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foreclosures in Sacramento County

Steep decline of foreclosures and short sales in Sacramento County

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Everyone knows values have been increasing, so it’s really not a surprise to see that distressed sales have experienced a huge decline at the same time. As I shared on Monday, April and May 2013 were the first two months in over four years where foreclosure sales represented less than 10% of all sales in Sacramento County.

Foreclosures and Short Sales Graph - by Sacramento Appraisal Blog

There are many layers that make up value in a market, such as interest rates, employment trends, supply and demand, the media and public perception, legislation, the amount of cash, affordability, and more. The number of foreclosures is definitely an added layer because it tends to impact prices. Generally speaking, when there are too many foreclosures in a market, prices will decline, and when there are very few, the market has more room to flourish.

foreclosures and short sales in Sacramento County in 2013 - by Sacramento Appraisal Blog

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Questions: Where did the foreclosures go? Why do you think short sales are seeing a decline?

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Tour de Sacramento real estate in 2013

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One of the best trips I ever took was a European backpacking vacation after graduating college. A friend and I traveled through England, France and Scotland for two weeks, and it was simply incredible. In fact, I hope to get back there again in a couple of years as my wife and I have begun talking about doing something big for our 15th anniversary.

Unfortunately my wallet is not thick enough to take every blog reader to Europe today, but I can give you a “Tour de Sacramento” so to speak. Let’s make four quick stops to uncover some of the real estate trends during the first quarter of 2013.

Stop 1: Distressed Sales

Over the past year the market has seen a significant downturn in foreclosure sales. Bank-owned sales essentially have decreased by 20% since the first quarter of 2012, whereas short sales had been seeing an increase until this past quarter.

Distressed Sales in Sacramento County Foreclosures and Short Sales Graph - by Sacramento Appraisal Blog

The market has persisted to gain health as the total percentage of distressed sales has seen a decrease yet again over the past quarter. However, it’s also noteworthy that inventory has been at its lowest point in years.

Distressed Sales in Sacramento County - by Sacramento Appraisal Blog

Stop 2: The Cash Factor

Cash purchases have generally been up in 2013 so far. There are rumors of certain investment funds slowing down their purchasing, but the market is clearly still saturated with investors.

Graph of Cash sales in Sacramento Placer Yolo County 2012 and 2013 - by Sacramento Appraisal Blog

The stats below consider all single family detached sales in Sacramento, Placer & Yolo County. It’s amazing to see that 36.28% of all single family detached sales in Sacramento County were cash. However, when considering all single family sales including condos and halfplexes, 39.06% of all sales were cash in Q1 of 2013.

Cash sales in Sacramento Placer Yolo County 2012 and 2013 - by Sacramento Appraisal Blog

Stop 3: The Breakdown of Buyers

One out of every two sales under $200,000 in Sacramento County has been a cash purchase lately. No, that’s not a typo. It’s no wonder why financed offers have had to be more creative in hopes of getting an offer accepted. It’s become increasingly more common to see buyers make offers above list price, ask for no credits from the seller, offer to pay a certain amount above the appraised value or even remove appraisal contingencies altogether. Yikes! FHA offers saw a slight decrease, and I wouldn’t be surprised to see that persist so long as the climate of low inventory and high-volume cash persists.

Q1 Sacramento real estate stats - cash conventional fha - by Sacramento Appraisal Blog

Stop 4: Unemployment in Sacramento County

Unemployment dropped to 9.5% in Sacramento County as of February 2013. As you can see in graphs below, the jobless rate has overall been trending downward in Sacramento, California and the United States. For reference, the unemployment rate in California right now is 9.6% and the national unemployment rate is 7.7%.

February 2013 unemployment Sacramento County - graph by Sacramento Appraisal Blog

1990 - 2013 - February 2013 unemployment Sacramento County - graph by Sacramento Appraisal Blog

Unemployment in US CA and Sacramento 1990 - 2013 - February 2013 - graph by Sacramento Appraisal Blog

Questions: What stands out to you above? Also, what was the best vacation you ever took?

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

Crunching foreclosure stats and market health in the Greater Sacramento Region

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How is the real estate market doing in the Greater Sacramento Area? Let’s feel out one aspect of the market’s health today by looking at the level of distressed sales in multiple counties such as Sacramento, Placer, Yolo, El Dorado, San Joaquin and more. As you can see in the chart below, most counties in the Sacramento Region have a combined percentage of distressed sales (bank-owned and short sales) between 60-70%. Does it shock you to think that 6 to 7 out of every 10 sales are distressed? Data within a specific neighborhood or city may of course not reflect the trends listed in an overall given county (as in the clear case of the City of Davis in Yolo County), but the countywide panoramic picture is still important to keep in mind when keeping tabs on market health since regional or countywide trends can tend to impact smaller neighborhood markets over time.

What stands out to you about the figures below?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

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