It’s not just about numbers. Look, I geek out over stats, but sometimes all we need to do is drive around town or have a few conversations to see the market. Today I wanted to share some trends I’m seeing by sharing photos I’ve taken recently. Then for those interested we’ll get into the numbers in my big monthly market update below. Anyway, let’s take a drive.
The rage of modern homes: Modern units like this are popping up in Sacramento in places that are typically close to Downtown. This small development is located in Midtown.
Flipping seminars: I’ve seen this guy on late-night TV promising to teach people how to flip homes. The problem? The market isn’t actually that great for flipping in Sacramento right now. Read about celebrity flipping seminars here.
The Prince tree: A local artist in Citrus Heights paid tribute to Prince in her front yard. I know something like this would not fly in an HOA community, but it reminds us there is maybe some room for creative expression in real estate.
Marijuana homes getting busted: There was a big raid last week where federal agents targeted 75 homes in the Sacramento region that were suspected to be “grow houses”. Remember, recreational cannabis is legal in California, but it’s never legal to have a commercial grow operation in a residential property. Anyway, I came across a different article in the SacBee that listed nine addresses of previous grow houses (golden data for appraisers).
Tearing down the neighborhood: A ranch house in Arden Park was purchased for $462,000 and torn down to build a custom home (currently pending close to $1.3M). This doesn’t happen in every neighborhood, so I’m always asking questions: What is being built? Who is buying? What is being flipped? Where is the bottom of the price market? Where is the top?
Neighborhoods that are changing: This is a colorful six-unit modern project in Oak Park off 2nd Avenue. Modern units like this are starting to pop up – especially around The Broadway Triangle.
Here’s a modern project under construction on 1st Avenue in Oak Park.
The word on the street (while eating tacos): Every few months or so I get together with a group of real estate friends to eat at Chandos (my fav taco joint). It’s not like we gather to have exclusive rigid market talk, but I always leave with some insight because our taco club has investors, a loan officer, and a Realtor / flipper. I find understanding a market is about crunching numbers, but it’s also about the word on the street. This is why I regularly ask people, “What are you seeing out there?”
I hope that was interesting or helpful. Anything to add?
And now for anyone interested in the numbers….
–——-——- Big monthly market update (it’s long on purpose) ———–——-
Spring is definitely here. Well, the market has been alive for a couple of months, but we’re now really starting to see it in the stats. The median price rose about 4% in the region last month and it’s up 9% from last year. Overall we’re seeing all the normal signs of a spring market in that it took 7 less days to sell last month, more listings are hitting the market, and sales volume is increasing for the season. Housing inventory is up slightly in the region from where it was last year and so is sales volume (though volume is down 1.5% in Sacramento County).
New recap images: I spend so much time putting together graphs, but I’ve struggled to figure out a way to quickly sum things up. Anyway, here’s a stab at a summary. Do you like these? Anything you’d change? Feedback is welcome.
A few quick things:
Not much cash actually: It’s easy to believe cash is dominating – especially from the Bay Area, but it’s really not (did you hear that sellers?). Cash sales were 15% of all sales last month in the region and in Sacramento County we actually have about 3% less cash this year so far.
Oh dang… the median price: If you didn’t know, the median price is now 6.9% lower than when the “bubble” burst in Sacramento County in 2005. I tend to see jaws drop when sharing this stat, but here are some things to keep in mind about bubble conversations. Remember, there is no formula that says our market will “pop” if we go 6.9% higher, so it’s important to not get too stuck on the previous peak. Today’s market certainly has an inflated feel, but it’s also being driven by different factors than 2005 too, so it’s not a perfect comparison to always look back to 2005. Anyway, let’s not get too side tracked, but navigating this conversation will be key in coming time for real estate professionals, and I’ve heard some sellers wanting to list too in light of how high prices are.
Zillow is going to sell homes: Yesterday HousingWire reported Zillow is going to be selling homes. There was suspicion this would happen, but The Big Z always denied it. Well, the cat’s out of the bag and I’m wondering how this will unfold. I’m also wondering if they’re going to try to chop agent fees. Let’s talk about this more as things develop. On a side note, will we have to watch listings and sales on Zillow in addition to MLS?
I could write more, but let’s get visual instead.
SACRAMENTO COUNTY (more graphs here):
SACRAMENTO REGION (more graphs here):
PLACER COUNTY (more graphs here):
Questions: What images around town remind you of what the market is doing? I’d love to hear your take.