One of the best trips I ever took was a European backpacking vacation after graduating college. A friend and I traveled through England, France and Scotland for two weeks, and it was simply incredible. In fact, I hope to get back there again in a couple of years as my wife and I have begun talking about doing something big for our 15th anniversary.
Unfortunately my wallet is not thick enough to take every blog reader to Europe today, but I can give you a “Tour de Sacramento” so to speak. Let’s make four quick stops to uncover some of the real estate trends during the first quarter of 2013.
Stop 1: Distressed Sales
Over the past year the market has seen a significant downturn in foreclosure sales. Bank-owned sales essentially have decreased by 20% since the first quarter of 2012, whereas short sales had been seeing an increase until this past quarter.
The market has persisted to gain health as the total percentage of distressed sales has seen a decrease yet again over the past quarter. However, it’s also noteworthy that inventory has been at its lowest point in years.
Stop 2: The Cash Factor
Cash purchases have generally been up in 2013 so far. There are rumors of certain investment funds slowing down their purchasing, but the market is clearly still saturated with investors.
The stats below consider all single family detached sales in Sacramento, Placer & Yolo County. It’s amazing to see that 36.28% of all single family detached sales in Sacramento County were cash. However, when considering all single family sales including condos and halfplexes, 39.06% of all sales were cash in Q1 of 2013.
Stop 3: The Breakdown of Buyers
One out of every two sales under $200,000 in Sacramento County has been a cash purchase lately. No, that’s not a typo. It’s no wonder why financed offers have had to be more creative in hopes of getting an offer accepted. It’s become increasingly more common to see buyers make offers above list price, ask for no credits from the seller, offer to pay a certain amount above the appraised value or even remove appraisal contingencies altogether. Yikes! FHA offers saw a slight decrease, and I wouldn’t be surprised to see that persist so long as the climate of low inventory and high-volume cash persists.
Stop 4: Unemployment in Sacramento County
Unemployment dropped to 9.5% in Sacramento County as of February 2013. As you can see in graphs below, the jobless rate has overall been trending downward in Sacramento, California and the United States. For reference, the unemployment rate in California right now is 9.6% and the national unemployment rate is 7.7%.
Questions: What stands out to you above? Also, what was the best vacation you ever took?
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Hey Ryan —
Don’t worry about Europe. You don’t want to be there now–that’s what I hear from friends and family. You can certainly afford to go to one of the most amazing landscapes on earth with the greatest concentration of natural wonders — right here. Allow me to suggest John McPhee’s Assembling California — a beautifully revealing book about the ground beneath us. Cool places not frequented by tourists? Mt. Lassen, the White Mountains (with the Bristle Cone Pine — oldest living organism on earth) Mono Lake and the eastern Sierra, the Lost Coast.
And bear in mind that when Europeans think about a vacation, here is where they want to go.
Thanks Ricardo. I appreciate the tips. One of the main issues is that my wife has never been to Europe. I’ve been twice, but her visions of visiting the Eiffel Tower among other places have to come to reality at some point. 🙂