Seeing the forest & the trees in real estate: Part II

Two weeks ago I talked about seeing the forest through the trees in real estate. The big point was it’s easy to look so closely at the most recent stats that we don’t see the bigger picture of the market. It’s sort of like noticing only the trees instead of the forest (hence the title). Anyway, in today’s big monthly market update I wanted to show how this concept actually works in real life when crunching numbers in the Sacramento area. Whether you’re local or not, I hope this will be interesting or even provocative for how you think about and share housing trends. I’d love to hear your take in the comments below.

The forest and the trees image - sacramento appraisal blog - image purchased and used with permission from 123rf dot com

Interest Rates & Nerf Battle: Before diving in, I have two quick things to share. Unless you’ve been in a bunker without internet access, you’ve probably heard the Fed finally increased rates. There is some good discussion unfolding on a post on my Facebook page. I’d love to hear your take there or here. Also, in non-real estate news, I recently built a Nerf gun battlefield out of pallet wood for my son’s birthday. Check out a quick video tour at the bottom of the post (or here).

Recommendations for reading THE BIG MONTHLY POST: Compare the numbered bullet points to get a sense of the latest numbers (the trees) with older stats (the forest). If you’re short on time, just skip the graphs or download them for later use. The big question today: What difference does it make to look at both recent numbers and year-old numbers? If you’re new here, once a month I do an in-depth market update, whereas other posts are short and sweet. I know the post is long, but it’s on purpose (thanks for reading).

SACRAMENTO COUNTY:

The Latest Numbers (Trees):

  1. DOM: It took 3 more days to sell a house last month than two months ago.
  2. Volume: Sales volume declined 18% from the previous month.
  3. Inventory: Housing inventory stayed about the same as the previous month.
  4. Median Price: The median price has been the same for 7 months.

Last Year’s Numbers (Forest):

  1. DOM: Last year in November 2014 it was taking 6 days longer to sell.
  2. Volume: It’s normal for volume to decline from October to November, so highlighting an 18% “decline” is silly. The bigger story is volume this November is actually 12% higher than last November.
  3. Inventory: Current inventory is 36% lower than last year at the same time.
  4. Median Price: The median price was 5.8% lower last year, which reminds us values have seen a modest uptick this year.

Some of my Favorite Graphs this Month:

price metrics since 2014 in sacramento county

inventory - November 2015 - by home appraiser blog

CDOM in Sacramento County - by Sacramento Appraisal Blog

seasonal market in sacramento county sales volume 2

market in sacramento - sacramento appraisal group

DOWNLOAD 61 graphs HERE: I have many more graphs you can download for study, use in your newsletter, or share some on your blog. See my sharing policy for ways to share (please don’t copy this post verbatim).

SACRAMENTO REGIONAL MARKET:

The Latest Numbers (Trees):

  1. DOM: It took 4 more days to sell a house last month than two months ago.
  2. Volume: Sales volume declined 20% from the previous month.
  3. Inventory: Inventory increased by 3% from the previous month.
  4. Median Price: The median price is down 1% from a few months ago.

Last Year’s Numbers (Forest):

  1. DOM: It took 5 days longer to sell a house the same time last year.
  2. Volume: Sales volume in 2015 is actually 9% higher than last year. Also, in 2014 sales volume declined 23% from October to November, so let’s not freak out about the 20% “decline” above.
  3. Inventory: Current inventory is 28% lower than last year at the same time.
  4. Median Price: The median price was 9.7% lower last year at the same time.

Some of my Favorite Regional Graphs:

prices in sacramento region - FHA and conventional - by appraiser blog

months of housing inventory in region by sacramento appraisal blog

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

median price and inventory in sacramento regional market

number of listings in sacramento regional market

PLACER COUNTY:

The Latest Numbers (Trees):

  1. DOM: It took 4 more days to sell a house last month than two months ago.
  2. Volume: Sales volume declined 22% from the previous month.
  3. Inventory: Inventory increased by 10% from the previous month.
  4. Median Price: The median price has been jumping up and down for the past few months (generally hovering between $390-400K).

Last Year’s Numbers (Forest):

  1. DOM: Last year it took an average of 5 days longer to sell.
  2. Volume: Sales volume this November was 12% higher than last November.
  3. Inventory: Current inventory is 23% lower than last year at the same time.
  4. Median Price: The median price was 5-7% lower last year at the same time.

Some of my Favorite Placer Graphs this Month:

Placer County sales volume 2 - by sacramento appraisal blog

number of listings in PLACER county - November 2015

months of housing inventory in placer county by sacramento appraisal blog

days on market in placer county by sacramento appraisal blog

Placer County price and inventory - by sacramento appraisal blog

Quick Market Summary: On one hand the market in Sacramento has been slowing down. This is normal to see during the fall, and we see a slowness with less sales volume compared to a few months ago, increased days on the market, and a slight increase in housing inventory. The bigger story though is how much different the market is this year compared to last year. In 2014 the fall was extremely dull and incredibly overpriced (as evidenced by 300-400+ price reductions every day). This year housing inventory is over 20% lower, sales volume has been roughly 10% higher, it’s taking 5-6 days less to sell a house, and price reductions have been far less of an issue. However, even with strikingly low housing inventory and more glowing numbers this fall, if the price is not right, buyers are not pulling the trigger. Bottom line. Well-priced listings are tending to attract multiple offers, but otherwise there are homes that are being priced higher that are sitting instead of selling. Sellers would be wise to remember prices tend to soften in the fall, which means pricing like it’s the spring probably isn’t a good move.

Nerf Battlefield I built: Okay, now let me give you a quick tour of a pallet wood Nerf battlefield I built for my son’s birthday. Yes, an epic war happened just two weeks ago in my backyard. Check it out below (or here). Locals, if you want to borrow it for a birthday party, feel free to reach out (you have to pick it up, return it, sign a liability waiver, and of course be trustworthy).   🙂

DOWNLOAD 61 graphs HERE: I have many more graphs you can download for study, use in your newsletter, or share some on your blog. See my sharing policy for ways to share (please don’t copy this post verbatim).

Questions: What stands out to you when comparing the latest numbers with older stats? What impact do you think an increase in rates will have on the housing market? I’d love to hear your take.

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

High demand persists in the Sacramento real estate market

What is the real estate market doing? That’s not always a quick 10-second answer you can give someone while standing in line at Starbucks. Yet here’s the scoop: Demand is very high, values are up, and inventory is down. We are seeing exactly what we would expect to see in a Spring market, and I’d like to invite you to unpack the market with me in this post so you can share specific trends with your clients.

buyers are ready to pull the trigger - image purchased by sacramento appraisal blog and used with permission

One Paragraph to Explain the Market: The market is having a normal Spring so far. Prices are up, sales volume is increasing, and housing inventory is down. Buyers are hungry out there, which is seen with pendings being 25% higher in the regional market in March 2015 compared to March 2014. Cash sales continue to decline in volume, while FHA buyers are gaining a greater share of the market. Short sales and bank-owned sales are still hovering at very low levels, though there was a slight uptick in volume this past quarter (nothing to sound the alarm about). It took an average of 51 days to sell a house in the region last month, which is 4 days longer than it took last year (thus while the market feels hot, we can also see the market is slowing down too). Well-priced listings are going quickly and experiencing multiple offers, but properties with adverse locations and/or a lack of upgrades are tending to sit on the market. There is a huge demand for quality inventory, yet at the same time the market is price sensitive since buyers are showing discretion. Many neighborhoods over these past few months experienced a seasonal increase in value (not all areas though). Remember in coming time that inventory historically sees a huge increase from April onward, and that can very easily change the tone of the market.

NOTE: This post is longer since it is my big monthly market update. I am experimenting with more graphs and less text. Do you miss the numbers and bullet points? I’d love some feedback.

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

DOWNLOAD 62 graphs HERE for free (zip file): Please download all 62 graphs here as a zip file (or send me an email). Use them for study, for your newsletter, or even some on your blog. See my sharing policy for 5 ways to share.

SACRAMENTO REGION (Sac, Placer, Yolo, El Dorado):

median price and inventory in sacramento placer yolo el dorado county

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

months of housing inventory in region by sacramento appraisal blog

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

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

SACRAMENTO COUNTY:

Median price and inventory since 2012 by sacramento appraisal blog price metrics since 2014 in sacramento county

cash in sacramento county

fha and cash in sacramento county - by sacramento appraisal blog

Volume and cash since 2009 - by Sacramento Appraisal Blog

reo and short sales in sacramento county

months of housing inventory by sacramento appraisal blog

CDOM in Sacramento County - by Sacramento Appraisal Blog

sales volume through feb 2015 in sacramento county

sales volume in march in Sacramento County since 2001

PLACER COUNTY:

Placer County median price and inventory - by home appraiser blog

days on market in placer county by sacramento appraisal blog months of housing inventory in placer county by sacramento appraisal blog

Placer County median price since 2012 - by home appraiser blog

Placer County sales volume - by sacramento appraisal blog

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

Questions: How do you think sellers and buyers are feeling about the market right now? What are you seeing out there?

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