some value. Do you see any parallels to your market? Any thoughts? 

DOWNLOAD 50 graphs HERE: Please download new market graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

10 THINGS TO KNOW ABOUT LOW HOUSING INVENTORY

1) Housing inventory is clearly on a declining trend.

inventory in sacramento county Since 2013 - part 2 - by sacramento appraisal blog

Housing supply has been vanishing over the past few years in light of greater buyer demand, sellers sitting instead of selling, less new construction, increasing sales volume, and other reasons.

2) Housing supply is really sparse (except at the top).

inventory - March 2017 - by home appraiser blog

Housing supply was low last year, but this year it’s 15-20% lower. Having less listings means it’s really competitive for buyers – especially under $400,000. However, inventory is not low at every price range as there are far more listings at the top. Before freaking out though, this is actually a normal trend we see almost every single month. But the disparity between under $500,000 and above $1,000,000 is striking. As an FYI, it’s worth noting the top of the market does feel a bit soft.

3) Inventory is still not as low as the Blackstone days.

inventory in sacramento county Since 2011 - by sacramento appraisal blog

It’s true that inventory is anemic, but we have to remember during 2012 and 2013 it was at one month for nearly an entire year when Blackstone and other investors were gutting the market. I mention this because while the market has an aggressive feel, it’s still not what it was. If inventory persists in declining though it will be a bloodbath in terms of competition for buyers (good for sellers though as a developer mentioned to me on Twitter). 

4) Inventory was 1400% higher ten years ago during the “bubble”.

inventory in sacramento county Since 2007 - by sacramento appraisal blog

Ten years ago during the worst of the real estate “bubble” popping we had a 14-month supply of homes for sale (as opposed to one month now).

5) Bank-owned inventory is not a driving factor today.

REOs and Short Sales Sacramento County - by Sac Appraisal Blog

Eight years ago over 70% of all sales in Sacramento County were REOs, but that number is now about 3%. Some folks promise a new “foreclosure wave”, but it’s definitely not here right now.

6) Low inventory is putting pressure on values to increase.

Median price since 2013 in sacramento county

Declining inventory over the past few years is a big factor in rising prices. Right now values are about where they were at the height of last summer (or slightly higher) after a lull in the fall in many neighborhoods in Sacramento County. But let’s not make the mistake to think the market is doing the same thing everywhere. The truth is in some areas increases have been modest at best over the past year while some price ranges feel flat, but the bottom of the market is hands-down experiencing the largest increases. Remember, in some price ranges the market feels more aggressive than actual value increases too, so it’s really important to sift through emotions, look at actual numbers, and not overprice because the market is “hot”. A good mantra for some areas is “Aggressive Demand, Modest Appreciation.”

7) Strong demand is a huge reason why inventory is declining:

price metrics since 2014 in sacramento county

Demand is strong right now for both buying and renting, and buyers and tenants are simply gobbling up almost anything out there (I say “almost” because buyers are still sensitive about adverse locations and overpriced homes). Thus it’s not surprising to see the median price is 7% higher than last year, the average sales price is 9% higher, and the average price per sq ft is about 9% higher. Prices increases from February to March were anywhere from 1-3% depending on the metric (this doesn’t mean values went up by 1-3% though). 

8) Increasing sales volume is one reason for lower inventory.

Cash in Q1 - by Sacramento Regional Appraisal Blog

Housing inventory is the relationship between sales and listings, so if there are more sales and no real change in the number of listings it will naturally mean inventory as a metric will show a decline. Look at the graph above to see all sales since 2013 for the first quarter of the year. Can you see how sales volume is increasing? At the same time we see cash volume declining. This reminds us the market is trying to figure out what normal looks like. It’s healthy to see sales volume growing.

9) Low interest rates have helped take homes off the market.

Interest Rates Since 2008

Historically low interest rates have played a big role in shaping inventory in that some owners are sitting on a 3.5% interest rate from years ago and they are simply not going to move unless necessary. Why would they anyway if their replacement home would come with a much higher mortgage? This means there are fewer homes hitting the market that might otherwise sell.

10) Low inventory is causing homes to sell faster.

CDOM in Sacramento County - by Sacramento Regional Appraisal Blog

Last year it was taking 5 days longer to sell a home and two years ago in March 2015 it was taking 15 days longer to sell a home. Can you see how low inventory makes a difference in how long it takes to sell? By the way, here is CDOM by price range. As you can see, the higher the price the longer it takes to sell. Just because it is a “hot” market does not mean every property is selling in 3 days.

BIG MONTHLY POST NOTE: Once a month I do a big market update (and it’s long purpose). Normally I talk about Placer County and the Sac Region too, but I tore my MCL a few weeks back, so I only had time to focus on Sacramento County in today’s post. Next month I’ll likely be back to normal (but I may change it up too).

DOWNLOAD 50 graphs HERE: Please download new market graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: Did I miss anything? Any other thoughts as to why inventory is low? How would you describe the market right now? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Seeing the real estate market without numbers (and a big Sacramento update)

It’s not just about the numbers. Like many, I’m a huge fan of getting deep into real estate stats, but the truth is there are so many other ways to sniff out what the market is doing. Thus I’ve created a list of some of the things on my radar lately that help say something about the temperature of the market. Then for those interested, let’s crunch some numbers with my big monthly Sacramento market update. I’d love to hear your take. Any thoughts?

How to see the market moving - image purchased and used with permission from 123rf - Sacramento Appraisal Blog

Ways to see the real estate market without numbers:

  1. Facebook Posts: I can’t tell you how many posts I’ve seen lately saying, “Hey, my friend needs to rent a house. Anyone have something?” Seeing an increasing number of posts like this on Facebook or Nextdoor.com is definitely a symptom of rising rents and scarce inventory.
  2. Celebrity Flipping Seminars: Last week an HGTV flipping couple hosted a 4-day “how to flip” seminar in Sacramento, and this week a different “guru” is coming to town. If anything, this tells us the market for flipping has passed.
  3. Riskier Loans: As more lower-down payment loan products hit the market, it reminds us buyers need more options to afford higher prices.
  4. Sacramento Kings vs. Market - jokeSacramento Kings Wins: Here is an image to show the relationship between an NBA team winning and the housing market. Okay, there really isn’t a connection, but it almost looks like there is (you can make numbers say whatever you want).
  5. Less Property Tax Appeals: As the market has improved, assessment appeals have declined every year since 2008 in Sacramento County. Right now home owners are enjoying equity again and they’re hardly paying attention to their property tax bills. Here is an image to back that up.
  6. More Divorces: As the housing market has rebounded, it seems there are more divorces. I’ll admit stats are tricky in that some sources say divorces are increasing and others say they are not. It may be my personal experience, but I’ve done more divorce appraisals these past 2-3 years than I have in the previous ten years.
  7. Builders Being Less Cooperative: I’ve heard from several agents lately about local builders being less cooperative with agents representing buyers. That’s fairly normal for builders of course, though being less cooperative is certainly a luxury afforded by a market with tight inventory too. In other words, if the market had three times the housing supply, conversations might go differently at the sales office.
  8. The word “shift”: There is so much emphasis right now on the market shifting or maybe doing so in coming time. When the real estate community uses terms like shift, change, correction, or bubble, it can sometimes highlight what the market is doing (or at least what is on the mind of the real estate community).

Question: What is #9? I’d love to hear in the comments below. By the way, scroll to the bottom if you want to see some of my recent woodworking projects.

—————– For those interested, here is my big market update  —————–

Big monthly market update post - sacramento appraisal blog - image purchased from 123rfTwo ways to read the BIG POST:

  1. Scan the talking points and graphs quickly.
  2. Grab a cup of coffee and spend time digesting what is here.

DOWNLOAD 70 graphs HERE: Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

Quick Market Summary: Yep, the stats show the market has been increasing. This doesn’t mean every single price range or neighborhood is going up in value, but county and regional data are definitely showing that trend overall. One of the bigger narratives is that housing inventory is still down by 15% in the region compared to last year. Sales volume has been up slightly for the year and it took 6 less days to sell last month compared to the previous month. For context, last year at the same time it was taking an average of 8 days longer to sell. This reminds us the market has been more competitive this year compared to last year, though don’t take that to mean value increases have been extremely aggressive. Last month the median price increased by nearly 2% in the region, and the average price per sq ft increased by 2.5%. Overall most value stats are up a good 8-10% since last year, though remember it’s not the same market as it was in 2005 when we’d say, “My house went up by $10,000 last month.” It’s still important to price correctly unless you want to sit instead of sell.

Sacramento County:

  1. It took an average of 27 days to sell a home last month, which is 4 days less than the previous month.
  2. The sales to list price ratio was 100% last month.
  3. It took 8 less days to sell this May compared to last May.
  4. Sales volume was up nearly 4% in May 2016 from May 2015.
  5. There is only 1.35 months of housing supply in Sacramento County.
  6. Housing inventory is 22% lower than it was last year at the same time.
  7. The median price increased by 3% last month.
  8. The median price is 9.6% higher than the same time last year.
  9. The avg price per sq ft increased by 1.8% last month.
  10. The avg price per sq ft is 9.9% higher than the same time last year.

Some of my Favorite Graphs this Month:

Median price since 2013 in sacramento county

monthly inventory is sacramento county since 2001 - by sacramento appraisal blog

inventory - May 2016 - by home appraiser blog

CDOM in Sacramento County - by Sacramento Regional Appraisal Blog

price metrics since 2015 in sacramento county - look at all

market in sacramento - sacramento appraisal group

SACRAMENTO REGIONAL MARKET:

  1. It took 6 less days to sell last month compared to the previous month.
  2. It took 8 less days to sell this May compared to last May.
  3. The sales to list price ratio was 99% in the region last month.
  4. Short sales and REOs were both 3% of sales last month.
  5. There is 1.6 months of housing supply in the region right now.
  6. Housing inventory is 15.6% lower than it was last year at the same time.
  7. The median price increased 1.7% last month from the previous month.
  8. The median price is 6.8% higher than the same time last year.
  9. The avg price per sq ft increased 2.5% last month.
  10. The avg price per sq ft is 8.4% higher than the same time last year.

Some of my Favorite Regional Graphs:

median price sacramento placer yolo el dorado county

sacramento region volume - FHA and conventional - by appraiser blog

sales volume 2015 vs 2016 in sacramento placer yolo el dorado county

Regional Inventory - by Sacramento regional appraisal blog

days on market in placer sac el dorado yolo county by sacramento appraisal blog

median price and inventory in sacramento regional market

Regional market median price - by home appraiser blog

PLACER COUNTY:

  1. It took 2 less days to sell a house last month than April.
  2. It took 1 less day to sell this May compared to last May.
  3. Sales volume was up 3% in May 2016 compared to last May.
  4. FHA sales were 16% of all sales last month.
  5. Cash sales were 17% of all sales last month.
  6. There is 1.84 months of housing supply in Placer County right now.
  7. Housing inventory is 12.4% lower than it was last year at the same time.
  8. The median price is about the same as it was the previous month.
  9. The median price is up 7% from May 2015.
  10. Short sales were 2.1% and REOs were 1.7% of sales last month.

Some of my Favorite Placer County Graphs:

number of listings in PLACER county - 2016

Placer County sales volume - by sacramento appraisal blog

months of housing inventory in placer county by sacramento appraisal blog

Placer County price and inventory - by sacramento appraisal blog

days on market in placer county by sacramento appraisal blog

Placer County housing inventory - by home appraiser blog

I hope this was helpful and interesting.

My Latest Woodworking: By the way, I know this post has been ridiculously long already (on purpose since it’s my big monthly market update), but here are some of my recent woodworking projects. If you didn’t know, I like to tinker and create.

Ryan woodworking 2

Ryan woodworking 1

DOWNLOAD 70 graphs HERE: Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

Question: Any other market insight you’d like to add? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

A normalish start in 2015 for Sacramento’s regional market (and Placer County)

How did the real estate year begin in Placer County? What about the entire regional market in Sacramento? Let’s take a good look today so we can better understand how things are moving and how to explain trends to clients.

Longer on purpose: If you’re new to subscribe (thank you), know that twice a month I break down the trends so we can better see the local market. Most of my other posts are general enough to apply anywhere in the United States. Is your market similar though? I’m curious.

Two ways to read this post:

  1. Scan the talking points and graphs quickly.
  2. Grab a cup of coffee and spend a few minutes digesting what is here.

snail in a race photo - bought by sacramento appraisal blog and used with permission

Email me if you want 20 graphs: If you would like all the graphs in this post (and 7 more), send me an email (make sure to write “I want the market graphs” in the header). You can use some of these in your newsletter, on your blog, and in other social spaces. See my sharing policy for 5 ways to share.

PLACER COUNTY:

1) The median price saw a dip in January (which is normal):

Placer County median price and inventory - by home appraiser blog

Placer County median price since 2012 - Fall season - by home appraiser blog

The median price cooled in Placer County, but as you can see in the graph above, it often cools off toward the latter part of the year and the beginning of the year. The seasonal market is a reality, and it’s important to consider what the market typical does during different seasons of the year.

2) It took an average of 68 days to sell a house in January:

days on market in placer county by sacramento appraisal blog

number of listings in PLACER county - January 2015 - by home appraiser blog

Last year it took 58 days to sell a house in January, and this year it took 68 days to sell a house (a 17% increase). When it takes longer to sell, it’s a sign that the market is overall slowing down. It’s actually a good thing for properties to take longer than just 30 days or so to sell because it evens the playing field and slows down rapid appreciation in value. Remember though that well-priced properties are still moving quickly (and even receiving multiple offers). At the same time, buyers are not quickly pulling the trigger on overpriced listings or properties with an inferior condition or adverse location (unless priced correctly).

3) Monthly sales volume was just about the same as last January:

Placer County sales volume - by sacramento appraisal blog

Monthly sales volume in January was virtually identical to last January. Sales volume tends to hit a low point in January, and that’s exactly what happened again this year.

4) Monthly inventory increased in January (not a surprise):

Placer County housing inventory - by home appraiser blog

months of housing inventory in placer county by sacramento appraisal blog

Monthly housing inventory has been flirting with 2.5 to 3.0 months for the past year in Placer County. Last month inventory shot up to 3.16 months, which means there are 3.16 months worth of houses for sale on MLS. However, this is a weak figure since it is calculated by dividing the number of current listings as February 1 by the number of sales last month. Since there were very few sales last month, this actually means there really aren’t very many listings right now (not yet, but they are starting to come as the spring market unfolds). As you can see, the higher the price, the more inventory there is.

5) Layers of the market at work:

interest rates inventory median price in placer county by sacramento appraisal blog

I like this graph because it’s a beginning to help show there are many different “layers in the market” so to speak. It’s never just about supply and demand. There is so much that goes into driving the market.

PLACER COUNTY SUMMARY: Stats for January showed just what was expected. The median price softened (which almost always happens in January), sales volume was just about the same as last January, it took longer to sell compared to the previous month, and inventory increased. The market is bound to feel more competitive to a certain extent because of lower interest rates, but sellers must remember to price according to this market instead of the very aggressive market in 2012 and 2013.

SACRAMENTO REGION:

1) Comparing Sacramento, Placer, and the Region:

Regional market median price - by home appraiser blog

It’s easy to get so focused on data from one county or neighborhood that we lose sight of the big picture. What are values doing in the overall regional market? When we take a wider look with far more data, we can sometimes get a better sense of the trends. Remember of course that not every neighborhood, price range, or property type is experiencing the same trend.

2) The regional median price took a dip last month (normal):

median price and inventory in sacramento placer yolo el dorado county

Sometimes people react with fear when they hear prices softened at the end of the year and beginning of the year, but that’s a very normal part of the real estate cycle. The market as a whole is still definitely slowing down, and we’ll watch that trend, but a slowness during this time of year was to be expected. Keep in mind there are almost 3000 pendings in the region right now, which represent more sales in coming months. It’s also normal to see a high volume of pendings right now because the spring sales spike in March happens because of all the listings that got into contract in January and February.

3) It took 65 days to sell a house in the Sacramento region:

days on market in placer sac el dorado yolo county by sacramento appraisal blog

On average in January it took 65 days to sell a house. Last January it took 53 days to sell a house, which means it took 22% longer this year to sell.

4) Monthly inventory is now at 2.9 months:

months of housing inventory in region by sacramento appraisal blog

Right now housing inventory is at 2.9 months, which is slightly above where it was last year at the same time at 2.7 months. Since there is more data to consider for the regional market, it really helps show the way the market works: The higher the price, the more inventory there is.

5) Layers of the market at work:

interest rates inventory median price in sacramento regional market by sacramento appraisal blog

Just as I shared for Placer County above, here is a graph with different “layers in the market” so to speak. There is so much that goes into driving the housing market.

SACRAMENTO REGIONAL MARKET SUMMARY: Stats for January were  not a surprise at all. The median price softened, it took longer to sell this January, and housing inventory increased. This is usually what happens with January stats.

I hope this was helpful.

Share: Please feel free to share this link with clients, and see my sharing policy for 5 ways you can share my content so we’re on the same page about sharing.

Questions: What are you seeing out there? How does the market feel to you? Anything you’d add?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

The story of Sacramento’s regional housing market in 2014

How much did values increase last year in the Sacramento Region? What about Placer County? How would you describe the market to friends or clients? Let’s take a stroll through the trends today.

Dude, this is a long post: If you’re new to subscribe (thank you), most of my posts are not this long. But twice a month I break down the local trends so we can better know how the market is moving. If you are outside of the area, you can still glean from what is here. Beyond these two monthly posts, my other posts tend to be general enough to apply throughout the United States.

Two ways to read this post:

  1. Scan the talking points and graphs quickly.
  2. Grab a cup of coffee and spend a few minutes digesting what is here.

Thank you for being here.

SACRAMENTO REGION (scroll below for Placer County)

Sacramento regional market in 2014 - by Sacramento Appraisal Blog - smaller

Email me if you want the graphs: If you would like all the graphs in this post (and others), send me an email (make sure to write “I want the market graphs” in the header). You can use these in your newsletter, some on your blog, and some in other social spaces. See my sharing policy for ways to share.

Regional Market Year-End Stats:

1) Median Price ended at $309,000
2) Average Sales Price ended at $339,182
3) Average Price per sq ft ended at $179
4) Sales volume was down 6.6% in 2014 compared to 2013.
5) FHA sales increased by 4.6% from 2013.
6) There were 32% less cash sales this year.
7) Short sales represented only 6.7% of the entire market in 2014.
8) Bank-owned sales were only 5.8% of all sales in 2014.

1) Values saw a modest uptick, but the market was flat for most of the year:

median price sacramento placer yolo el dorado countyThe graph above shows an increase in the median price at the beginning of the year, but then the market was basically flat for more than half the year. Overall the median price increased by 10.3%, the average price per sq ft increased by 5.3%, and the average price increased by 6.6%.

Regional market median price - by home appraiser blog

 2) Cash volume declined by 32% this year in the regional market:

cash sales and volume in sacramento region - by home appraiser blog

Having 32% less cash sales in 2014 definitely softened up the market compared to 2013. For much of the year there was a sense the market was “normalizing” in that it was learning how to exist without cash investors driving the market, inventory was approaching more normal-ish levels, and interest rates were increasing. Of course now that rates have begun to decline again, that will help put a bit more “steroid” back into the market.

3) Sales volume was down by 6.6% in the region:

SALES volume in sacramento region - by home appraiser blog

There were almost 1800 less sales this year in the Sacramento region, which translated to a sales volume at 6.6% lower than the previous year. This year volume was lower, and we began to get a better picture of what real demand is like in the Sacramento market. In 2012 and 2013 we saw a market that was driven by buyers outside of our market (investors). In short, the demand wasn’t a result of the local market or the local economy. But this year we saw a market that was more driven by local buyers, which is why volume was so much lower than the previous year. Granted, interest rates are still helping buyers afford far more than their wages would otherwise allow, and that’s going to be important to watch over time.

4) Housing inventory increased over the year (declined in December):

median price and inventory in sacramento placer yolo el dorado county

Housing inventory saw a clear upward trek throughout 2014. There was not a steady increase every single month, but overall the trend was increasing, wasn’t it? The truth is in real estate some months are going to be higher or lower in a particular category, and sometimes data will even seem conflicting. That’s why we need to look at the big picture as well as hyper-local neighborhood data and county-wide data. It all helps us understand and tell the story of the market.

months of housing inventory in region by sacramento appraisal blog

Here is what inventory looks like in December. We should see increases this next month as some properties slowly begin to hit the market. We like to think real estate fever begins in March, but remember the sales in March are often the pendings from February.

5) It’s taking about 25% longer to sell a house in today’s market (but 35% more quickly than it was three years ago):

days on market in placer sac el dorado yolo county by sacramento appraisal blog

These days it’s taking about 25% longer to sell a house than it did last year. This sounds alarming, but let’s remember this is normal. We remember the days in mid-2013 when it was actually taking less than 30 days on average to sell a house. That was insane. For context, at the end of 2011 it was taking about 90 days to sell a house in the Sacramento region (that was three years ago). Of course I still recommend pricing to sell in 30 days or less so you hit the sweet spot of buyers looking for properties. In most price ranges  you don’t want to be on the market for 90 days right now because you begin to lose your power to negotiate a higher price with buyers.

6) Listings and Trends:

number of listings in Placer Sacramento Yolo El Dorado county - Oct 2014 - by home appraiser blog

Here is the price spread of current listings in the regional market. The bulk of current listings are priced between 200-400K. We can also see as of last month there were only 50 properties for sale under $100,000. It’s just no longer the market to pick something up for dirt cheap.

interest rates inventory median price in sacramento regional market by sacramento appraisal blog

Last but not least, here is a picture of some of the “layers of the market” working together.

Email me if you want the graphs: If you would like all the graphs in this post (and others), send me an email (make sure to write “I want the market graphs” in the header). You can use these in your newsletter, some on your blog, and some in other social spaces. See my sharing policy for ways to share.

PLACER COUNTY MARKET TRENDS

Placer County 2014 recap by sacramento appraisal blog - smaller

Placer County Year-End Stats:

1) Median Price ended at $387,000
2) Average Sales Price ended at $428,629
3) Average Price per sq ft ended at $192
4) Sales volume was down 2.96% in 2014 compared to 2013.
5) FHA sales decreased by 9% from 2013 (76 less sales).
6) There were 19% less cash sales this year.
7) Short sales represented only 5% of the entire market in 2014.
8) Bank-owned sales were only 3.5% of all sales in 2014.

Email me if you want the graphs: If you would like all the graphs in this post (and others), send me an email (make sure to write “I want the market graphs” in the header). You can use these in your newsletter, some on your blog, and some in other social spaces. See my sharing policy for ways to share.

1) Values increased only a few percent over the year:

Placer County median price since 2012 - by home appraiser blog

How much did the market increase in Placer County last year? Overall the median price increased by 8.1%, the average sales price increased by 6.3%, and the average price per sq ft increased by 7.8%. The market saw some appreciation in the beginning of the year, but was fairly flat and really softened over the last two quarters. The stats actually seem a bit higher than the market felt in light of December’s numbers (which were quite a bit higher than the past few months). For instance, the median price had cooled to $375,000 in October, then $365,000 in November, and then December showed up at $387,000, which is just $1,000 under the highest monthly median price of the year. We’ll see how this figure pans out in coming months, but don’t put too much weight on it. As I said a couple days ago when discussing Sacramento, remember that these figures don’t necessarily mean each property has increased in value by 8.1%, 6.3%, or 7.8%. Actual value is only something we can determine on an individual basis.

2) Inventory increased steadily over the year (down in December):

Placer County median price and inventory - by home appraiser blog Housing inventory in Placer County increased steadily throughout the year and was hovering in the higher 2s for the most part. It peaked once over three months at the end of the year, and saw a dramatic Fall to 1.8 months in December (its very normal for inventory to decline in December because there aren’t many new listings coming on the market).

months of housing inventory in placer county by sacramento appraisal blog

Housing inventory was freakishly low in Placer County last month (besides the market about $1M). Keep in mind there are only four listings below $100,000, so don’t put any weight on the “4” number you see for inventory under 100K.

3) It’s taking 20-25% longer to sell a house in today’s market: 

days on market in placer county by sacramento appraisal blog

Last year at this time it was taking anywhere from 45 to 50 days to sell a house, and this year it was taking anywhere from 55 to 60 days to sell a house. Well, technically on average it took 61 days to sell a house last month in Placer County. It’s normal for properties to take longer to sell in the Fall months, and then shorter when the market heats up during the Spring. As you can see, there are different price segments that tend to sell more quickly than others. Generally speaking, the higher the price, the longer it takes to sell.

4) Sales volume was down 2.9% in 2014 compared to last year:

Placer County sales volume - by sacramento appraisal blog

There were 164 less sales in 2014 in Placer County compared with the previous year. This translates to sales volume being 2.9% lower compared to 2013. In contrast, Sacramento County had a volume that was 7.7% lower than the previous year.

5) The Fall showed a normal real estate seasonal cycle:

Placer County median price since 2012 - Fall season - by home appraiser blogIt felt like a fairly normal Fall for the most part (beyond the higher uptick in median price). Remember, don’t make too much of the median price. It may have increased 6% from the previous month, but the average price per sq ft only went up 1%. What does that tell us?

6) The layers of the market at work:

interest rates inventory median price in placer county by sacramento appraisal blog

Real estate is never just about supply and demand. There are so many “layers of the market” that are working to impact the direction of values. Both interest rates and housing inventory will be important factors to watch this coming year.

Thanks for letting me post today. I know these posts are long, but twice a month we get to delve into some big-time real estate trends, and I hope it’s been helpful for you (I know it is for me). The more we can explain what the market is doing and why it is doing it, the more we can help our clients make informed real estate decisions.

Questions: What else are you seeing out there? Anything you’d add?

If you liked this post, subscribe by email (or RSS). Thanks for being here.