Crazy price growth. That’s what the market has seen lately. But let’s take a step back to look at how much growth has occurred since the market bottomed out in 2012. With so much talk about rapid price appreciation lately, I figured this would be interesting. Enjoy if you wish.
1) Huge growth: In many areas of Sacramento we’ve seen $300,000+/- price growth since January 2012, which was the bottom of the market in our area. Remember, just because the median price rose by $300,000 or so since 2012 doesn’t automatically mean your home is worth that much more.
2) Not adjusted for inflation: These stats are not adjusted for inflation. If you want to adjust them, by all means please do so.
3) Limitations: I didn’t include every area locally because I don’t have time, but most importantly if there aren’t enough sales, it’s just not going to be meaningful to compare only one month of data. This is where I would suggest maybe comparing an entire quarter or year if you’re working in an area with few sales. If you want bonus points too, maybe look at the average price and average price per sq ft to see if you observe anything different.
4) Huge percentages at lower prices: The lower the price in 2012, the higher the percentage change. Do you see that in the charts? For instance Oak Park had over 600% growth, which is just completely unreal. Someone even asked me on Instagram if this stat was accurate. It is. But here’s the thing. Part of the percentage being so high is simply a result of the first number in 2012 being so low (typically foreclosures and fixers selling then). When we look at the dollar change in Oak Park, the number is fairly consistent with the rest of the market in how much prices have risen. I’m not saying this to diminish the pain of gentrification or lower-priced areas increasing exponentially. I only want to say it’s helpful to be aware of both percentage and dollar growth so we are well-balanced in what we understand and say about the market.
I hope that was interesting or helpful.
Are Bay Area buyers dominating? One more thing. Here are some thoughts about Bay Area buyers in the Sacramento market.
Questions: What stands out to you most about the stats above? Any other points to add? I’d love to hear your take.