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Market Trends

Seeing the market over two decades

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Buckle up and let’s take a drive through the past 20 years. Where has the market been over these two decades? Since MLS recently made it much easier to extract older data, I had to do this post. I hope you find it useful or interesting – even if you aren’t in the Sacramento market.

SOME THINGS TO KEEP IN MIND:

1) Data: We are only as good as our data and our ability to understand. Some graphs below are very clear in their trends, but others probably aren’t meaningful because of massive data or an enormous price range.

2) Not back: Many lower-priced areas are not back to their price peak in 2005.

3) Back: Some well-established areas have exceeded previous peaks.

4) Different trends: Not all price ranges, locations, and property types have moved the same way, so let’s be cautious about sweeping generalizations about the entire market. After all, the condo market might be far different from the 2-4 unit market or vacant land.

5) Inflation: Prices might be similar today to where they were in 2005, but that doesn’t mean values are the same. I know, that’s so technical, but when we factor in inflation over 13 years, it’s really not the same thing when comparing today’s prices with prices from 13 years ago. Keep in mind the market today has far different dynamics from 2005 also.

6) Bubble: Graphs like this can often lead to conversations about a housing “bubble.” If it’s relevant, please read peak prices and an open letter to buyers worried about another housing bubble.

SIDE NOTE: I’ve been having major website issues over the past 2 months. I’ve switched hosts, and that should solve the problem of down time.

DOWNLOAD ALL GRAPHS: You can download all images as a zip file. I included both a web-friendly size and larger ones. Please use as you see fit (unaltered). If you post somewhere online I always appreciate a link back.

Rosemont:

River Park:

Meadowview:

Vacant Residential Land:

Million Dollar Sales:

Pocket / Greenhaven:

Rancho Cordova:

Sierra Oaks:

Loomis:

East Sacramento:

Duplex Sales:

Gold River:

Land Park:

Elk Grove:

Garden of the Gods:

Sales under $50K in Sacramento County:

Del Paso Manor:

Tahoe Park:

Fair Oaks:

Treelake / Ashley Woods (Granite Bay):

Condo Sales in Sacramento County (and Downtown):

Colonial Heights:

College Glen:

Davis:

West Sacramento:

Bella Vista High School Boundaries:

Arden Park:

Folsom:

Arden Manor:

95815 Zip Code:

4-Unit Sales in Sacramento County:

Roseville:

I hope this was interesting or even fascinating. I’m intrigued and excited about having more data at my disposal (thank you Metrolist). Thanks everyone for your graph suggestions too. I reached out on Facebook, Twitter, and LinkedIn and got to most of what people asked for, though I couldn’t do them all.

Questions: What are your thoughts about the market after seeing the graphs above? I’d love to hear your take.

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The problem of overpricing in real estate

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Overpricing is a problem. You’d think in such a “hot” market that it wouldn’t be an issue, but it is. I’m not trying to dog sellers, but let’s talk about some of the most common pricing mistakes right now. I hope this helps.

1) Getting married to the list price: Sometimes it’s like sellers get married to a lofty list price and become unwilling to budge – even when buyers are refusing to pay that much. It’s as if sellers get paralyzed and cannot move beyond a clearly unrealistic price. My advice? Listen to the market and budge on price as needed.

2) I need this amount to move: I’ve encountered a few sellers recently who priced based on how much money they needed to move. But the market doesn’t care about personal finances or plans. The market only cares about paying a reasonable price for the property.

3) Headlines: At times sellers hear sensational headlines like, “Values are increasing more rapidly than ever,” so they price according to a headline rather than similar sales in the neighborhood market.

4) Out of touch with picky buyers: Buyers these days tend to be more picky than ever about what they purchase, but I’m not sure sellers are really in tune with how finicky buyers are about price, location, and condition. You’d think buyers would be so desperate to get into contract and pay anything because of a housing shortage, but they’re actually quite patient in many cases because they want to wait for the right property and feel like they’re paying a fair price. My advice? Price for real buyers in the neighborhood market rather than that one mythical “unicorn” buyer who is going to pay more for some reason.

5) Sales instead of comps: The most common pricing mistake I see is pricing according to a sale down the street that really isn’t comparable. So a seller says, “I know that house is totally remodeled with a pool, but someone’s going to pay the same amount for my house.” My advice? Price according to similar homes that are actually getting into contract rather than dissimilar properties. Be careful about hijacking price per sq ft figures too.

6) The fallacy of summer: We hear that summer is the hottest real estate season, but the spring season is actually the hottest in many markets throughout the country. By the time summer rolls around the market is actually beginning to cool because it’s been hot for almost two quarters already. During summer listing volume is just about to peak for the year, and that means it starts to take longer to sell, prices often begin to soften for the season, and buyers gain more power to negotiate. My advice? Be realistic about prices today.

7) Zillow: I can’t tell you how often I’ve heard, “But Zillow says my house is worth X amount.” I know, Zillow says stuff like, “We’re only a starting point and a ballpark figure.” Yet in my experience sellers rely heavily on the Zestimate and very often treat it like a definitive ending point rather than a ballpark. Remember, Zillow doesn’t know anything about condition, upgrades, smell, etc… Sometimes Zillow nails the value, but other times it’s off by a substantial amount – even in a tract neighborhood. My advice? Take “The Big Z” with a grain of salt.

8) Other: What else are you seeing out there?

I hope this was interesting or helpful. In light of the market beginning to cool for the season, I thought scratching out these thoughts might be helpful and even save sellers some money (and heartache).

Questions: Which mistake do you see most often? Any stories or insight to share? I’d love to hear your take.

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The waking market, pulling stats like a boss, & the year in review

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The market went to sleep for the holidays and it’s just starting to wake up. Let’s talk about that along with pulling stats like a boss. Then I have a huge market update and review for those interested. 

No sales to support higher values: In a normal January the market is in a weird spot. It’s coming out of hibernation from the holidays, and even though buyers eventually start offering higher prices, the most recent sales might not support higher contracts. In other words, sales from November and December might actually be much lower than what buyers are willing to pay in later January and February because the market has begun to awaken out of a lull. The reality is we might not see any upward value movement in sales stats until March, but the upward trend will begin to happen in January and February before we see it in the stats. Data lags the trend. I remind myself of this every year.

Getting practical: In coming time as the market presumably heats up I recommend looking for a pattern of pending sales (probably higher), watching for properties spending less time on the market, and study what prices normally do this time of year in your area. In many locations prices tend to pick up where they left off in the late summer before they faded during the fall.

Game-changing stats: Paying attention to numbers has literally changed my career, so I wanted to give some tips for how to begin pulling stats for a city, county, neighborhood… Here’s a chart you can use to track price changes and a few other key elements (DOWNLOAD here). I highly recommend carving out a few minutes each month to track some of these basics. Then of course find relevant ways to share the numbers with your clients and contacts.

Here’s a video where I talk through how to use the chart as well as mistakes to avoid. It’s about 10 minutes. Click below (or here) and watch in FULL screen:

–——-——- Big monthly market update (it’s long on purpose) ———–——-

Prices have been softening in Sacramento, but it hasn’t been painfully dull like some fall seasons. Overall prices in the region sloughed last month (not a surprise), it took six days longer to sell, and the year closed out with price metrics being about 8-10% higher than December 2016. The number of listings really took a nosedive last month, but that’s what happens since people don’t list in November and December unless they really have to sell. Listings should increase over the next couple months as the market heats up for the spring. I know hungry buyers feel like inventory won’t be coming, but it’ll happen.

Quick insight: Housing inventory is sparse, but one good thing is inventory seems like it went a little more sideways last year instead of declining sharply. On a positive note, the market ended with the lowest number of foreclosures and short sales in the past decade. This isn’t a shocker, but it’s still a sign of healing after the “bubble” burst more than ten years ago. Prices in 2017 increased about the same as they did the past couple years. Lastly, sales volume has been steady for a few years, and that shows the market has found a rhythm.

Recap of 2017 in Sacramento:

I could write more, but let’s get visual instead.

DOWNLOAD 75 graphs HERE: Please download all graphs in this post and more here as a zip file (includes a stat sheet too). See my sharing policy for 5 ways to share (please don’t copy verbatim).

SACRAMENTO COUNTY (more graphs & stats here):

Sacramento County Stats:

  1. The median price is currently $350,000. It’s about the same as last month & down 0.5% from summer.
  2. The median price is 11.1% higher than the same time last year.
  3. Sales volume in December was 5.6% lower this year than 2016. There were 1392 single family detached sales last month.
  4. It took an average of 36 days to sell a home last month (one year ago it was taking 3 days longer).
  5. The median days on market last month was 21 days.
  6. It took 3 more days to sell in Dec. compared to November (median days).
  7. FHA sales were 20.5% of all sales last month in the county.
  8. Only 0.7% of sales last month were bank-owned & 0.2% were short sales.
  9. The avg price per sq ft was about $221, which declined last month (9.6% higher than last year).
  10. The avg sales price softened about 1.5% last month and is $379,962. This is 10.5% higher than last year.
  11. Cash sales were 13% of all sales last month.

SACRAMENTO REGION (more graphs & stats here):

Sacramento Region Stats:

  1. The median price is $385,000. It softened nearly 1% last month.  
  2. The median price is 10% higher than the same time last year.
  3. Sales volume in December was down 4.7% this year. There were 2202 single family detached sales last month.
  4. It took an average of 42 days to sell a home last month (one year ago it was taking 2 days longer).
  5. The median days on market last month was 24 days, which means properties are selling really quickly.
  6. The median days on market increased by 5 days last month, which shows a slowing in the market.  
  7. FHA sales were 17.5% of all sales last month.
  8. Only 1.6% of sales last month were bank-owned & 0.9% were short sales.
  9. The avg price per sq ft was about $225, which decreased 2% last month (8.4% higher than last year).
  10. The avg sales price decreased 2.5% last month and is 9.1% higher than last year.
  11. Cash sales were 14% of all sales last month.

PLACER COUNTY (more graphs & stats here):

Placer County Stats

  1. The median price is $450,000 and decreased slightly last month.
  2. The median price is 6.1% higher than the same time last year.
  3. Sales volume in December was 3.6% lower than 2016. There were 450 single family detached sales.
  4. It took an average of 48 days to sell a home last month (one year ago it was taking 1 less day to sell).
  5. The median days on market last month was 28 days, which means properties are selling really quickly.
  6. The median days on market increased 9 days last month (don’t read too much into that). 
  7. FHA sales were 12.6% of all sales.
  8. There were only 4 bank-owned sales last month and only 7 short sales.
  9. The avg price per sq ft was $228, which softened about 3% last month (5.7% higher than last year).
  10. The avg sales price is currently $510,174. This is 8% higher than last year.
  11. Cash sales were 14.9% of all sales last month.

DOWNLOAD 75 graphs HERE: Please download all graphs in this post and more here as a zip file (includes a stat sheet too). See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: What are you seeing out there in the market? Anything I missed? I’d love to hear your take.

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