Flat. That’s sort of how the market has felt in Placer County. Well, there has been a slight uptick lately, but otherwise the market seemed to level out a few quarters ago after a massive stint of appreciation. Let’s take a look at the latest trends below, and touch on what is happening in the regional market too. I hope this is helpful.
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- Scan the highlighted text and graphs quickly.
- Grab a cup of coffee and spend a few minutes digesting what is here.
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1) Prices have been mostly flat (small uptick):
The market has felt much more flat in Placer County compared to Sacramento County. The median price and average price per sq ft did see an uptick last month on paper, but by in large values have been somewhat flat overall. The market has felt very price sensitive in that if a property is not priced right, it’s going to sit. Of course not all cities or places in Placer County are experiencing the same trends, so take county-wide stats with a grain of salt since they do not apply across the board to every market niche.
2) Inventory is about the same as it was last month:
The higher the price, the more inventory there is. Right now inventory is at 2.5 months for Placer County, which is about the same as it was last month. There are actually more listings this month (which is normal), but there are also more sales (also normal).
3) The higher the price, the longer it is taking to sell:
On average properties took 54 days to sell in May compared with 55 in April (cumulative days on market). Just as it is in Sacramento County, the same holds true in Placer that higher-priced listings take longer to sell.
4) Volume is down by 12% from last year, but up 15% from April:
Sales volume is up by 15% from last month, but for some perspective it is down 12% from May 2013. Nonetheless, it’s been good to see more sales these past two months after a more sluggish start to the year.
5) Listings increased by 15% from last month to this month (normal):
This is what the market looks like in terms of listings in Placer County. There is very little for sale under $200,000, but quite a bit between $300K to $750K.
6) “Layers” to watch over the next two quarters:
What is driving the market in Placer County? Low interest rates and low inventory are two of the bigger “layers of the market” right now. Values really leveled off last summer after cash investors began to pull back from the Sacramento Region and inventory increased. Cash investors were far more dominant in Sacramento County during the heat of the market last year, but you have to remember cash had a ripple effect throughout the market, and what happened in Sacramento County impacted surrounding counties too. Interestingly enough, Blackstone is still buying properties in Placer County. Their purchases have been fairly minimal in 2014 in Placer County, but virtually non-existent in Sacramento County these past six months. The job market is also a factor in Placer County as we need to see higher paying jobs to support higher values. The unemployment rate as of April 2014 in Placer County is 6.1% (compared with 7.1% in Sacramento County).
7) Sacramento County vs Placer County:
For reference, there is about a $100,000 median price difference between Placer County and Sacramento County.
THE SACRAMENTO REGION:
8) Inventory increased slightly last month in the Sacramento Region:
Keeping an eye on regional trends is important for context. When considering Sacramento, Placer, Yolo, & El Dorado County, inventory saw a slight uptick from last month and is now hovering at 2.23 months for May 2014 (still very low). The higher the price, the higher the inventory.
9) On average it’s taking 52 days to sell a house in the Sacramento Region:
There was no change in CDOM from last month to this month. On average properties are taking 52 days to sell (which is about 40% longer than last year).
10) What prices look like in the Sacramento area:
This is evidence of a market that has really changed these past few years. There are increasingly less listings available under $100,000 since the market is no longer saturated with REOs, and values have simply risen exponentially.
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Questions: How else would you describe the market? I’d love to hear your take.
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Heather Ostrom says
If you’re a move-up buyer with a home to sell first, it’s a great time to get out there. We’re seeing less competition and sellers considering contingent offers. We have done more contingent (successful) sales in the last 45 days than we have in years. It’s been so awesome and a lot of happy folks.
Ryan Lundquist says
Well said, Heather. It is so much easier to get into contract right now compared with last year. There is still competition, but it’s been nice to not have an incredibly aggressive market where everyone has to overbid to even have hope of getting an offer accepted. I’m so glad to hear that about your contingent buyers. Congrats on your success. You and Steve are doing a great job.
Heather Ostrom says
This time last year, was NUTS and tapered off up here towards the end of July. You’re doing a great job yourself Ryan. Love your posts. Thanks for the graphs and putting visuals to the stats. Love it.
Ryan Lundquist says
Yep. It really was NUTS. It’s always interesting to see markets change over time. It’s amazing how less cash and an uptick in interest rates can soften a market. Thanks Heather.