Big demand and the force of FHA in Sacramento’s housing market

Big demand. Big FHA. Let’s talk the latest housing trends in Sacramento. If you’re local, my goal is to give you 10 quick talking points to share with clients. If you’re not local, what are you seeing in your area?

Two ways to read my big monthly market post:

1. Scan the talking points and graphs quickly.
2. Grab a cup of coffee and spend a few minutes digesting what is here.

One Paragraph to Describe the Sacramento Market: This year the market feels much stronger than it did last year at the same time. Values have not skyrocketed like they did a few years ago, but there has been somewhat of a desperation among buyers to get into contract before interest rates and/or values rise much more. This has made for an environment where multiple offers have been commonplace (at least for properties that are priced correctly and in average condition). Housing inventory did increase slightly last month, and we are starting to see slightly more price reductions, but demand is still “off the charts” in that pendings are a good 20% higher than one year ago. Regional prices have seen an uptick these past few months, and sales volume is 7% higher so far this year compared to last year. We all know low interest rates and sparse inventory have been driving the market, but having such a huge percentage of escrows going FHA has also boosted sales figures. Remember that many FHA buyers are not putting much “skin in the game” so to speak, and at times they tend to offer more than anyone else to get a contract accepted. Being that 25% of all sales in the Sacramento region were FHA last month (and 29% in Sacramento County), this definitely creates more competition at certain price ranges and makes housing stats look more impressive. As housing inventory presumably begins to increase over the next few months (as it did last year), watch out for price reductions, unrealistic expectations from sellers, and buyers gaining more power.

DOWNLOAD 51 graphs HERE (zip file): Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share.

Sacramento Regional Trends for May 2015 (Sac, Placer, Yolo, El Dorado):

1. The median price in the Sacramento Region is $333,250.
2. The median price is 7.5% higher than one year ago (May 2014).
3. Sales volume is up 7.3% so far in 2015 compared to the beginning of 2014 (January through May).
4. It took an average of 38 days to sell a house last month (44 days in April).
5. Cash sales were 15.6% of all sales last month.
6. FHA sales were 25.4% of all sales in the region last month.
7. Sales volume was 7% higher this May compared to last May.
8. There is 1.9 months of housing inventory (2.2 months in May 2014).
9. The average sales price is $368,525 (7.5% higher than last year).
10. It took 14 less days to sell a house this May compared to May 2014.

Sacramento County Market Trends for May 2015:

1. The median price in Sacramento County is $289,950.
2. The median price is 7% higher than one year ago (May 2014).
3. It took an average of 35 days to sell a house last month (42 in April).
4. Cash sales were only 15% of all sales last month.
5. FHA sales were 29% of all sales in Sacramento County last month.
6. Sales volume is 5.7% higher this May compared to last May.
7. There is 1.7 months of housing inventory (2.0 months last May).
8. The average price per sq ft is 183 (13% higher than last May).
9. The average sales price is $317,000 (7.5% higher than last year).
10. It took 12 days shorter to sell a house this May compared to May 2014.

Placer County Market Trends for May 2015:

1. The median price in Placer County is $400,000.
2. The median price is 5.3% higher than one year ago (May 2014).
3. It took 38 days on average to sell a house last month.
4. Cash sales were 15.8% of all sales last month.
5. FHA sales were 21.5% of all sales in Placer County last month.
6. Sales volume was 9.8% higher this May compared to last May.
7. There is 2.1 months of housing inventory (2.5 months last May).
8. The average price per sq ft is 201.
9. The average sales price is $445,218 (5.7% higher than May 2014).
10. It took 16 days shorter to sell a house this May compared to last.

I hope this was helpful. Thank you so much for being here.

DOWNLOAD 51 graphs HERE (zip file): Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share.

My New Office & the Desk I Built: By the way, I wanted to share some exciting news. I’m in the process of building a new home office since I recently moved to Carmichael. By this time next week my office should theoretically be finished, but for now here is a desk I built out of reclaimed wood last week. It’s a beastly 12′ long, and it’s designed for two work stations.

Questions: How do you think sellers and buyers are feeling about the market right now? What are you seeing out there?

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