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Sacramento vs Placer County

How the real estate market is evolving in Sacramento & Placer County

May 15, 2014 By Ryan Lundquist 1 Comment

If an article is too long, I probably won’t read it. Can you relate? Yet if an article is full of solid information to apply to life or business, I’ll definitely look it over – even if it’s longer. Enter my big monthly post. I hope to highlight the real estate market so you can see it, pick up a few conversation nuggets, and have some images to share too. Take a look below at the latest trends for Sacramento and Placer County.

Two ways to read this post:

  1. Briefly scan the graphs below.
  2. Take several minutes to digest the graphs and commentary.

Enjoy and let me know what you think.

PLACER COUNTY REAL ESTATE TRENDS:

Placer County median price and inventory - by home appraiser blog

Median Price: The median sales price in Placer County is $366,500 as of April 2014. This is 5% higher than April 2013, but fairly steady from where the market was at in the summer of 2013. As you can see, the market sort of leveled off two quarters ago, and has since been fairly flat with a mild seasonal uptick.

number of listings in PLACER COUNTY - by home appraiser blog

Inventory at “Bottom” Levels: Inventory has declined over the past few months (which is normal this time of year). Right now there are 2.5 months worth of houses for sale in Placer County. After spending about 18 months below two months of housing supply, the market is finally back to 2.5 months, which is about where it was when the real estate market bottomed out at the beginning of 2012.

Placer County sales volume - by sacramento appraisal blog

Low Volume, but Increasing: Sales volume has been down by 10% or so in Placer County over these past few months, and April 2014 was down by 15% compared to April 2013. This past month did see an increase though, but it’s fairly normal to see an uptick in volume this time of year. Properties spent an average of 50 days on the market to sell in April 2014 compared to 39 days in April 2013.

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

Flattening Market: There are many layers to the real estate market. This graph helps show how median price, inventory and interest rates work together. An increase of interest rates and less investor cash tends to impact prices, right?

SACRAMENTO COUNTY REAL ESTATE TRENDS:

median price and inventory graph by sacramento appraisal blog

Sensitivity & 2008 Values: The median price in Sacramento County is $265,000 as of April 2014. This is definitely higher than the summer of 2013 and similar to where the market was at in January 2008. Sacramento County has been showing a seasonal uptick over the past few months (this is normal). Yet at the same time sales volume is low (which makes stats weaker), and the market is very price sensitive. This means if properties are not priced correctly, they are sitting. Homes spent an average of 39 days on the market last month compared with 26 days in April 2013. Some neighborhoods and price ranges are very flat, while other areas feel a bit hotter so to speak.

context for median price by sacramento appraisal blog

More Price Context: When taking a wider look at Sacramento County, values are currently close to the beginning of 2008 and the end of 2003 (or very beginning of 2004). Keep in mind each neighborhood might have a different price dynamic, so be careful not to project county-wide stats on every neighborhood equally.

median price in placer county and sacramento county by sacramento appraisal blog

Sacramento vs. Placer: This is what the median price comparison looks like between Sacramento & Placer County.

sales volume in sacramento county by sacramento appraisal blog

Good News of More Volume: The past quarter has had very sluggish sales volume, but last month had a healthy increase in sales. Granted, it is fairly normal to see an uptick from March to April, but an increase doesn’t always happen. In fact, 4 our of the last 5 years did not have an increase at all as you can see in this graph. Ultimately it will be interesting to see if the market will have a stronger next quarter to make up for the slower first quarter. This is something to watch carefully.

number of listings in sacramento - by home appraiser blog

months of housing inventory by sacramento appraisal blog

Declining Inventory: As of April 2014 inventory in Sacramento County is about 1.8 months. Trendgraphix says 1.9 months, but it is really 1.82 months to be precise. This is very low and is creating more competition among buyers. You can read 4 reasons why inventory is low for details about how inventory works.

interest rates by sacramento appraisal blog

Rates & Steroids: Interest rates are almost one percentage point higher than they were than last year, but they are still incredibly low. Keep in mind when rates are this low, they act as a steroid for the market to boost values. The Fed talked about raising rates when unemployment reached 6.5% nationally (it hit that level last month), but now they are backing away from that plan. The housing market and economy may still be too fragile to raise rates, so The Fed will presumably keep rates low for a season to help artificially boost the market or at least try to hold the market from tipping over to experience declines. If interest rates do dip lower for some reason though, it will super-charge the housing market again. We shall see.

average price & average price per sq ft & median price by sacramento appraisal blog

Upticks: The median price, average sales price, and average price per sq ft have all shown increases over the past few months ranging from 1.7 to 2.3%.

interest rates inventory and median price by sacramento appraisal blog

Layers at Work: Now that cash investors have backed off significantly in Sacramento County, the market will presumably be more sensitive to what happens with inventory levels as well as the local economy. We often hear that inventory at 5 months is normal, but think of how low inventory is right now, yet how flat the market has seemed. Could the market remain fairly flat if inventory increased from 1.8 months to 5.0 months?

comparing april 2013 and april 2014 - by sacramento appraisal blog

April to April: When looking at data, it’s always good to compare what was going on last year at the same time with this year. This helps us see how the market has changed.

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

The Region: Last but not least, here is a glimpse of the Sacramento Region. Inventory is at 2.1 months right now. If you want a deeper picture of inventory, check out The Big & Little Story of Inventory.

Sharing Trends with your Clients? If you want to share graphs online or in your newsletter, please see my sharing policy. Thank you for sharing.

I hope this was helpful. I sincerely appreciate you being here.

Questions: What are you seeing in the trenches of the market? What stands out to you from above?

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Filed Under: Market Trends Tagged With: flat market, Home Appraiser, House Appraiser, increasing values, interest rates, inventory, Median Price, Placer County Appraiser, Placer County Real Estate Market, real estate trends, Sacramento County Appraiser, Sacramento Real Estate Market, Sacramento vs Placer County, sales volume, trend graphs

Is the hedge fund cash rampage in Placer County?

December 10, 2012 By Ryan Lundquist 4 Comments

I was talking to a reporter a few days ago about the impact of hedge funds in Placer County. She was asking me if I thought hedge funds have been making a significant impact in Placer County like they have in Sacramento. Take a look at some fresh stats below and let me know how you’d answer her question.

Cash in Sacramento County and Placer County - by Sacramento Appraisal Blog

Cash Sales in Sacramento and Placer County - Graph by Sacramento Appraisal Blog

In short, so far hedge funds don’t seem to be digging deep roots in Placer County like they have in Sacramento County. While the overall percentage of cash buyers has definitely increased in 2012 under $200,000, there hasn’t been a huge surge of purchases by one group in particular. In fact, according to Tax Records, THR California LLC (Blackstone) has purchased less than ten properties on MLS in Placer County as opposed to multiple hundreds in Sacramento County (NOTE: These are only MLS sales. They may very well have other non-MLS purchases). There are of course other hedge funds buying in the market beyond Blackstone, but none have surfaced to the same degree (yet). In 2013 I suspect more hedge funds will become household names in the local media and real estate community.

Question: Why do you think Sacramento County has been on the radar of investors much more than Placer County?

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

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Filed Under: Market Trends, Resources Tagged With: Blackstone, hedge funds in Sacramento, Home Appraiser, House Appraiser, market stats, Placer County Appraiser, Placer County cash purchases, real estate appraisers, real estate market trends, Sac County appraiser, Sacramento County cash purchases, Sacramento vs Placer County, THR California LLC

The smell of new construction in Sacramento & Placer County

April 29, 2011 By Ryan Lundquist Leave a Comment

It’s too early in 2011 to see what this year will hold for new construction, but I’ll admit I feel cautiously optimistic to at least begin to witness some sparks of home building in the Sacramento area. Whether a few new houses in Anatolia, Empire Ranch, Ironworks, The Islands at Riverlake (Pocket Area) or Serenity Cove in West Sacramento, it’s been nice to personally spot new houses being built or planned. After construction nearly dropped off the face of the earth in the Sacramento area over the past few years, it would be warmly welcome to see that trend turn around. 

The graph is based on data from the United States Census Bureau for the number of permits pulled for new construction of single family residential properties.

Unpacking the Comparison of Building Permits:

  • It’s easy to see the very significant decline in building permits for both Sacramento County and Placer County over the past several years.
  • The history of permits in both counties seems to follow the same pattern in terms of an increase from 2000-2005 and then a major decrease from 2005 onward.
  • Sacramento County did have a much larger spike in production during the peak years. This makes sense when considering how many new subdivisions were built in Elk Grove, Rancho Cordova and pockets throughout the county.
  • While Sacramento County had more building permits pulled than Placer County from 1994-2008, Placer County narrowly surpassed Sacramento County in both 2009 and 2010 in total number of permits. 

Where have you seen new construction lately in the Sacramento area? Where would you like to see it? What stands out to you about the graph? Will we see more permits pulled in 2011 than 2010?

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.

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Filed Under: Appraisal Stuff, Market Trends, Resources Tagged With: Anatolia, appraisal service in Sacramento, appraiser in Sacramento, building permits in Placer County, Building permits in Sacramento County, Empire Ranch, graph of building permits, history of permits in Sacramento and Placer Counties, Iron Works West Sacramento, Lundquist Appraisal Company, new construction, Placer County Appraiser, sacramento appraisers, Sacramento vs Placer County, Serenity Cove, The Islands at Riverlake, US Census Bureau

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