Appraiser

The housing market nobody predicted

January 12, 2021 By Ryan Lundquist 10 Comments

Nobody predicted 2020. Who would’ve thought during a pandemic we’d see such an explosive year in real estate? The expectation was that the market would start to tank, but we saw the exact opposite. It’s not just Sacramento either because many areas of the country experienced this same dynamic. Anyway, enjoy some brand new visuals if you wish. Thanks for being here.

THE SHORT VERSION:

Here is a highlight reel to talk through some of the bigger themes this year. In short, the stats are stunning.

What stands out to you?

THE LONGER VERSION (organized by county):

1) Sacramento Region
2) Sacramento County
3) Placer County
4) El Dorado County
5) Yolo County
6) Bonus visuals

I welcome you to share some of these images on your social or in a newsletter. Please use this stuff. In case it helps, here are 5 ways to share my content (not copy verbatim). Thanks.

1) SACRAMENTO REGION:

2) SACRAMENTO COUNTY:

3) PLACER COUNTY:

4) EL DORADO COUNTY:

5) YOLO COUNTY:

6) BONUS VISUALS:

Here are some extra regional graphs to show how various counties are moving together.

Other visuals: Not that you needed more, but check out my social media in coming days and weeks for extra visuals. I am posting daily stuff on Facebook, Twitter, and LinkedIn. Oh, and sometimes Instagram.

Thanks for being here.

Questions: What stands out to you most about 2020 real estate? Any stories to share? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Real estate drama (and a market update)

December 15, 2020 By Ryan Lundquist 50 Comments

I’m not into The Bachelorette or The Real Housewives. It’s just not my thing. But I love me some real estate drama. I’m not talking about HGTV, but the housing market. I know that elevates my nerd status, but I’m hyper focused on fresh stats, ups and downs, and things that make the market move.

(scroll down for a big market update instead)

AN EXCEL FILE FOR CHRISTMAS? Today I want to share some new neighborhood visuals and I’d like to give you an Excel template so you can quickly make these images for neighborhoods in your area. Does that interest you? If I have consensus I’ll post a template with instructions next week.

DRAMA IN THE NEIGHBORHOOD: What can you tell me about this neighborhood (East Sac)? What stands out to you about the relationship between price and square footage, lot size, and bedroom count? I made these images in a couple of minutes with the template I mentioned.

What do you think? Do you like any of these images? Any ideas for something else to show in a quick template like this? Let me know.

UNCLE RYAN’S LAME GIFT: I know it’s odd to wrap an Excel file for Christmas, but let me know if this would be relevant. You can use it for studying neighborhoods, explaining the market to clients, or for newsletters / social media. If there’s enough interest I’ll make a video tutorial. You don’t need to be an Excel guru either. This is something anyone can do with a little effort.

FOX 40 INTERVIEW: By the way, I did a 15-minute live segment last week on Fox 40. We talked about Sacramento being poised to have the strongest market in the country next year according to Realtor.com. Watch here if you wish.

Thanks so much for being here.

Any thoughts?

———————- (skim or digest slowly) ———————–

BIG MARKET UPDATE

For those interested, here’s a big Sacramento market update:

MARKET SUMMARY: In short, we’ve been seeing the drama of a spring real estate season during the fall months. The housing market has been on steroids and the slower fall season we normally have just didn’t happen. Well, technically we are seeing some stats start to slow down as prices have gone sideways lately and we’re seeing fewer sales like we normally do in November and December. But here’s the thing. The “slower” stats are still so elevated from where they should be that it just doesn’t feel slow at all.

HIGHLIGHT REEL:

Half of all sales sold in seven days or fewer last month
For six months in a row sales volume has outpaced last year
We only have three weeks of supply (that’s crazy low)
We have the lowest monthly inventory in 15-20 years (at least)
Buyers made twice as many offers last month compared to last year
The number of listings has been chopped in half
Price metrics are up about 12-14% from last year
November 2020 regional volume is up 25% from November 2019
63% of all sales had multiple offers last month
There were 53.6% more multiple offers compared to last year
Each sale last month had an average of 3.22 offers
Sales volume is up about 2% over the past 12 months
There were 106% more million dollar sales from July to November

WAY TOO MANY VISUALS:

You are welcome to use these in newsletters and social media with proper attribution. Scroll quickly or digest slowly.

SACRAMENTO REGION:

SACRAMENTO COUNTY:

PLACER COUNTY:

EL DORADO COUNTY:

Other visuals: I have lots of other graphs. Check out my social media in coming days and weeks. I am posting daily stuff on Facebook, Twitter, and LinkedIn. Oh, and sometimes Instagram.

Thanks for being here.

Questions: What are you seeing in the market right now? Any stories to share? Are you interested in my Excel template? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Goodbye California. Is everyone leaving?

December 8, 2020 By Ryan Lundquist 50 Comments

Everyone is leaving California. Well, it feels like it. But what do the stats actually say? Let’s talk about it. This is so important for real estate professionals in particular to understand because it helps us talk about the market and plan for the future. Any stories to share? Please comment below.

1) Where are California residents moving?

Last year 653,551 residents left the state according to the American Community Survey. Here are the top destinations of where California residents are moving. Keep in mind 2020 data is not out yet. I included the top states below. If I had all fifty states on one graph it would be too big. Does anything surprise you?

2) Who is coming to California?

There is so much news about people leaving California, but we have quite a few people coming to the state too. Last year in 2019 there were 480,204 people who moved to California. It’s interesting that many residents moving here are from some of the top destination states.

3) Where are Californians MOVING THE LEAST?

This visual shows the locations where California residents moved the least in 2019. Does anything surprise you?

4) How can the population still be growing with so many leaving?

Last year we saw more people leave than come to California and that’s been the trend for at least ten years according to the American Community Survey (without considering international migration). So how is our population still growing? Well, in short we’ve had more births to offset the numbers. This is really important because we often hear things like, “Dude, our population keeps growing, so clearly we don’t have more people leaving. That’s just a made-up narrative.” Look, it’s both. We actually do have more residents leaving than coming, but births are helping our population continue to grow. On a side note, I wonder if we’ll see the birth rate go up in light of the pandemic. You know, will sheltering in place lead to more babies?

5) Aren’t more residents moving to Idaho?

It seems like Idaho is all the rage as a destination, so it might be surprising to see only 17,722 California residents moved to Idaho last year. But keep in mind these are 2019 stats and we could see the numbers increase in 2020. Let’s remember Idaho only has a total population of about 1.75 million people though, so having nearly eighteen thousand California residents move last year is huge because it essentially boosted the population by 1%. That’s enormous growth for Idaho, but it’s really just a drop in the bucket for California since we have over thirty nine million residents.

Thanks Meghan for letting me use the photo.

6) Less than 2% of the population moved last year

It seems like everyone and their Mom is leaving the state, but it’s really not true when considering the numbers from the U.S. Census Bureau. I’m not trying to minimize over 650,000 residents leaving last year, but that’s less than 2% of the state. It’s worth noting that over 98% of residents did not move last year.

7) Will the pandemic cause more people to move?

The stats above DO NOT reflect the pandemic because 2020 stats aren’t out yet. I’m anxious to see what new stats bring in light of so many residents being able to work from home now. By the way, here are three ways the pandemic has affected buyers.

8) Migration resources:

You can make your own visuals like mine by checking out the U.S. Census Bureau. But there is also a fun tool called the Census Flow Mapper that helps us see county to county migration (the only downfall is data only goes through 2018 so far). We can also look at migration reports from moving companies. Here’s a sampling of migration reports from Atlas Van Lines, United Van Lines, and North American Moving Services. We can also consider search queries to get clues for places people are thinking about, but I tend to put more weight on stats that show where people actually moved.

9) Why are people moving?

This is a huge question. It’s a dissertation and I won’t pretend to be qualified to answer it. But the usual suspects such as retirement, lifestyle, job change, politics, etc… are surely factors. I’d love to hear your take in the comments.

QUESTIONS FOR REAL ESTATE PROFESSIONALS
Who are your clients going to be over the next few years?
Who is coming to the market?
Who is leaving the market?
Who is going to be participating in the future market?
What steps do you need to take to position yourself for the future?
Where can you meet future clients?

I hope this was helpful.

Questions: Does anything surprise you about the stats above? Why are people leaving? Did I miss anything?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

What would happen to the housing market if we went on lockdown again?

November 17, 2020 By Ryan Lundquist 19 Comments

Lots of us are wondering about the future as COVID-19 cases are rising. When will this be over? What’s it going to take to beat it? And in terms of real estate, what would happen to the market if we went on lockdown again?

This isn’t about fear or politics, but conversation. This isn’t a prediction post either. My only purpose is to consider things that might affect housing. So let’s talk.

LOCKDOWN THOUGHTS:

1) Suppressed demand: There are many things that can affect a housing market. Mortgage rates, jobs, the economy, access to financing, etc…. and even the government. A mandated lockdown, whether national or statewide, is something that can suppress demand because the market isn’t able to operate as it normally would. When I say “lockdown” I’m talking about something akin to earlier in the year where occupied properties were not allowed to be shown.

2) Buyers & agents have learned: This time around we have more experience. The real estate community has learned to show homes virtually and buyers are more used to the idea also. However, if buyers and agents don’t have full access to real estate because of imposed rules then it’s hard to imagine seeing no effect on the housing market.

3) Sellers: One thing to watch is sellers pulling their listings from the market or waiting to sell if strict rules were imposed or if COVID numbers got out of control. Throughout the pandemic we’ve seen substantially fewer listings and it wouldn’t be surprising to see fewer during a lockdown or grave situation. Yet not all sellers are the same and there will be people who list no matter what.

4) Buyers: I imagine mortgage rates below 3% will keep propelling lots of buyers to hunt for homes because that’s exactly what’s been happening these past months. In short, mortgage rates have pulled far more buyers into the market than the coronavirus has pulled people out. In other words, so far the pandemic hasn’t hampered buyer demand. But what happens if access to real estate is limited or a feeling of uncertainty about the economy, housing, or future ensues? All I’m saying is we need to continue to watch buyer sentiment because it’s not something that always stays the same.

5) It is a real market: When the pandemic first began I heard things like, “This isn’t a real market,” but that wasn’t true. Prices slowed. There were far fewer pending contracts. And the market felt dull. In other words, we had real trends and stats even though there was an element of the market feeling suppressed due to governmental regulations. That didn’t make it a fake market though.

6) No effect whatsoever: Our market has done very well within the confines of current restrictions, so if those persist we may not see too much difference as long as demand remains high. But if the rules change and access to the market changes, that’s where we might expect to see a difference in the way the market feels (or a change in the stats). As a guy who follows the market closely what I am looking for is a change in buyer or seller sentiment or a change in something that would affect access to real estate.

7) Could we see a “W”? When the pandemic began we saw a huge drop in volume and then a massive recovery. This created a “V” shape because there was a drop and then an increase. Well, if we have a second round of outbreak and a lockdown, could we see another “V” which would then form a “W”? I wrote about this a few months back in a conversation with an economist. Or would the crazy momentum we have right now simply press through a lockdown? This is the question and we’re going to have to wait to see how it pans out. If anything we ought to be wary of predictions. I don’t think anyone at the beginning of the year predicted the market we’re in right now… This doesn’t mean we need to be shy about asking questions about the future though.

8) Commercial real estate: This has been a brutal year for many business owners and a second round of lockdown could be a deathblow. What happens to business owners and commercial property owners over the next few years?

9) Other: What else do we need to consider? What is on your mind? I’d really like to hear your take in the comments or via email.

Free webinar: I’m doing a big market update this week for SAFE Credit Union on November 19th from 9-10am PST. It’s free to anyone and it’ll hopefully be some good background noise while working. Register here.

Thanks so much for reading my post today.

Any thoughts?

———————- (skim or digest slowly) ———————–

For those interested, here’s a big Sacramento market update:

MARKET SUMMARY: In short, the market has been slowing for the season, but it’s still best described as a “hot” market. I keep saying that this fall has not been normal because the market hasn’t softened like it normally does. It’s really felt more like spring than anything… With that said we have begun to see sales volume drop for the fall, but properties are still selling very quickly. In fact, half of all home sold in six days or fewer in the region last month. We literally have about 50% fewer listings right now, inventory is at historic lows, and we had 39% more multiple offers last month compared to a year ago. The big news is sales volume has finally caught up to last year after being down due to a slump at the beginning of the pandemic. What I mean is as a result of the past four months of heightened demand we’re finally back to 2019 levels. Well, Sacramento County is still down, but El Dorado and Placer County being up has effectively pushed us back to normal.

WAY TOO MANY VISUALS:

You are welcome to use these in newsletters and social media with proper attribution. Scroll quickly or digest slowly.

SACRAMENTO REGION:

SACRAMENTO COUNTY:

PLACER COUNTY:

EL DORADO COUNTY:

Other visuals: I have lots of other graphs. Check out my social media in coming days and weeks. I am posting daily stuff.

Thanks for being here.

Political comments: I will not approve any comments that are exclusively political because this is a blog about housing. We can touch on politics as it affects real estate, but overt political rants are best for other blogs.

Questions: Do you think we’ll go on lockdown? What are you seeing out there right now?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Appraiser

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