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home prices

Home prices during the pandemic

May 27, 2020 By Ryan Lundquist 19 Comments

What are prices doing? That’s the question I’m getting asked the most. Here are some thoughts about how to look at prices during the pandemic. I also have two brand new price visuals.

FIVE THINGS TO KEEP IN MIND ABOUT PRICES:

1) Eggs in one basket: I recommend watching multiple price metrics instead of putting all our eggs in one basket. So in addition to the median price we can watch the average sales price and average price per square foot.

2) Pure pandemic data: When May stats come out we’re likely going to see 80-90%+ of those sales having gotten into contract after mid-March when the pandemic began to affect us. Thus May sales will be a stronger indicator of pandemic trends than April sales.

3) Seasonal rhythm: It’s key to understand the seasonal rhythm of the market because it helps us spot what is normal and not. For example, the median price usually increases from March to April, but this year we saw the median price dip instead. What does this mean? We need time to understand it. For now we’re recognizing something has happened that is less common. It’s worth noting we often see the median price climax around May or so, which means if we see prices soften in coming months we’re going to have to ask whether it’s a seasonal thing, pandemic thing, or something else.

4) Prices are the last thing to change: We often obsess over prices and look to them first to understand a real estate market, but prices are usually the last thing to change. In other words, we experience a difference first in the listings and the number of sales happening before the trend eventually catches up to prices.

5) Weekly & monthly: I recommend looking at the market in monthly chunks, but it’s also worth watching prices by the week. The huge downfall of weekly prices is they shift dramatically depending on what sold that week. This is why it’s best to look to monthly data (but still get clues from weekly data).

MONTHLY PRICES:

WEEKLY PRICES:

CONCLUSION: Right now it looks like most price metrics have held fairly steady or even increased slightly, but the median price in the region dipped 1% recently. Some weekly price metrics have seemed to soften lately, but we’ll see what the stats show us in a couple weeks when reporting May data. Ultimately my sense is many neighborhoods feel flat and others at lower price points are still having upward pressure. The reality is we have a market with tight inventory and lots of competition. The temptation is to think home prices would be tanking during a pandemic, but that’s not what we’ve seen. For reference, this past week there were more pending contracts than before the pandemic began (I talk about this in my video). By the way, are any areas declining? Let me know what you’re seeing in the trenches.

RESOURCES:

New market video: Here’s my weekly video where I talk about climbing back to pre-pandemic levels. This is about 15 minutes. Check it out here (or below).

I hope this was interesting or helpful. Thanks for being here.

Questions: What are you paying attention to right now to gauge price movement? What did I miss? Anything to add?

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Filed Under: Market Trends Tagged With: coronavirus effect in housing, COVID-19, home prices, housing trends, obsession with prices in real estate, price changes, price movement, prices during the pandemic, real estate pandemic market, Sacramento Appraisal Blog, sacramento housing market, watching real estate prices

A quick recap of February’s real estate market in Sacramento

March 6, 2014 By Ryan Lundquist 1 Comment

Let’s do a quick recap of how real estate unfolded in February in Sacramento County. There are two ways to read this post: 1) Briefly scan the graphs below in 30-ish seconds; or 2) Take a few minutes to digest the graphs and commentary.

February sales in sacramento county by sacramento appraisal blog

Sluggish Sales: It’s normal for there to be less sales during colder months, though overall the market has felt sluggish. That’s my take and many real estate agents have also been talking about how the market has seemed to lag since the beginning of the year (though conversations are beginning to discuss the market heating up for Spring).

sacramento real estate market trend graph houses sold since 2008 by sacramento appraisal blog

Similar to January: Sales were fairly similar to January in that there were only about 950 sales (single family detached). This number will go up slightly in coming days as more sales are reported, but it’s strong enough now to say this past month was fairly similar to the previous month in regards to sales volume.

sacramento real estate market trend graph median price and inventory since 2012 by sacramento appraisal blog

Median Price Increase: The real estate market bottomed out in early 2012 after many years of decline, and the graph above charts the market rebound. The median price since January 2012 has risen from $160,000 to $259,000 and last month saw an increase from $240,000 to $259,000. Technically we could talk about how real estate increased by 8% last month, but sales volume has been REALLY low, which makes the median price weak since there aren’t as many sales to pack into the data set. So take this huge increase with a grain of salt. We could also say the median price has not been at $259,000 for six years either, but let’s try to avoid sensationalism based on one month of data during a Winter season that had VERY few sales.

inventory since 2011 by sacramento appraisal blog

Story of Inventory: Inventory is now at 2.5 months, which means on a monthly basis there are enough listings to satisfy two-and-a-half months worth of buyers. This is still a low figure, which leaves some room for very decent competition (but not the blood bath of last year when inventory was at one month). Keep in mind there are about 2300 pending listings right now too, which is a huge number. Some of these pending sales will of course fall out of contract, but many should close to help boost an increase of sales in March (which is the norm in Sacramento County).

sacramento real estate market trend graph interest rates since 2001 by sacramento appraisal blog

Interest Rates Dipped: Interest rates saw a slight decline from January. When rates began to increase between May and June last year, it really impacted the real estate market and definitely helped to cool off values (investors began pulling back around the same time too). The market is definitely sensitive to the direction of interest rates and inventory in particular, so it’s important to watch trends carefully and consider the implications for the future.

sacramento real estate market trend graph median price interest rates inventory since 2008 - by sacramento appraisal blog sacramento real estate market trend graph median price interest rates inventory since 2011 - by sacramento appraisal blog

Layers Working Together: I know I am constantly talking about the layers of the real estate market. I don’t mean to beat a dead horse, but watching how trends are unfolding together can help give us clues into how the market may unfold in coming time.

sacramento real estate market trend graph median price and inventory since 2001 2 by sacramento appraisal blog

Some Context: If you’re looking for context for price levels, current values are similar to what they were during the first quarter in 2008 and toward the last quarter of 2003. Of course this is for the entire county and specific neighborhoods can vary greatly. Classic neighborhoods tend to be ahead of county numbers and the condo market tends to lag behind county numbers.

If this was helpful for you, please forward it to others.

Share the Graphs: As always, you can use these images unaltered in your newsletter, on social media sites or blog posts (just link back). See my sharing policy for more details about 5 different ways to share my content. Or if you need a quote for a blog post you’re writing, let me know.

Question: What are you seeing out there in the market? Do you sense Spring fever beginning to kick in or does it seem like the market is still lagging?

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Filed Under: Market Trends Tagged With: appraiser in Sacramento, Home Appraiser, home prices, home values, House Appraiser, interest rates, inventory, Real Estate Appraiser, real estate market trends, Sacramento Real Estate Market, trend graphs

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