sales volume

Stale real estate headlines & buyers flocking to El Dorado County

January 27, 2021 By Ryan Lundquist 8 Comments

Real estate headlines can get stale quickly, so we have to be really aware of what we’re saying. Is it still even true? Here’s an example of what I mean.

Headlines in recent years: Rising fire insurance rates in California are causing buyers to pull back from more rural areas.

New stats that change the narrative: In El Dorado County this past year we actually saw a larger increase of sales volume WITHIN areas that have higher fire insurance. Take a look at this visual. Typically El Dorado Hills & Cameron Park don’t have fire insurance issues whereas the rest of El Dorado County does (generally speaking). In short, volume in “fire areas” grew more than areas without issues.

Off the charts: Here is a visual to show how off the charts sales volume has been in El Dorado County. There was an initial COVID dip early in the year and then a massive increase WAY beyond normal.

QUICK TAKEAWAYS:

1) The market is always changing, so we need to be sure our narrative is informed by actual data instead of headlines from last year.

2) Uncertainty about fire insurance rates clearly didn’t hold back buyers this year in El Dorado County. Part of this could stem from rates regulating and buyers getting used to higher rates, but there is no mistaking El Dorado County had enormous pandemic migration. Thus incoming buyers simply cared way more about having land and space than fire insurance rates.

3) I’ve only run stats for El Dorado County, so I’d be careful about saying fire insurance is no biggie throughout California. Moreover, this trend could change in coming years. It’s actually very difficult to parse fire stats for Placer County. If anyone has ideas for how to do that I’m open ears. I just haven’t found a way yet.

VIDEO MARKET UPDATE:

Yesterday I did a big market update at Joel Wright’s Residential Roundup event. This is 38 minutes. Enjoy if you wish or skip to the last slide with closing thoughts to focus business in 2021. Watch below (or here).

PRESENTATION TODAY: I’m speaking at a Placer County Women’s Council of Realtors event from 10-11:30am. I’ll have one hour to unpack the market and I have some fresh Placer and El Dorado stats too. Sign up here.

Thanks for being here.

Questions: What are you seeing in El Dorado County or other areas? What are you hearing about fire insurance? I’d love to hear your take.

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The aggressive & slowing housing market

October 6, 2020 By Ryan Lundquist 25 Comments

Insane. Crazy. Irrational. The housing market has been described this way in many places around the country lately. But in the midst of freakishly high demand there is still a seasonal rhythm to see in the background. Let’s talk about that.

Today’s post seems long, but it’s mostly images.

BIG POINT: Understanding what the market normally does throughout the year helps us give good advice, make plans, do a better job with valuations, and spot when something abnormal is happening.

WHAT DOES THE MARKET DO DURING THE YEAR?

Seven years in one graph? Yep. This visual looks at the average of seven years worth of sales for each month, so even though there is just one line we end up with a solid visual of how the market behaves throughout the year. This is so important because being a real estate expert involves lots of things, but one big factor is understanding how the market moves.

Tutorial: I’m actually game to do a video tutorial on how to make this visual. If I get a number of people interested I’d be glad to do that. Let me know.

Here is 2020 showing an abnormal trend…

UPDATE: I think some people are caught on my title instead of what I am communicating in the body of this post. Look, the market is not soft. Prices have continued to rise and we’re having an abnormal fall season so far in many ways. Frankly, this fall is far more aggressive than it should be for the time of year. Yet sales volume is starting to flatten too, which is a sign of some slowing. That’s what the stats and visuals are indicating right now, so that’s the story we ought to understand and tell. When saying this though I think some people hear, “The market is dull,” but that’s not what I am communicating. The market is always changing and doing different things. Why can we not clearly and confidently say, “The market is white hot, but we’re also seeing sales volume slow down”?

NOT THE SAME:

Many markets have a similar pattern to the one above, but others look totally different because of weather, being a vacation destination, etc…

MARKET UPDATE VIDEO: Here are a few things on my mind right now.

ANOTHER VISUAL:

Here’s a different way to look at sales volume. Check out this year in black compared to previous years. What is volume doing?

THE TAKEAWAY:

The black line shows sales volume looks like it hit its peak for the year a couple months ago, so even though we are calling this market white hot, we can still see a slowing trend creeping in the background. This doesn’t mean the market is dull (I didn’t say that). In short, this year we’re beginning to see a change in volume, but overall the fall season hasn’t been normal because by now prices are usually cooling off and it should be taking longer to sell rather than fewer days.

Okay, two more counties…

PLACER COUNTY & EL DORADO COUNTY

Check out the rhythm of the market in these two counties. This is a really good picture for how the market tends to behave through the year.

Now check out the black line. Do you see the increase lately? Like I said a few weeks back we’ve seen a huge influx of buyers in Placer & El Dorado County. In other words, the black line shows an abnormal amount of buyers lately. Also, we see what looks like a seasonal slowing of volume as the black line looks to be curving down.

Anyway, I hope this was helpful or interesting.

Thank you again for all of your support in my life these past months. I am fully back to work and doing my best to pace myself.

Questions: Do you think this fall we’re going to see a big slowing or barely any slowing? What are you seeing out there? I’d love to hear your take.

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Lot size mistakes & pent-up demand

June 24, 2020 By Ryan Lundquist 56 Comments

Two things. Let’s talk about a very easy mistake to make with lot sizes and then let’s look at pent-up demand right now.

LOT SIZE MISTAKES: I’ve seen it happen twice lately where Tax Records lists the lot size, but it’s actually incorrect. In one instance Realist showed the lot was five acres when in fact it was only two acres. In another example it said two acres when it was less than one. Yikes.

My advice? Thankfully most of the time we can trust the lot size in Tax Records, but it’s still a good idea to quickly double-check just to be sure. After all, listing the wrong lot size in MLS or an appraisal could lead to litigation, right? What we can do is view the plat map to see if there is anything abnormal as well as try to piece together the lot size (easy to do if it’s a rectangle). Also, when viewing a property in MLS we can click on “See Map” and then “Layers” to view the lot size. All I’m saying is taking an extra minute to do these steps is a good habit that can be a safeguard. How would you handle it though if the lot size was different in Tax Records, MLS, and the plat map? Which one are you going with? I’d love to hear your take in the comments.

NOTE: A land surveyor is going to be the definitive source. I’m just saying my advice above helps give us clues into when something is not right with a lot size.

Moving on to trends…

WEEKLY VIDEO: I’m really excited for this week’s video. On one hand it looks like the seasonal market has begun to crest, BUT it’s as if real estate has sped up a little after slowing down. Watch below (or here).

PENT-UP DEMAND: Check out these visuals to show some serious pent-up demand being expressed. For eleven weeks now the market has been rebounding after an initial dip when the pandemic began. And for five weeks in a row we’ve literally had MORE pending contracts than new listings in Sacramento.

VOLUME NO LONGER DOING THE LIMBO: A big trend we’ve been seeing is sales volume is starting to come back. In fact, this past week is only down about 10% from the same time last year. This is huge because a couple months ago we were consistently down 30-40%. The x-factor is having more pending contracts from 4-6 weeks ago finally starting to close.

LET’S WATCH THE COVID-19 NUMBERS: Unfortunately we’re starting to see COVID-19 cases tick up again in quite a few states. As it relates to real estate it’s going to be important to stay in touch with the psyche of buyers and sellers since a trend of more cases can shape whether people engage or sit out of the market. Moreover, it’s a wonder if different areas and states will have some form of lockdown again too.

ONE MORE THING: If you need some background noise, here’s a 30-minute Q&A I did with Rachel Adams Lee to talk about the Sacramento market. And yes, I mentioned my love for Breaking Bad and that I don’t like Downton Abbey (sorry). Enjoy if you wish.

Thanks for being here.

Questions: Have you ever seen that lot size mistake in Tax Records? What are you seeing in the market right now? I’d love to hear your take.

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Seven hundred missing sales

May 6, 2020 By Ryan Lundquist 12 Comments

We’re obsessed with prices. OBSESSED. But real estate is about way more. In fact, if we want to understand a market we need to move beyond a laser focus on prices. On that note, let’s talk about sales volume.

1) Seven hundred missing sales: There were about 700 fewer sales this April compared to last year in the Sacramento region. In other words, sales volume was down about 30% last month from April 2019.

2) Volume reflects pendings from the past: In mid-March the housing market started to react to the coronavirus and in three weeks pending contracts dropped 45%. Well, pending contracts from back then started to close in April, and that’s the reason why we saw a big drop in monthly volume.

3) Sensational: It’s easy to get sensational with stats like this and say the housing market is crashing, but we’ve been in a pandemic and these types of numbers at 30% are what we’d expect. Moreover, we’re seeing figures like this in many markets across the country. Keep in mind pending contracts have been on the rise for the past month, which means we can expect sales volume figures to grow in a month or two when these new ones close.

4) It’s about more than prices: The reason I’m so interested in sales volume is because it’s possible for prices to remain stable even though the number of actual sales has changed dramatically. So while it’s easy to say, “Hey, prices are okay,” I think the bigger headline has to do with what is happening behind the scene with sales volume. I talked about this in a webinar this week here.

Now let’s get visual.

FRESH VISUALS TO SHOW SALES VOLUME:

OTHER VISUALS TO SHOW WEEKLY / DAILY CHANGES:

RESOURCES:

New market video: Here’s my weekly market update. It’s 15 minutes and I talk through some big stats this week that show buyers and sellers are coming back to the market. Check it out below (or here).

A pandemic webinar: On Monday I did a 90-minute webinar with the Sacramento Association of Realtors. This is almost an hour and I trimmed the first ten minutes because it was a recap of my weekly video. Watch below (or here).

Videos this week: I’ve been doing lots of video conversations lately. I figured I would post the recorded ones in case anyone wants to listen.

4/30/2020 Conversation with Steve LaMothe
5/01/2020 Conversation with Anthony Alfano & Others

WEBINAR NEXT WEEK: I’m doing a one-hour webinar next week for Safe Credit Union on May 13th. It’s free. Sign up here if you wish.

Appraiser John Carlson GoFundMe: John is an appraiser in Southern California and he was diagnosed with cancer and hospitalized. I invite you to pray for him and donate if you can. See more here.

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

Questions: What are you noticing happening with the market these days? Anything to add? What did I miss?

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

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