days on market

Stop expecting lightning speed in real estate

October 23, 2024 By Ryan Lundquist 10 Comments

Properties were selling in lightning speed a few years ago, but that’s not the vibe today. The truth is it could easily take twice as long to sell today, but the stats actually feel somewhat normal. I wonder if we’ve forgotten what the market used to feel like before 2020. Let’s talk about it.

UPCOMING SPEAKING GIGS:
10/23/24 SAFE Credit Union (details TBA)
10/29/24 Orangevale MLS Meeting
11/7/2024 Think Like an Appraiser (3 hours) TBA
11/19/24 Downtown Regional MLS Meeting Q&A 9am
12/5/24 Made 4 More Team (Exporting Data from MLS)
12/11/24 Gateway: Think Like an Appraiser (private)
1/15/25 Mike & Joel Event (details TBA)
1/24/25 PCAR Market Update (details TBA)
2/6/25 She Invests event (TBA)
2/11/25 MLS Meeting TBA
4/8/25 Culbertson and Gray (private I think)
11/4/25 SAR Main Meeting

I saw this Miata over the weekend, and it made smile. Haha. If the owner gets wind of this, please take me for a spin. Well, a loan officer on X said “higher for longer” when I shared this image, and that made me chuckle. So far that’s been the vibe in the housing market where mortgage rates have seemed to stay higher.

WHY ARE WE STUCK?

I find many people are having a hard time with the stats today because properties aren’t selling instantly like they used to. For some, this makes sense if they entered real estate in 2020, and only knew hyper speed as the norm. But to be fair, there’s also a disparity between properties that are actually selling (my stats below), and listings that are lingering. I suspect it’s tough at times to think past the ones that aren’t moving. Ultimately, my advice is to step back to gain some perspective about what “normal” looks like, and stop expecting 2021 vibes in 2024. And maybe consider a price reduction if you’re sitting without any interest.

Check out these stats though. Dorothy, we’re not in 2021 anymore…

NORMAL & SUGARCOATING

When looking at the stats, the number of days it’s taking to get into contract has been pretty normal lately. I’m not sugarcoating here. There are some really abnormal things happening today such as the low number of sales. But days on market is…. pretty normal according to the stats. The red line represents the pre-2020 average, and the green line is today. The interesting part about 2024 is the market was more competitive in the beginning of the year, and things have slowed as inventory has built.

And here’s what 2021 looked like (orange). It’s astonishing to see that properties were basically selling in less than half the normal amount of time back then.

OKAY, LET’S LOOK AT MORE YEARS

The black numbers are October, and 35 days is pretty consistent with many years prior to 2020. Could this change in the future? Of course. I’m just saying right now the stats aren’t sensational.

PRICE REDUCTIONS

I might write about price reductions soon. I think there is a need for more context as to what is happening today compared with the norm so to speak. Let me know if that might be of interest.

SELLING LOWER AS YOU LINGER

The longer you’re on the market, the lower you tend to sell from the original list price. Duh, we know that’s true. But it’s still cool to see it on a visual. Here are closed sales in the region over the past week. It’s really the first two weeks where things tend to get bid up more. What I really love to see though are properties that sold below the original price immediately since it shows those sellers listened to the market right away.

THINKING ABOUT WEEKS INSTEAD OF DAYS

Instead of thinking about days on market, let’s think in terms of weeks. I think this is a cool way to consider the stats. And this is a good reminder that the trend isn’t the same in every county.

And here’s the same data, but days on market instead.

HELLO LONGER DAYS ON MARKET

One last batch of visuals. We’ve seen an increase in days on market in every local county. It seems most areas look like they’re almost at “normal” levels, but Yuba is getting up there. Let’s keep watching this over time.

CLOSING THOUGHTS

Let’s keep watching the numbers and change our narrative as needed. Ultimately, I think it’s time to embrace a wider perspective with days on market stats and stop expecting 2021 lightning speed. Yet, I know it’s tough on sellers and agents to wait though, but the reality is market is going to involve more waiting. On that note, in light of the stats above, when do you suggest doing a price reduction?

I hope this was interesting or helpful.

Questions: Does anything surprise you above? What are you noticing with listings right now.

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

Graduation for the spring housing market

May 23, 2023 By Ryan Lundquist 9 Comments

It’s graduation season for school, and it’s also that time of year where the spring housing market crests or graduates for the year so to speak. Let’s talk about the signs of a peak, the weirdness of today’s market, and bro rating.

UPCOMING (PUBLIC) SPEAKING GIGS:
6/1/23 Thrive in Real Estate (register here)
6/07/23 SAFE Credit Union event for agents (sold out)
6/08/23 Made 4 More event (in-person & Zoom)
7/20/23 SAR Market Update (in-person & livestream)

MORTGAGE RATES ARE AN X-FACTOR

The second half of 2023 will be greatly influenced by what happens with mortgage rates. Today rates hit 7% for the national average. I don’t know about you, but so many people in January were saying rates would be 5% in May. This is a good reminder that predicting rates is very difficult to get right. But backing up, if rates persist at a higher level, it should take some demand out of the market (thanks Captain Obvious). At the same time, if rates go down, it should bring some buyers back into the market (thanks again). For now, there’s uncertainty with mortgage rates, inflation, the debt ceiling, and so many other things. It seems like there is something new every week to freak out about (but honestly, freaking out is a choice).

BRO RATING IS A REAL THING

Here’s an image I’ve been making for my presentations. It’s not meant to insult anyone, but I’m definitely jabbing the drama and comedy of rate narratives. By the way, I’m calling this “bro rating.” Is there a better description?

“DATE THE RATE” POSTS

I don’t hear “date the rate & marry the mortgage” too much right now in real estate, but it still pops up once in a while in housing conversations. I’m all for creative word pictures, especially ones that push the line. Haha. But I’m not a huge fan of dating the rate because the opportunity to refinance in the future isn’t guaranteed. Ultimately, be cautious about narratives that promise a future you can’t control or that might not age so well. My advice? Buy or don’t buy, but be confident in your decision and comfortable with the monthly payment.

LOOKING FOR A SEASONAL PEAK

Okay, let’s talk about the spring. We’ve had a glowing market in recent months, and it’s about that time of year where we should start to see housing demand peak for the season. Some people say stuff like, “Summer is the hottest time in real estate,” but that’s not statistically true in so many areas.

WEIRDNESS & QUESTIONS

Right now there’s a weird dynamic of low demand and low supply, but unless the market behaves atypically ahead, we should expect to see a seasonal peak very soon. Will it happen exactly on time, or will the spring season be extended because the market is so lopsided right now? I think we should get strong clues into the answers over the next few weeks.

WHAT TO WATCH FOR A SPRING PEAK:

PRICES:

The median price typically peaks in June locally, but sometimes it’s May. However, let’s remember properties that close in June likely got into contract in May, so the real price top happened in the pendings in May.

VOLUME:

Typically, volume peaks in June in the Sacramento region. Sometimes it happens in May, but most of the time it’s June.

DAYS ON MARKET:

It’s normal to see days on market bottom out in either June or July in Sacramento County. The red line is the pre-pandemic average in Sacramento County, and the black line is 2023 (which has really sped up lately).

MULTIPLE OFFERS:

It’s normal for the percentage of multiple offers to peak between March and May. This year looks like it could be May based on what I’m seeing in pendings. Over the past couple of weeks, I’ve noticed the percentage of multiple offers has been hovering around 58% or so in the region, so it’s possible we’ve started to level. Time will tell.

There are many other metrics we can watch, but that’s the short list.

BEING AN EXPERT & SAVE YOUR HATE MAIL

I’m not saying the market is dull right now. That’s not what the stats are showing, and it’s not what I’m hearing from agents either (so save your hate mail). If anything, it’s been more aggressive than normal for the time of year, which is stunning to see in a market that is missing so many buyers. What I am saying is it’s normal to peak around this time, so part of being a real estate expert is knowing the normal seasonal pattern so we can interpret the trend and spot anything that is not normal.

IF YOU DON’T HAVE SEASONAL STATS

If you want to see the seasonal peak for your area, check out Redfin’s weekly numbers to see when prices, sales, listings, and pendings tend to top out.

I hope this was helpful.

MARKET STATS: I’ll have lots of market stats out this week on my social channels, so watch Twitter, Instagram, LinkedIn, and Facebook.

Thanks for being here.

Questions: What are you seeing out there right now? How has open house traffic been? What are you seeing in the offers? How do you typically know when the seasonal market starts to peak?

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

Torturing housing stats & recapping 2022

January 11, 2023 By Ryan Lundquist 28 Comments

If you torture the stats long enough, they’ll confess to anything. Have you heard that before? Well, it’s true in real estate. If we’re not careful, we can make numbers say anything, whether for a glowing or doom narrative. Today, I want to talk about the danger of annual stats right now, and then I have a massive market update to share. This post is designed to skim by topic or digest slowly. I hope you get some value here, whether you’re local or not.

dark brown rustic aged barn wood planks background. A black font against a white label says, "making housing stats say what we want."

UPCOMING (PUBLIC) SPEAKING GIGS:
1/12/23 McKissock / Appraisal Buzz Webinar (register here)
1/18/23 WCR Market Update in Cameron Park (register here)
1/19/23 Big market update at SAR on Zoom (register here)
1/20/23 NARPM Luncheon
1/23/23 Residential RoundUP on Zoom (register here (free))
1/27/23 Q&A Appraiser Marketing (free Zoom webinar) (sign up here)
2/8/23 SAFE Credit Union “Snacks & Facts” (for RE) (register here)
3/10/23 PCAR Market Update Lunch & Learn (detailed TBD)
3/28/23 Downtown Regional MLS meeting
4/1/23 NAA Conference in Sacramento

IT’S EASY TO ABUSE ANNUAL NUMBERS RIGHT NOW

Last year had two parts. It was super-hot at first, and then it got really dull, and this makes for a weird combination when putting these parts together.

A) HIDING THE TREND WITH ANNUAL STATS

Check out this visual. When comparing all sales from 2021 with 2022, the median price technically went up 7%. This is statistically true because there was so much growth during the first part of the year, BUT focusing on annual stats hides the huge shift in recent months.

A table to show price change in the Sacramento region (year over year, May 2022 to current, and annual change).

CLARIFYING ANNUAL STATS: Annual means we’re comparing ALL of 2021 with ALL of 2022. So this is where we’re comparing the median price of 28,000 sales in 2021 with 22,000 in 2022. So we are literally looking at the entire year and comparing it to another year. It’s actually a cool way to see the market and gauge appreciation over time. In a normal year, I would be a fan of sharing annual appreciation rates, but this year I think it hides the real trend happening in the market. So if I were to only focus on the annual difference this year and say, “The median went up 7%,” it’s just not telling the full story of what is happening. I think looking at year-over-year stats (December 2021 vs December 2022) and month-to-month stats (May to December) really helps us see the market trend. I think it’s fine to share annual stats, but it can quickly become misleading or stink of greasy salesperson vibes.

If annual vs current stats were a meme…

B) FALSE NARRATIVES FROM ANNUAL STATS

The danger of focusing on annual stats right now is annual numbers look far sexier than the current market, so it’s easy to hide the real trend by looking to older figures. It would be like looking at the average price of bitcoin over the past two years instead of the price right now.

ANNUAL VS. THE REAL TREND:

Annual volume was down about 20%.
Volume lately has been down over 40%.

It took an average of 25 days to sell last year.
Last month it took an average of 49 days to sell.

The median price rose 7% annually last year.
The median price declined 15% since May.

A meme of an older man holding a coffee cup. The meme says at the top, "looking at annual stats," and then the bottom picture with the man looking at the camera says, "But not getting stuck on them."

C) GAINING & LOSING CREDIBILITY WITH ANNUAL STATS

Some real estate professionals are going to gain credibility this year and others will lose it. My advice? Be transparent with the stats and DO NOT create a narrative that obscures the real trend. Likewise, don’t impose a doom narrative on the market either. I wrote more about this last week. Look, we all have ideas about the future, but let’s be real about the market that actually exists.

Thanks for being here.

—–——– DEEP LOCAL MARKET UPDATE ———––

We are in a market of change, and change continued last month.

Scroll quickly or digest slowly.

SHARING POLICY: I welcome you to share some of these images on your social channels or in a newsletter. In case it helps, here are 6 ways to share my content (not copy verbatim). Thanks.

VOLUME WILL IMPROVE AS AFFORDABILITY GETS BETTER:

We are in a valley right now where we’re missing about 40% of the market. There is no sugarcoating this. The reality is lots of prospective buyers are on the sidelines due to the struggle to afford current prices. With that said, more than half of buyers are present and shopping, so the market is still moving.

This week I talked with someone who is actively hunting for homes with an agent, but he is still hesitant. He said it’s nice to maybe get tens of thousands off the list price, but he is still concerned about the lofty monthly mortgage payment. Look, sharp price declines have been helpful for affordability, but rates above 6% are still making it tough to make things work. Anyway, the market will figure this out, and more buyers will come back as affordability improves. That’s the truth.

DECEMBER VOLUME WAS NOT PRETTY:

December had the lowest volume in Sacramento County over the past 20 years, and the region is basically tied with 2007. There are two stats here. There are over 800 missing sales from the pre-pandemic normal, but there were nearly 1,300 sales that happened. I recommend for real estate friends to know all the numbers, but in terms of business, focus on the part of the market that is happening rather than the part that isn’t.

NOTE: Placer County has experienced massive growth this past decade, so a comparison to the previous decade looks different than Sacramento County. Still, it was a really dull month of closed sales.

PRICE STATS ARE DOWN ABOUT 4-5% FROM ONE YEAR AGO:

Here’s a look at stats compared to last year. Remember, closed sales in December really tell us what the market used to be like in November when the bulk of these properties got into contract. In a normal year we tend to see price metrics dip from December to January, so let’s see what happens ahead.

PRICE STATS ARE DOWN CLOSER TO 15% FROM MAY:

We’ve seen significant change since May, but the market still doesn’t feel affordable to lots of people. I’m not trying to be negative. This is just how it is, and we’ll see more buyers come back to the market as affordability improves. Keep in mind median price change doesn’t necessarily mean value is actually down by that amount. This is why I advise looking to neighborhood comps rather than imposing a county or ZIP code price metric on a neighborhood.

PRICES WENT DOWN FROM NOVEMBER TO DECEMBER:

Looking at sequential months is key so we don’t just get stuck or hyper-focused on last year (the past). Like I said above, it’s easy to hide behind older stats if we’re not careful.

OTHER PRICE VISUALS:

These visuals help show that prices are a bit lower than last year, but check out the sharp change in order to get here.

TAKING ABOUT A WEEK LONGER TO SELL:

It took about a week longer to sell last month in Sacramento County compared to the pre-pandemic normal (red line). I’ll push out other county visuals soon too (especially during my presentations coming up). However, this is over twice the time it took last year, so it feels dramatic to see 45 days lately. Historically this isn’t all that high, but it’s been a real adjustment to get used to a market where not everything is selling in the first weekend. However, keep in mind these figures only represent properties that closed escrow, and there are lots of listings that didn’t close (key point).

NEW LISTINGS ARE COMING:

We’re seeing more listings hit the market, but it’s very normal for new listings to not hit their stride until March or so. Buyers are waking up for the year though and they’re hungry for quality listings after a stale fall season of overpriced leftovers. And yes, serious buyers are shopping – even in the rain. I’ll push out some inventory images soon, but on paper things are pretty normal in terms of the months of housing supply. We technically really don’t have many listings on the market, but like I keep saying, it doesn’t matter about technicalities right now. The market has been declining despite low supply since affordability is the bigger issue. Now let’s see what 2023 brings. As I said last week, we can expect more attention on the market during the spring.

ANNUAL RECAP:

Okay, here are some annual recap images organized by county. These visuals include every single sale for the entire year, so it’s a weird combination of a blazing hot market and a dull market. I deliberately didn’t include price stats on most recap visuals because I honestly think it would lead to confusion (and some might even think it was misleading).

2021 comparison: 2021 did have slightly higher volume, so the ideal is to compare the pre-pandemic average to 2022, and I’ll roll out some stats soon to show you what I mean. But it’s still a legit comparison to compare the past two years. For instance, volume was down 22% from last year, but it was down 19% from the pre-pandemic average. Yes, there is a clear difference, but we’re not talking about twice as many sales last year. Granted, new construction numbers were truly sensational in 2021, so it’s honestly a mistake to only focus on 2021 vs 2022 numbers for that niche. More on that eventually.

SACRAMENTO REGION:

SACRAMENTO COUNTY:

PLACER COUNTY:

EL DORADO COUNTY:

YOLO COUNTY:

MARKET STATS: I’ll have lots of market stats out this week on my social channels, so watch Twitter, Instagram, LinkedIn, and Facebook.

Thanks for being here.

SHARING POLICY: I welcome you to share some of these images on your social channels or in a newsletter. In case it helps, here are 6 ways to share my content (not copy verbatim). Thanks.

Questions: What stands out to you above? What are you seeing happen in the market right now? I’d love to hear your take.

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

Getting high on housing hope

December 6, 2022 By Ryan Lundquist 22 Comments

Be an optimist in life. Be full of hope. And let nothing shake you. But when it comes to housing stats, be realistic about the market that actually exists. Today, let’s talk about getting high on housing hope (and unpack fresh stats).

UPCOMING (PUBLIC) SPEAKING GIGS:
1/18/23 WCR Market Update in Cameron Park (register here)
1/19/23 Big market update at SAR on Zoom (details TBD)
1/23/23 Residential RoundUP on Zoom (register here (free))
3/10/23 PCAR Market Update (detailed TBD)
5/22/23 Yolo YPN (details TBD)

A FEW THINGS ABOUT HOUSING HOPE:

1) Hope vs glaring stats:

Over the past week, I’ve had quite a few conversations with people who think the market is going to rebound in 2023 since they say rates are poised to decline ahead. I suspect purchase applications being up slightly over the past few weeks and mortgage rates dipping has birthed some enthusiasm. Look, it’s fine if that happens, and it’s nice to hear excitement about the future, but let’s be sure to embrace the market that’s actually here at the moment too.

2) Modest rate changes won’t alter the trend:

Modest rate declines aren’t going to be an instant reset button to bring missing buyers back to the market. We’re missing about 40% of buyers right now locally, so affordability is still a massive issue. That’s what I tried to communicate last week when talking about the market getting worse before it gets better. The idea is we won’t see volume get back to normal until affordability improves. And like I said, we don’t know how long volume will be subdued, and obviously rate declines can help boost affordability.

3) The housing narrative is like a ping pong game:

The housing narrative seems like a game of ping pong where glowing and dark outlooks are rallying back and forth. Some say the market is going to rebound, but then there’s concern about recent jobs numbers. Or in one breath some think rates will go down, but in the next there’s uncertainty about the Fed meeting next week. Or people are pumped about conforming loan limits increasing, but affording the market is still not doable for many buyers.

4) Nobody knows the future:

The truth is nobody can predict the future of the housing market with certainty. Everyone has ideas, but nobody knows for sure what will happen. This doesn’t mean we ought to be naive about trends or the future because we’re clearly in the midst of a market with depressed volume and dropping prices. The bottom line is housing needs to become more affordable. Keep in mind lots of predictions are based on rates at 6%+, so predictions will be amended if rates change. Ultimately, let’s keep watching and cultivating objectivity by embracing perspective formed by the numbers.

I hope this was hopeful. Thanks for being here.

———–——– DEEP LOCAL MARKET UPDATE ———––——

Scroll quickly or digest slowly.

HOW I’M DESCRIBING THE MARKET:

The market is still moving, but lots of buyers are missing in action, prices have dropped faster than normal, and it’s taking much longer to sell. Sellers aren’t quite up to speed with proper pricing, but they’re offering credits to buyers more frequently, which shows they’re listening. Sellers haven’t been rushing to list as we’re still missing a few hundred listings from a normal trend.

SELLERS ARE STARTING TO LISTEN:

This is good to see. 49.4% of closed sales in Sacramento County had concessions last month. This means nearly half of all sales had some sort of credit for repairs, closing costs, rate buydown, etc..

PRICES HAVE DECLINED 3X FASTER THAN USUAL:

There are two stats to look at here. How much has the market gone down in recent months, and much is it still up?

One thing to note is prices dropped a little less in November compared to previous months, but I wouldn’t write home over that. I’m anxious to see how the stats unfold in December. So far, a reading of pending properties suggests a definitive price drop for December. We’ll see.

NOTE: Placer stats bounce around more since there aren’t as many sales, so take the median price with a grain of salt.

SOME OF THE MARKET IS MISSING IN ACTION:

It’s easy to focus on prices, but I think volume is the bigger story because it shows how many buyers are actually participating in the market.

1) Past 7 Months: Since May we’ve seen over 5,000 fewer sales in the Sacramento region compared to last year. In other words, volume is down by 29% compared to last year. But, about 13,000 sales have happened, which shows the market hasn’t stopped.

2) Past 60 Days: But now let’s look at volume over the past 60 days to get a better idea of the trend. When we look at more recent history, it’s clear volume has dropped lately by nearly 43% (not just 29%).

3) The historic average: Lots of people ask if the comparison to 2021 is bad since volume was higher that year. Well, it makes a little bit of a difference, but not much. Here’s a look at pre-pandemic average volume, which shows the region is down 40% instead of 43%. But look at Sacramento County being down 45%, which is hardly different than the image directly above.

PRICES ARE OFFICIALLY DOWN FROM LAST YEAR:

It’s been a long time since we’ve seen year-over-year price declines, but that’s the market we’re in right now. This is exactly what should be happening since affordability has taken such a huge hit lately. Remember, closed sales in November really tell us what the market used to be like in October when the bulk of these properties got into contract.

MONTH TO MONTH CHANGE:

Looking at sequential months is key too so we don’t just get stuck or hyper-focused on last year (the past).

NOTE: Take Placer with a grain of salt (not many sales).

OTHER PRICE VISUALS:

OTHER VISUALS:

MARKET STATS: I’ll have lots of market stats out this week on my social channels, so watch Twitter, Instagram, LinkedIn, and Facebook.

Thanks for being here.

SHARING POLICY: I welcome you to share some of these images on your social channels or in a newsletter. In case it helps, here are 6 ways to share my content (not copy verbatim). Thanks.

Questions: What stands out to you above? What are you seeing happen with in the market right now? I’d love to hear your take.

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

days on market

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