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Yolo County

The housing market nobody predicted

January 12, 2021 By Ryan Lundquist 10 Comments

Nobody predicted 2020. Who would’ve thought during a pandemic we’d see such an explosive year in real estate? The expectation was that the market would start to tank, but we saw the exact opposite. It’s not just Sacramento either because many areas of the country experienced this same dynamic. Anyway, enjoy some brand new visuals if you wish. Thanks for being here.

THE SHORT VERSION:

Here is a highlight reel to talk through some of the bigger themes this year. In short, the stats are stunning.

What stands out to you?

THE LONGER VERSION (organized by county):

1) Sacramento Region
2) Sacramento County
3) Placer County
4) El Dorado County
5) Yolo County
6) Bonus visuals

I welcome you to share some of these images on your social or in a newsletter. Please use this stuff. In case it helps, here are 5 ways to share my content (not copy verbatim). Thanks.

1) SACRAMENTO REGION:

 

2) SACRAMENTO COUNTY:

3) PLACER COUNTY:

4) EL DORADO COUNTY:

5) YOLO COUNTY:

6) BONUS VISUALS:

Here are some extra regional graphs to show how various counties are moving together.

 

Other visuals: Not that you needed more, but check out my social media in coming days and weeks for extra visuals. I am posting daily stuff on Facebook, Twitter, and LinkedIn. Oh, and sometimes Instagram.

Thanks for being here.

Questions: What stands out to you most about 2020 real estate? Any stories to share? I’d love to hear your take.

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

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Filed Under: Market Trends Tagged With: annual recap of housing 2020, Appraisal, appraisal blog in sacramento, Appraiser, cash sales, El Dorado County, Greater Sacramento appraisal blog, Housing market 2020, housing trends, million dollar sales, Placer County, price growth, real estate recap, rising prices, Sacramento Appraisal Blog, Sacramento County, sacramento regional housing market, Yolo County

Will buyers step on the gas or brakes in 2019?

January 10, 2019 By Ryan Lundquist 27 Comments

It’s the big question right now. Will buyers put their foot back on the gas pedal or will they continue to put on the brakes? For the past couple quarters in many markets around the country buyers seemed to show some resistance to prices and back off the market a bit. So we saw more sluggish sales volume, and now we’re wondering if it’s going to continue into the new year. I have a few quick thoughts and then there’s a big monthly market update for those interested.

What will buyers do in 2019?

1) We need time: Just like a dating relationship needs time to figure out where it’s heading, we need a little space to see where the market is going to go. In the next 30-90 days especially we should get a better understanding of the direction of the market.

2) Interest rates are a band-aid: Mortgage rates are declining again and that can be a steroid to help buyers jump back into the game. During the second half of last year there was a strong negative reaction to rate hikes, so we’ll see if lower rates today can create a similarly strong positive reaction to propel buyers back into the market. But let’s remember low rates are really just a band-aid on a gaping wound. What I mean is low rates offer a temporary solution to create more sales right now without making any dent in the huge issues of a housing shortage and affordability.

3) What to watch: I have a couple quick recommendations for what to watch over the next few months. First of all, know what is normal for the spring market. What normally happens to things like sales volume, inventory, prices, days on market, etc..? Knowing what is normal can help us spot what is not normal. Secondly, I recommend keeping a close eye on listings. Is the market absorbing inventory? Are properties getting into contract? And is the number of pending sales normal or not? Remember, if pendings are anemic today, in a couple of months these properties will close escrow and show up as anemic sales volume. So by watching listings and pendings today we can get an idea of what sales might be like in a couple of months.

I hope this was interesting or helpful.

—–——– Big local monthly market update (long on purpose) —–——–

There were two parts to the market in 2018. The first half of the year was fairly normal, but the second half definitely slumped. Here’s some things to consider right now.

DOWNLOAD 70+ graphs: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

The Camp Fire and volume: Sales volume slumped 11% these past two quarters, but December was particularly sluggish. In fact, it was the worst December in volume since 2007. Furthermore, in 20 years we’ve only seen two lower Decembers in the Sacramento Region. On one hand we figured volume would be anemic for December because it’s been more sluggish for two quarters, but then it was painfully low (25% lower). In short, if this is the actual trend, it could be a big issue if we start to see volume slump each month by 20%+. It would be a sign the market is starting to change even more dramatically. However, there could be more to the story. Let’s not forget the devastating Camp Fire in November. I mention this because in Sacramento the smoke from this tragic fire was with us for two weeks or more, and many locals stayed indoors because of the unhealthy air quality. Thus this could have led to less pending sales in November, which in turn led to less closed sales in December. I’m not saying the fire is the culprit behind our dismal December, but I think we have to at least entertain it could have been a factor to a certain extent. Yet to be fair if we see other areas of California without any fire influence show a similar dip, then I’ll be the first to say the fire didn’t have any effect. For now I think it’s okay to keep it on the table as a possibility, but at the same time let’s not blame the fire for the trend of slumping volume.

Slowing, blah, blah, blah: We’re all pretty tired of hearing words like softening, shifting, slowing, and slumping, but that’s the nature of the beast when the market changes. The trend graphs below show higher inventory, it took longer to sell these past few months, and prices sloughed as they normally do. Beyond sales volume being anemic, other metrics were fairly in line with what we’d expect to see during the fall. Though still we can easily say this fall was more dull than the past few years for sure.

Hiding behind hot annual stats: I posted some market recap images below and they’re glowing. When looking at annual stats most price metrics are up about 6-7%. Does that sound surprising since we’ve been talking so much about the market slowing? Here’s the deal. Annual stats are sexy, but when we look at the numbers over the past 3-6 months instead we see a much different trend. This just goes to show if we’re not careful we can end up hiding behind hot annual stats and missing a duller trend in front of us.

Less offers: Here’s an interesting way to see the market has changed. I know this is a bit obscure, but then again it’s a cool way to look at the market.

Momentum change: The rate of price changes has slowed lately. What I mean is in years past we’d regularly see 7-10% price increases when running stats, but over the past few months we’re starting to see only 3-6% increases instead. I talked about this recently, and fresh stats show this same trend.

Leftovers: Right now in early January we have a market of leftovers. The reality is lots of properties that didn’t sell during the fall are still on the market. Most of these homes are simply overpriced. If sellers only would’ve looked at similar sales and considered similar listings that are getting into contract it would’ve made all the difference. There are a decent number of pendings in most neighborhoods right now, but the pendings are priced right (and often in good condition).

Listen to the Listings: In case it’s useful I wrote an article in Comstock’s Magazine this month to talk about the importance of giving strong weight to listings. It’s not just about the sales.

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

BIG QUESTIONS:

1) 2018 RECAP: What did the market do last year? Here’s some recap images.

2) LAST YEAR VS THIS YEAR:

NOTE: Placer County had very few sales this December, so I wouldn’t put much weight at all on the price figures for this month. The median price actually increased quite a bit from November to December. My advice? Don’t read anything into this.

3) SALES VOLUME: It’s important to look at sales volume in a few ways to get the bigger picture. Here it is by month, quarter, and year. As an FYI, volume was down 11% during the second half of the year in the region.

SACRAMENTO COUNTY:

Key Stats:

  • December volume down 24.9%
  • 2018 volume down 3.4% (entire year)

SACRAMENTO REGION VOLUME:

Key Stats:

  • December volume down 24.8%
  • 2018 volume down 4.8% (entire year)

PLACER COUNTY VOLUME:

Key Stats:

  • December volume down 19%
  • 2018 volume down 6.9% (entire year)

4) SLOWING MOMENTUM: The stats show the market is slowing down when we look at the rate of change by year. Looking at monthly, quarterly, and annual numbers helps give a balanced view of things.

SACRAMENTO COUNTY (more graphs here):

SACRAMENTO REGION (more graphs here):

PLACER COUNTY (more graphs here):

I hope that was helpful.

DOWNLOAD 70+ graphs: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: Do you think buyers are going to put their foot on the gas pedal or brake pedal in early 2019? What do you see happening in the market right now?

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

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Filed Under: Market Trends Tagged With: 2019 real estate trends, El Dorado County, higher inventory, Housing Bubble, housing market change, market recap, market slowing momentum in market, Placer County, real estate graphs, Sacramento County, Sacramento real estate trends, Yolo County

An underrated metric & slumping volume

December 12, 2018 By Ryan Lundquist 26 Comments

There’s a stat that doesn’t get much love. It’s not sexy, nobody really writes about it in the newspapers, and most people don’t even know what it is. But it’s really important because it helps us tell how hot or cool the market is. I’m talking about the sales to list price ratio. Oops, did I lose you? I know, a topic like this sounds painful, but let’s consider why this actually matters. Then if you’re interested I have a huge local market update below to discuss slumping volume and slowing momentum. Any thoughts?

What is it? The sales price to original list price ratio is one of the best ways to gauge the temperature of the market. It’s the relationship between the final sales price and the original list price, and it’s expressed as a percentage.

If we only had one stat: We could likely get a pretty good understanding of how hot or cold a market is based on this metric alone. So without looking at price, inventory, or sales volume, if we simply saw a market had a 100% sales to original list price ratio, it tells us properties on average are selling for what they listed for. That’s a sign the market is hot or at least buyers are willing to pay what sellers are putting out there.

When we see this ratio moving up or down, it helps us get an idea of what the market is doing. For instance, over the past six months the sales price to original list price ratio has declined in Sacramento County, which tells us the gap has been growing between what sellers are asking and what they are actually getting. The most recent ratio is 96%, and that means on average properties are selling 4% lower than their original list price. That’s a powerful stat, right?

Not being anal, but ORIGINAL matters: It can make a huge difference if we’re looking at the original list price or the most recent list price.

Looking at the most recent list price makes it seem like the market isn’t cooling all that much. After all, a 99% sales to list price ratio still sounds pretty good. Yet this stat hides the real trend that properties on average are actually selling 4% lower than their original price. Thus if we’re not careful we can totally misunderstand the market despite good intentions. That’s sobering, right?

The “Bubble” years:

Right now 96% feels dull, but imagine 87%. Yikes!

Action Step: With so much talk about the market softening these days, it’s a good idea to pay attention to lots of different metrics – and especially the sales to original list price ratio. Keep in mind if the ratio isn’t available through MLS, it can always be run manually by dividing the final sales price into the original list price. For instance, all sales in Sacramento County this month totaled $512M while the original list price for all these sales totaled $533M. When I divide $512M into $533M I get 0.96 (or 96%).

I hope this was interesting or helpful.

—–——– Big local monthly market update (long on purpose) —–——–

Dull is a perfect word to describe this fall season. Actually really dull would be more accurate. Let’s consider some of the bigger themes happening right now in the market. 

DOWNLOAD GRAPHS FOR YOUR SOCIAL MEDIA: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy my post verbatim).

A week longer: It’s been taking about a week longer to sell this year compared to last year in the region (technically 8 days).

Prices softening: Prices normally soften during the fall season. If you don’t believe me, look at the graphs below. This year the median price is down by 6% from the height of summer in the region. This doesn’t mean every neighborhood or price range is down by that much, but there is a more defined softening present this year in many price ranges. Sellers would be wise to price according to listings that are getting into contract rather than the highest sales from spring. 

Sales volume slumping (please read): Sales volume is only down by 3% in the region this year, but the bigger stat is volume is down 11% over the past four months. This is definitely something we need to watch closely to see how it unfolds. In short, if volume rebounds to normal levels as 2019 begins, then we’ll chalk this slump up to a dull fall season like we had in 2014. If volume persists to decline though we’ll correctly call this a new direction for the market. So is this seasonal or not? I’ll tell you in a few months or so….

Momentum change: The rate of price changes has slowed lately. What I mean is in years past we’d regularly see 7-10% price increases when running stats, but over the past few months we’re starting to see only 2-6% increases instead. I talked about this last month, and the new stats show this same trend.

Ironic power exchange: There has been a power exchange lately where buyers have been gaining market share and sellers have been losing it. Of course we know sellers have struggled with being out of touch with the market as they’ve been prone to overprice. It’s been easy to point this out all year long, but ironically we’re starting to see something similar with some buyers thinking they’re completely running the show when in fact it’s not quite a full-fledged Buyers’ market.

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

BIG QUESTIONS:

1) How did the market change from last year?

2) How did the market change from October to November?

3) What’s happening with sales volume?

SACRAMENTO COUNTY VOLUME:

Key Stats:

  • November volume down 6.5%
  • 2018 volume down 1.4% (January to November)
  • Annual volume is down 2.1% (past 12 months)

SACRAMENTO REGION VOLUME:

Key Stats:

  • November volume down 12.1%
  • 2018 volume down 3.3% (January to November)
  • Annual volume is down 3.4% (past 12 months)

PLACER COUNTY VOLUME:

Key Stats:

  • November volume down 9.3%
  • 2018 volume down 5.6% (January to November)
  • Annual volume is down 6.1% (past 12 months)

4) MOMENTUM IS SLOWING:

November:

Past 90 Days:

Entire Year:

DOWNLOAD 100+ graphs: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

SACRAMENTO COUNTY (more graphs here):

SACRAMENTO REGION (more graphs here):

PLACER COUNTY (more graphs here):

I hope that was helpful.

DOWNLOAD 100+ graphs: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: Do you ever use the sales price to list price ratio? Why or why not? What do you see happening in the market right now?

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

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Filed Under: Market Trends Tagged With: El Dorado County, market is changing, Placer County, real estate bubble, real estate trends, regional housing market, Sacamento housing market, Sacramento County, Sacramento Home Appraiser, Sacramento House Appraiser, slowing market, slumping sales volume, trend graphs, Yolo County

Seven years of price increases & my blue kitchen island

December 3, 2018 By Ryan Lundquist 16 Comments

Let me get straight to it. I’m excited to share some new visuals. I’m geeking out because these new images help tell a compelling story of seven years of price increases. Whether you’re local or not, I hope you can dig these.

A FEW QUICK THINGS THIS WEEK:

1) Loan Limits: You probably heard conforming loan limits were raised for the third year in a row. This basically helps buyers continue to afford higher prices. I’m not saying that’s bad, but it would be nice if wage growth more than anything was helping people afford the market.

2) Sign the Petition for Appraisers: Last week I wrote about a move to start getting rid of appraisers. This is a big deal with huge implications for the housing market and future escrows. I co-wrote a petition through change.org and I want to ask you to please sign it. SIGN HERE.

3) Cool Graphing Link: On a lighter note, Freddie Mac launched a new graphing tool where you can make quick visuals and even compare different markets throughout the United States. Not every city is listed, but it’s worth checking out and getting lost for a few minutes.

4) My Blue Kitchen: I talked about blue being the rage in kitchens, and I guess my post inspired me. During Thanksgiving break I built a new kitchen island and we painted it blue. Woodworking is definitely a passion and it’s something I do to help keep my sanity. Anyway, this was a fun project and I wanted to share.

SEVEN YEARS ON ONE GRAPH (NEW VISUALS):

Here’s some images for four counties (Sacramento, Placer, Yolo, & El Dorado). What I like is we see price trends for seven years on one graph. It may take a moment to figure out how to digest these images, but look for changes in price and volume over time. So far people who have seen these have noted rising prices and definitely vanishing affordability. Keep in mind they don’t include most of December for 2018, and that could change the look slightly by next month. 

What do you see?

SACRAMENTO COUNTY:

SACRAMENTO REGION:

PLACER COUNTY:

EL DORADO COUNTY:

YOLO COUNTY:


SHARE THESE IMAGES: You are welcome to share any of these images in your newsletter, on social media, or on your blog, etc… See my sharing policy for details and 5 ways to share (please don’t copy my post verbatim).

I hope that was interesting or helpful.

Questions: What do think of these images? Which ones do you like best? Any suggestions for improvement? I’d love to hear your take.

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

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Filed Under: Market Trends Tagged With: below $100K, bottom of the market, El Dorado County, Home Appraiser, House Appraiser, house prices, housing market, million dollar market, Placer County, price changes, Sacramento County, sacramento housing market, Sacramento Region, top of the market, Yolo County

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