The market ripened early this year. Buyers have simply been ready before sellers. On one hand listings and sales have been at fairly normal levels for the first two months of the year, so we can say the market is normal in that regard. But buyer demand really took off last month as pendings in the regional market were up by almost 30% compared to last February. This is the part that is not normal, and why we can say the Spring market ripened early.
One Paragraph to Explain the Market: Well-priced listings are going quickly and experiencing multiple offers, but otherwise properties are sitting on the market if they are not priced correctly. Buyers have been anxious to get into contract, but at the same time they seem to be showing discretion by not readily pulling the trigger on homes with adverse locations or issues. This has led to a sense of many current listings feeling like leftovers since they’ve been well vetted like thrift store clothing. The good news is we are reaching the time of year where more listings should be hitting the market to help alleviate the pressure of a lack of good inventory. Lastly, it took a few less days to sell last month, inventory decreased, and the sales to original list price ratio increased (all normal in Spring).
NOTE: I am posting once a week now, and this means my big monthly post will have less text, but a few more graphs (Placer, Sacramento County, & Regional Market).
Two ways to read this post:
- Scan the talking points and graphs quickly.
- Grab a cup of coffee and spend a few minutes digesting what is here
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SACRAMENTO COUNTY:
PLACER COUNTY:
SACRAMENTO REGION (Sac, Placer, Yolo, El Dorado):
Questions: What is driving buyers to get into contract? Is it low rates? Is it a sense of needing to get in a home before values rise too quickly? What do you think?
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Good Morning Ryan- You have a typo.
hat’s should be that’s.
You can hide or delete this post.
Thank you so much Mike. I sincerely appreciate it.
Thank you for all the analysis. Your analysis makes me look at my local market more closely. I can say that our market has “ripened early” as well. In our area, I think it is due to a combination of spring like weather and fear of raising interest rates.
Thanks Gary. That’s a high compliment. Does it feel like 2004 in your market? I sense a frenzy among buyers to get into contract. Interesting times.
It feels better than 2014 so far with inventory that is much lower. However, I’m not sure if the trend will continue for the full year. It feels more like 2006 to me (well, maybe not that good). In our market buyers are very eager to buy after three full years of very strong growth. This makes me want to run away.
I think some feel that way here too, Gary. The trend cannot continue forever. That’s for sure. It sounds like your 2006 was much stronger than ours. 🙂 Right now if buyers flood the market, it will presumably soften the market for the second half of the year. This assumes there is a finite number of buyers in the market. I’m sure some of the current buyers are entering the market because of lower rates of course, but generally speaking, more buyers now will lead to less competition later in the year. Should be fun to watch.
Our market seems to be ramping up as we move into spring. Hopefully this is a sign of good things to come. Great analysis Ryan.
Good to hear. Thanks Tom.