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housing market in Sacramento

Overpricing, multiple offers, & hot ranges

November 10, 2020 By Ryan Lundquist 10 Comments

The market is hot. But it’s not so hot that you can command any price you want. Today I have a quick post to show a few trends. These are brand new visuals with some great takeaways (I think). Enjoy if you wish.

1) MULTIPLE OFFERS

Huge change this year: There were 39.3% more multiple offers this October compared to last year at the same time. This speaks to how much more competitive the market has been lately. While we are experiencing a slight seasonal slowing right now, the market is far more competitive than it should be for the time of year.

Not everything: Last month 32% of listings had price reductions. In short, even though the market is super aggressive it doesn’t mean everything is selling above the list price.

10-20 Offers: This year we’ve seen substantially more properties with 10-20 offers compared to last year. The highest number of offers last month was 37 too (just in case you want to sound super smart).

Here’s a look at 5-10 offers too. What a difference!!

NOTE: Our MLS has two fields called “multiple offers” and “number of offers.” This is how I’m extracting the data.

2) THE MOST AGGRESSIVE PRICE RANGES:

This is geeky stuff, but it’s so important for understanding the market isn’t the same in every price range or neighborhood.

The most aggressive: The most aggressive price range in the Sacramento region is between $300,000 to $400,000 (not a shocker). The sales price to original list price ratio is 101.65%, which basically means properties in this range sold on average 1.65% above the original price. In short, the lower the price, the more aggressive the market is. Keep in mind there are few sales below $300,000, so don’t write home over that lower stat. 

The most overpriced range: This year we’ve had explosive growth with the number of million dollar sales as there have literally been twice as many over the past four months compared to last year. But this price range is also the most overpriced. On average sales above one million dollars last month closed about six percent lower than their original list price. At times million dollar listings are literally priced hundreds of thousands of dollars too high (or even millions). 

And one more visual to show last year vs this year…

Market update: In this market update video I talk quickly through eleven trends. I hope you walk away with some insight. Enjoy if you wish.

Free webinar next week: I’m doing a big market update next 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.

QUICK CLOSING ADVICE:

1) Price reasonably and you should be able to get at least a few offers.

2) Price too high and you’ll likely get zero offers (seriously).

3) Sellers, you don’t need to aim to get twenty offers. I suggest aiming for a few solid offers. My stats even show you don’t need 20 offers to get the highest price.

4) Sellers, aim for the market instead of that mythical unicorn Bay Area buyer who will mysteriously overpay for some reason.

5) Buyers, study your competition in your price range and offer accordingly. There is a good chance you may need to offer above list and have cash to pay any difference between the contract price and a lower appraisal. This is not easy on buyers, but it’s the dynamic out there right now.

6) Buyers, start looking at properties that have been on the market for 30 days or more. These ones are likely overpriced and it may be easier to get into contract on something like that.

7) Other. What else?

I hope this was interesting or helpful.

Questions: What are you seeing in various price ranges? I’d love to hear your take from your vantage point in the trenches.

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

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Filed Under: Market Trends Tagged With: advice for buyers and sellers, Appraisal, Appraiser, buyers, competitive housing market, housing market in Sacramento, market stats, Market Trends, Sacramento Appraisal Blog, sacramento regional housing blog, sales price to original list price ratio, sellers, stats

Crazy contracts & condos are less popular

September 22, 2020 By Ryan Lundquist 17 Comments

I have two things on my mind today. Let’s talk about condos and then some of the crazy contracts we’re seeing happen right now. Then I have lots of visuals for those who are interested.

CONDOS ARE NOT ALL THE RAGE:

It looks like condos aren’t so popular these days. During the pandemic buyers have been saying no thanks and instead focusing on homes with more space. No matter how you look at it there are fewer condo sales happening, and that’s telling. If you’re not local, what’s happening in your area?

MARKET NOT COLD: One thing I want to clarify is just because condos haven’t been as popular doesn’t mean the condo market is dull or cold. Inventory is still sparse among condos, so don’t expect to get the deal of a century. In fact, there is not an oversupply of listings among condos at this time. Inventory is really tight. 

CRAZY CONTRACTS:

It’s common these days to see the appraisal contingency removed and many buyers are even offering to pay above the appraised value (if it comes in lower than the contract price). Anyway, I’ve been getting lots of questions about this, so here are some thoughts:

1) Value is not found in the contract: The reality is value is found in the comps – not the contract. Technically the terms in the contract shouldn’t matter because the only thing that counts is comparable data. Of course I realize some appraisers are swayed by the contract, and that’s unfortunate. Ultimately if you find yourself worried about the terms, I’d recommend focusing instead on communicating well with the appraiser because the comps are the bigger factor.
 
2) Offering above the appraisal: When I see a contract that states the buyer will pay above the appraised value by a certain amount if the appraisal comes in lower, the practical part of me wonders if the buyer actually thinks it’s not worth what was offered. But since my job is to be objective, my curiosity about the buyer doesn’t mean anything for the appraisal. The bottom line is I cannot let that influence my perception of market value. Besides, offering to pay more might not be about the buyer’s perception of value at all. Instead it could be a strategy to get an offer accepted. And most of all, the comps are what matters – not what an individual buyer thinks about value.
 
3) Hiding information: I was asked recently if it would be OK to only give the appraiser the purchase contract without an addendum that had further terms. Look, I’m not a lawyer or broker, but from my perspective I’d ask that you please give the appraiser the entire contract instead of holding something back for whatever reason. In my mind when this happens it seems like the goal is to try to influence the outcome of the appraisal, and that doesn’t smell right. Let’s keep it transparent.
 
Anyway, this is a loaded topic. Lots of emotions. What are your thoughts? Any stories to share? Please do so in the comments.
 
MARKET UPDATE VIDEO: Here’s my latest market update where I unpack glowing rebound stats. Watch below (or here).
 

WAY TOO MANY VISUALS:

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

I hope that was interesting or helpful. Thanks for being here.

Questions: What are you seeing with condos right now? What’s happening with contracts too? Anything you’d like to see change?

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Filed Under: Market Trends, Random Stuff Tagged With: aggressive market, buying during a pandemic, condos, Greater Sacramento appraisal blog, housing market in Sacramento, imbalanced market, inventory, market stats, pandemic market trends, sacramento housing stats, Sacramento Region Appraisal Blog, supply and demand, trend graphs

Bigger Things, Zooming Out, & Buyers vs Sellers

June 3, 2020 By Ryan Lundquist 6 Comments

There are way bigger things happening in the world than real estate. So this post won’t have much text. For now let’s listen to what’s happening around us and find ways to heal as a country.

Zooming into weekly videos: I was doing five to seven Zoom sessions per week for months and I’m feeling burned out, so I’ll be scaling back after an incredible ride. I’m actually still available for digital speaking gigs, but they’re mostly for associations or for hire. However, I’ve shifted things to YouTube where I’ll be doing a weekly update. Would you join me there? 

More buyers than sellers? For two weeks we’ve seen more pending contracts than new listings. I think this market has surprised lots of people who expect big price declines and dullness. Subscribe to my channel.

Highlight reel:

  • Sales volume is starting to increase again
  • Pendings have crested pre-pandemic levels
  • Listings were lackluster last week
  • Canceled listings are fairly normal again
  • Hold listings are getting closer to normal
  • Prices have been somewhat flat lately

I hope this was interesting or helpful. Thanks for being here.

Questions: What are you learning about life right now with all the protests going on? As far as real estate, I’d love to hear your take also.

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

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Filed Under: Market Trends Tagged With: burned out, competitive market, COVID-19 market, housing market in Sacramento, increasing pendings, pandemic real estate market, pandemic real estate trends, Real Estate Market, Sacramento Appraisal Blog, sacramento regional appraisal blog, sales volume increasing, Zoom fatigue

A recap of the Sacramento real estate market in 2016

January 11, 2017 By Ryan Lundquist 14 Comments

High demand. Modest value increases. Price sensitive. Those are ways to describe the real estate market in 2016. Today let’s take a deep look into where the market went last year. This post is long on purpose. You can scan it quickly or pour a cup of coffee and spend some time here. If you aren’t in Sacramento, I hope you can still find some value. Do you see any parallels to your market? Any thoughts? 

P.S. I have some really cool year-in-review images. Please share.

13516718 - white wood texture with natural patterns

DOWNLOAD 76 graphs HERE: Please download all graphs in this post (and more) here as a zip file (including a one-page quick stat sheet). See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

A Market Rush: Overall prices saw a dip these past few months as the regional median price declined 4-5% from summer. This isn’t anything unexpected because it happens virtually every year. Just as there is a season for fishing, fashion, or television, there is also a season for real estate values. Granted, 2016 did have a more aggressive feel in that multiple offers were commonplace, it took an average of 7 less days to sell a home compared to last year, and inventory was sparse at best. In fact, the year closed with the strongest months of sales volume in the past 5 years for November / December. It’s as if there was a rush on the market from September through November that ended up beefing up these year-end stats. Why did sales volume increase? Some say it’s the power of Trump or the anticipation of a new political era. Or it could be buyers were expecting an increase in interest rates and wanted to get in before a rate hike. Or maybe it’s the byproduct of a fall that wasn’t all that dull and a market with strong demand. Or maybe it’s a combination of all or none of the above.  🙂

When looking at the entire year, most price metrics increased 7-9% and sales volume was up a modest 2% overall for the year. Remember, just because price metrics increased by 7-9% does not mean actual values increased by that much (we can talk about that more below if you wish). My sense is prices at lower levels saw larger increases than the middle and upper end of the market, which means a more aggressive bottom tends to create larger increases on paper. I say this because it’s easy to see the median price at 10.5% higher and say, “Values went up by 10.5% last year,” but that just isn’t true for the bulk of the market. On a related note, last week I mentioned trends to watch in 2017, and if I had to add one more thing I would say there could easily be a problem this year with overpricing homes because of so much focus on the market being “hot” without looking at actual data.

A few year-in-review images:

sacramento-county-year-in-review-blog-size

sacramento-region-year-in-review-blog-size

placer-county-year-in-review-blog-size

Sacramento County:

  1. The median price was $315,000 in December (6.5% above last December).
  2. Housing inventory is about 10% lower than it was last December.
  3. Sales volume was 7% lower this December compared to last December, but this year and last were higher than 2012, 2013, and 2014.
  4. It took 3 days longer to sell a house last month compared to November. 
  5. One year ago in December it was taking 4 days longer to sell.
  6. FHA sales volume is down 6% this year compared to 2015 (but 25% of all sales this year were FHA).
  7. Cash sales are down 11% this year (they were 13% of all sales last month).
  8. The average price per sq ft was $202 last month (about the same as November, but 7.5% higher than last year).
  9. The average sales price at $343,670 is down about 4% from the height of summer (but is 6% higher than last year).
  10. When looking at the entire year in Sacramento County it took 33 days on average to sell a home this year.

A few images to show the bottom and top of the market:

all-residential-sales-in-sacramento-county-by-sacramento-appraisal-blog

all-residential-sales-under-100k-in-sacramento-county-by-sacramento-appraisal-blog

all-residential-sales-under-100k-in-2016-in-sacramento-county-by-sacramento-appraisal-blog

million-dollar-market-in-sacramento-county-by-sacramento-appraisal-blog

Some of my favorite images this month:

cdom-in-sacramento-county-by-sacramento-regional-appraisal-blog interest-rates-since-2008 inventory-december-2016-by-home-appraiser-blog median-price-context-in-sacramento-county price-metrics-since-2015-in-sacramento-county-look-at-all

SACRAMENTO REGIONAL MARKET:

  1. The median price was $350,000 in December (7% above last December).
  2. It took 3 days longer to sell compared to the previous month (but 4 less days compared to December 2015).
  3. Sales volume was about 1% lower this December compared to last year.
  4. FHA sales volume is down 6% this year compared to last year. 
  5. Cash sales are down 8% this year compared to last year.
  6. Cash sales were 14.4% of all sales last month.
  7. The average price per sq ft was $208 last month. That’s down about 1% from the height of summer and 8% higher than last year.
  8. FHA sales were 22% of all sales in the region last month.
  9. The average sales price was $387,915 in December. It’s down about 5% from the height of summer but 8% higher than last year.
  10. When looking at the entire year in the region it took 37 days on average to sell a home this year.

Some of my favorite images this month:

median-price-sacramento-placer-yolo-el-dorado-county

regional-inventory-by-sacramento-regional-appraisal-blog

sacramento-region-volume-fha-and-conventional-by-appraiser-blog

inventory-in-sacramento-regional-market

days-on-market-in-placer-sac-el-dorado-yolo-county-by-sacramento-appraisal-blog

PLACER COUNTY:

  1. The median price was $423,925 in December (7% above last December).
  2. It took 2 less days to sell compared to the previous month (but 9 less days compared to December 2015).
  3. Sales volume was about 1% lower this December compared to last year.
  4. FHA sales volume is down 11% this year compared to last year (FHA sales were 18% of all sales in Placer County last month).
  5. Cash sales are down a mere 1% this year compared to last year.
  6. Cash sales were 16% of all sales last month.
  7. The average price per sq ft was $216 last month, which is about as high as it’s been all year (about 8% higher than last year).
  8. REOs were 1.5% and short sales were 1.8% of all sales in Placer County.
  9. The average sales price was $472,130 in December. It’s down about 2% from the height of summer but about 9.5% higher than last year.
  10. When looking at the entire year in Placer County it took 42 days on average to sell a home this year.

Some of my favorite images this month:

regional-market-median-price-by-home-appraiser-blog

months-of-housing-inventory-in-placer-county-by-sacramento-appraisal-blog

placer-county-price-and-inventory-by-sacramento-appraisal-blog

placer-county-sales-volume-by-sacramento-appraisal-blog

days-on-market-in-placer-county-by-sacramento-appraisal-blog

DOWNLOAD 76 graphs HERE: Please download all graphs in this post (and more) here as a zip file (including a one-page quick stat sheet). See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

Questions: Did I miss anything? What are you seeing out there? How would you describe the market? I’d love to hear your take.

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

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Filed Under: Market Trends Tagged With: Greater Sacramento Region, home appraisals, house appraisals, housing market in Sacramento, Placer County, real estate graphs, real estate market in 2016, recap of 2016, Sacramento County, Sacramento Real Estate, sactown, values in sacramento

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