Median Price

Saying goodbye to pandemic home price gains

November 8, 2022 By Ryan Lundquist 16 Comments

Sellers have been saying goodbye to some of the equity they gained during the past couple of years. In Sacramento, we’ve actually lost 40% of the pandemic gains since May. Today I want to talk about price trends, and I hope this is helpful – whether you’re local or not. Skim quickly or digest slowly.

White wood texture background with the title, "Saying goodbye to some home equity."

UPCOMING (PUBLIC) SPEAKING GIGS:
11/15/22 Sacramento Bee Q&A at 12pm (RSVP here)
11/17/22 Bias & Real Estate Lunch & Learn (RSVP here)
12/5/22 SAFE Credit Union market update on Zoom (register here (free))
1/18/23 WCR Market Update in Cameron Park (details TBD)
1/19/23 Big market update at SAR on Zoom (details TBD)
1/23/23 Residential RoundUP (register here (free))

A meme from Dumb and Dumber with Jim Carrey and two actors in the front seat of a truck. Carrye has his hands over his ears. The caption reads, "Sellers not listening to the market."

THE POSTER CHILD FOR CHANGE

The trend isn’t going to be the same in every location across the country, but I suggest paying attention to pockets like Sacramento, Boise, and Phoenix that all seems to be the poster child for quick market change.

40% OF PANDEMIC PRICE GAINS ARE GONE

We’ve seen sharp price declines over the past six months as the median price has dropped by $75,000 (or 12%) since May in the Sacramento region. This is about three times the normal speed for seasonal softening. This doesn’t mean every property is literally worth 12% less, but I have to say the change is sizeable when looking at neighborhood comps lately and hearing feedback from real estate agents. Sellers, did you hear that?

Change: The median price rose $185,000 from the beginning of the pandemic, and $75,000 of that increase has disappeared over the past six months. Or we could say the median price is still up $110,000 from March 2020.

A bar graph from early 2020 to October 2022 to show the median price in the Sacramento region (a huge uptick and a sizeable downturn lately).

THE MARKET IS NOT A PARKED CAR

I heard someone talk about the housing market as if it was a parked car, but I disagree with the analogy because the market hasn’t literally stopped. For instance, over the past two months in the region there were 1,800 fewer sales compared to last year, but there were nearly 3,400 sales that did happen. I find it’s easy to fixate on the glaring portion of the market that’s missing, but let’s not forget to see the part that is happening.

NEIGHBORHOOD TRENDS

It’s easy to fixate on the median price for the region, but when appraising in neighborhoods my trendlines are also showing a sharp change. Here’s an example with the 95747 ZIP code in Roseville. As I talked about recently, I am definitely selecting the “declining” box in my appraisal reports.

95747 ZIP Code market trends in Roseville (a yellow scatter graph to show the downward trendline lately)

NO PRICE RANGE IS IMMUNE

“My neighborhood is super special.” I know, it really is, and so are you. But all ships rise and fall with the tide. What I mean is every price range has seen an effect from higher mortgage rates. Keep in mind volume is down in every single price range in the region too, which reinforces this point. However, the bottom half of the market has seen the biggest change in volume, which suggests buyers who are more sensitive to rate changes are having a more difficult time.

A bar chart to show the median price in various countiees in Sacramento since May

FLIRTING WITH LAST YEAR

This is exactly what sellers need to hear right now. The median price in the Sacramento region is the same as it was last October. On one hand this feels like a big event, but it’s really not a shocker since prices have changed quickly to adapt to a dramatic shift in the monthly mortgage payment. In other words, a sharp change in rates has led to a sharp change in the stats.

A bar graph to show the median price is the same as last year in the Sacramento region

OPENDOOR IS GETTING BODY SLAMMED

This market hasn’t been easy for iBuyers. 76% of Opendoor‘s active listings are listed below their acquisition price. This is blatant carnage. Keep in mind Opendoor typically has a 5% credit from the seller, but even with that it’s not enough to be profitable in so many of these listings.

Redfin: It was announced this morning that Redfin is stopping their iBuyer business. Here are some Redfin stats I posted on Twitter.

A chart to compare Opendoor acquisistion prices with the current list price among active listings in the Sacramento region (a bar chart)

WAITING FOR AFFORDABILITY

Prices have dropped, but this hasn’t translated to more affordability since rates have continued to rise. Some people are predicting lower rates in 2023, but we’re going to have to wait to see what happens. Almost nobody gets their rate predictions right, and I don’t pretend to have a crystal ball.

DOUBLE-WHAMMY FOR SELLERS

The problem with overpricing is prices are going down, so the longer you’re on the market, the more you lose. Not only will you have to lower the price due to being overpriced from the beginning, but you now have to lower even more due to prices declining since you listed. It’s a double-whammy.

A table to show the percentage and number of properties with price reductions right now in the Sacramento region by county

LOSING 2.5% PER MONTH

For five months in a row the median price has dropped by about 2.5% each month, and this visual helps show the change. The red line is the pre-pandemic average so we can see what “normally” happens from month to month. For instance, from September to October the median price normally dips by -0.07% (red line), but this year in 2022 the dip was -2.65% (black line). Remember, this doesn’t mean every property has literally lost 2.5% in actual value. Moreover, not every county has shown the same loss either by the month.

I can’t emphasize enough the importance of looking to neighborhood comps to understand the market. In other words, DO NOT automatically impose a downward 2.5% regional metric on a property (big mistake). But don’t take these stats lightly either. If anything, these numbers can be a cold shower to wake sellers up. There is a smaller pool of buyers right now, so price it right to meet buyers where they are at.

A line graph to help show monthly median price change in the Sacramento region. There is a red line to show what normal looks like and then a black line to show 2022. In short, the black line is way below the red line lately.

YEAR OVER YEAR STATS:

Here’s a look at stats compared to last year. Remember, closed sales in October really tell us what the market used to be like in September when the bulk of these properties got into contract.

MONTH TO MONTH:

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

OTHER PRICE 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 prices right now? I’d love to hear your take.

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

Are home prices declining? What are appraisers saying?

October 25, 2022 By Ryan Lundquist 37 Comments

Home prices are the holy grail in real estate, and it almost seems sinful or off-limits to say they’re going down. But let’s be real. That’s what is happening right now locally and in some other portions of the country. Let’s talk about what this means as well as what’s going on in appraisal reports.

UPCOMING (PUBLIC) SPEAKING GIGS:
11/4/22 Market update in Roseville (real estate pros only (details here))
11/15/22 Sacramento Bee Q&A at 12pm (RSVP here)
11/17/22 Fair Housing Lunch & Learn (RSVP here)
12/5/22 Safe Credit Union Lunch & Learn (details TBD)
1/18/23 WCR Market Update in Cameron Park (details TBD)
1/19/23 Big market update at SAR on Zoom (details TBD)
1/24/23 Market update with Joel & Mike (details TBD)

YES, THERE IS A BOX

If you didn’t know, there is a box on appraisal reports where appraisers can state property values are either increasing, stable, or declining. Here’s what the box looks like. I’ve been hearing about some appraisers checking the declining box lately and others not. It’s a mixed bag (rightly so).

THE MARKET ISN’T THE SAME EVERYWHERE

It’s really important to note the market is NOT the same in every location and price range across the country, so appraisers aren’t going to be checking the same box everywhere. Even in a local market, it’s possible different locations or property types are not experiencing the same trend. I mean, all ships tend to rise and fall with the tide, but we have to let the research do the talking instead of imposing a declining narrative on every portion of the market.

YES, THE MARKET IS DECLINING

In Sacramento, prices have clearly been declining as demand has changed sharply in recent months. In other words, buyers are hands-down paying less today than they did in previous months. We see this in lots of metrics I’ve been writing about for months, and even neighborhood graphs are finally starting to show a declining trend (it takes a bit for graphs to have enough data to show the trend). This is more than a modest seasonal dip as the median price is down about 10% right now since May. In a normal year we might see the median price down about 3-3.5% at this time of year. A few weeks ago I talked about the median price being very close to dipping below last year, and even Redfin is starting to show that for Sacramento (see this thread).

Example 1: Neighborhood Graphs

Example 2: County, City, & Regional Stats

BRO, THE MARKET IS JUST STABILIZING

To me the word “stabilization” is a bit rosy because price declines have been much more intense than usual. Stabilization or normalization would maybe resemble a more seasonal trend or a leveling off, but what we’ve experienced lately has been a sharp drop in buyer demand. Most counties are down in sales volume by about 25-30% over the past few months compared to recent years, so this has been a bigger shift in demand rather than a typical seasonal change.

BUT PRICES ARE STILL UP FROM LAST YEAR

Yeah, prices are technically up from last year when looking at September stats, but there is a clear declining trend happening right now too. It’s sort of like if I lost 70 pounds and then gained 20 back. I’m still down 50 pounds technically, but do you know what the real trend is? It’s me gaining weight lately. And just to be clear, I’m not sharing real stats from my body even though I have gained 20 this year. Haha. I’m just saying it’s a mistake to focus on year-over-year prices to the point of missing what is happening in front of us right now.

BUT WE NEED MORE DATA

How many months of data are needed before we can establish a trend? I’m not sure there is a specific answer that applies to all situations, but I would say having almost six months of slower data now is more than enough. I think we probably needed half or more of that to start seeing a clear trend. Even by June we knew volume was starting to take a 25%+ hit, so we knew there was a sharp change at hand. It just takes time for the trend to show up in actual prices to be able to make the call as to what is happening. It’s okay if you think we still need more data, but let me ask you this. What more do you need? I’d love to hear in the comments or an email (not interested in hate mail though).

Q&A HOUSING VIDEO I DID

I recorded a video with YouTuber Jeb Smith to talk about dynamics in today’s market. This was recorded about two weeks ago, and it’s all off the cuff (my favorite way to do things). Watch here or below.

THERE IS STILL COMPETITION

Prices are going down because affordability has taken such a beating lately. It’s that simple. In recent months mortgage rates have changed faster than they have in forty years, so it’s not a shocker to see a quick change with prices. Do you know what would be shocking? To not see a change. But remember, declining prices doesn’t mean there isn’t any competition. It’s a mistake to say all buyers have left the market because that’s statistically not true. Keep in mind about 36% of pendings over the past two weeks in the region had multiple offers per MLS stats. Also, while we’ve seen about 3,600 fewer sales happen since May of this year, there have been nearly 11,000 sales that have happened. In other words, declining prices doesn’t mean the market has stopped. Bottom line.

NOT LOCKED INTO ONE TREND FOR SIX YEARS

The trend is declining right now, but that doesn’t mean we’re automatically locked into this one trend from here on out. It also doesn’t mean we won’t see some spring seasonality ahead either. When the market drops in Sacramento, it’s not uncommon to see about five or six years of a downward trend, but I’d be careful about stating we’re locked into that. Maybe. Maybe not. Keep in mind it’s not a sharp plunge for an entire downward cycle either. Ultimately, the verdict is still out on the future since we are just at the beginning of change, but right now prices are dropping in light of such a huge hit to affordability lately. In a sense it feels like a game though where the Fed could manipulate things and change the trajectory of the market. So, if rates go down sharply, that could alter the dynamic. Some like Ivy Zelman predict it’s possible for the housing market to move faster now in light of access to real estate data like never before, but that’s also to be determined.

WE NEED 12 MONTHS OF DATA TO SAY IT’S DECLINING (FALSE)

Sometimes I hear appraisers say we need twelve months of data before calling something a trend, but why twelve months? And to play devil’s advocate, when values started to really turn up in the summer of 2020, did we need to wait 12 months until we said the market was increasing? Absolutely not. In short, we do not need twelve months before making a call for the direction of the market. If that was the case, then appraisers would perpetually be far behind the trend in an increasing market and a declining market.

NATIONAL vs LOCAL

It doesn’t matter what the “national” housing market is doing because the so-called national market is really made up of thousands of local markets. Some experts project a declining trend that will start in 2023, but that means nothing for Sacramento and so many other locations. Remember, homes prices fell maybe 30% in some markets during the previous housing downturn (and far less in some areas), but the median price dipped by 59% in Sacramento County. This just goes to show a national projection or trend doesn’t mean squat for the local market.

DOES THIS MEAN APPRAISALS WILL BE COMING IN LOWER?

Just because the market is declining doesn’t mean every appraisal is going to be coming in below the contract price. Lately it’s been a mixed bag and there are lots of appraisals still coming in higher according to conversations with loan officers. I have definitely heard of lower appraisals, but that’s not a bad thing (unless the appraisal was deficient). An appraisal below the contract price could have been a deathblow to a transaction in 2021, but hopefully today it’s more of a bargaining chip (sounds healthier to me).

THE MARKET LOOKED “STABLE ON THE DAY”

I recall when the market was tanking in 2007 hearing some appraisers say they’d check “stable” because “the market was stable on that day.” This was basically to appease lenders at the time who pressured appraisers not to check the declining box. This is not legit though because appraisers are tasked with being a neutral party to the transaction, which means showing bias like this to clients is off limits. Besides, if an appraiser is not identifying the trends correctly, that could show up in adjustments that are not given to the comps, right?

DUDE, IT’S JUST A PERSONAL OPINION

A local loan officer told me an appraiser said it’s just a personal opinion as to whether this declining box is checked or not. I mean, I can understand the sentiment since there isn’t a rigid list for what appraisers need to identify before saying a market is declining. Thus, there really is an element of subjectivity here. But this is where the appraiser has to be the expert by considering all relevant issues and diagnosing the trend based on research, stats, and observations. In other words, this little box to check should be backed by stats and support for the conclusion. If it’s just a checked box without support, then the appraiser hasn’t done his or her job.

Okay, that was probably more than you wanted to read…

ADVICE FOR COLLEAGUES

1) Be the expert in your market by being on the cutting edge of the trend.

2) Reflect the market and support your conclusions. If you feel afraid a client won’t keep you around if you say the market is “declining,” that’s not a good client. But also, if we start to get more robust stats from big data companies that the market is declining, you’ll be really behind the trend if you’re saying it’s NOT when everyone and their mom knows it is.

3) If you don’t know how to measure prices, talk to colleagues and get up to speed as quickly as you can. Take a class, scour the internet, try to add some new skills to your bag of tricks.

4) Take the time to unpack the market in each appraisal report. I honestly don’t care which box you check, so there is no pressure from me. But support the trends you say exist with some commentary and rationale.

5) If you aren’t making scatter graphs like my neighborhood ones, maybe it’s time to figure that out (or use some other type of graph). I have some free graph tutorials in case it’s helpful.

Thanks for being here.

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

Questions: What stands out to you most above? What did I miss? I’d love to hear your take.

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

Home prices are close to dipping below last year

October 10, 2022 By Ryan Lundquist 16 Comments

We are on the cusp of seeing year-over-year median price declines, so let’s talk about it. I wanted to share what looks to be on the horizon in the Sacramento area, and whether you’re local or not, I hope this is helpful.

UPCOMING (PUBLIC) SPEAKING GIGS:
10/11/22 Folsom MLS Meeting (9am)
10/13/22 Market update in Midtown (12-2pm Sign up here)
10/18/22 Orangevale MLS Meeting Q&A (9am)
10/20/22 How to Think Like an Appraiser (9am-12pm) (Sign up here)

THE SCOOP ON PRICES & DOOM

First off, I’m not a doom and gloom guy perpetuating fear for clicks. This is about objectivity and the stats – not being alarming. Okay, that aside, let’s dig into the details. The dotted line in the visuals below is a projection for the October median price based on the price of pending contracts in September. In short, the top line is the median price in 2022, and since May we’ve seen a sharp change which looks like it’s very close to touching or going below last year. It’s possible stats won’t dip below next month, but it looks strongly plausible for Sacramento County (the region will be really close). Keep in mind, this doesn’t mean every single month ahead will be below last year since price metrics can bounce up and down. Whatever the case, we’re close, and it won’t be shocking if finalized October stats are near my projected line. We’ll see.

A line graph to show the median price in the Sacramento region for the past few years. Today's prices are starting to touch last year.

Sacramento County median price line graph to show the median price this year is poised to go below last year

Placer County line graph to show median price trends and that the median price is very similar to last year

BUT BRO, THE MEDIAN HAS ISSUES: Okay, if you don’t care about technicalities about the median price, skip this section. Some might question the median price, and that’s healthy. The thought is we’re seeing smaller homes sell this year, which waters down the median price. But since May the average home size in the region is down 1.74% from last year and the median size is down 0.74%. In short, we’re not talking about a massive difference in size that accounts for the dramatic price difference today (home size does matter). However, all price ranges have seen a dip in volume, and if we start to see more of a dip at the top or bottom, that could certainly affect the median price. Lately volume has been hit the hardest at lower prices. Ultimately, I advise watching traditional metrics such as the median price, average sales price, and average price per sq ft, but also watch big data firms that put out price indexes that don’t have anything to do with the median. Absorb it all. On that note, I talked to Rick Palacios Jr of John Burns Real Estate Consulting and he tells me their Burns Home Value Index is down 7% from the spring through September in Sacramento. In contrast, the median price is down 8.9% from the spring during this same time period. So, there’s a difference, but not too far apart.

CHOOSING COMPS: Being close to last year doesn’t mean the best comps are automatically going to be from one year ago. Maybe. Maybe not. This is where it’s critical to study recent neighborhood sales as well as listings and pendings. The story won’t be exactly the same in every neighborhood, so be careful about imposing a “prices are lower than last year” narrative on every area.

MARKET TRUTHS:

1) CHANGE: Markets go up and down, and home prices are not sacred. In my office I have a sign that says, “The market is always moving.” It’s just true. And while Chuck Norris might eat 7% mortgage rates for breakfast, it’s not as easy for the rest of us mere mortals.

2) WE NEED AFFORDABILITY: As I said a few weeks ago, higher rates are changing the game, and we ought to believe the Fed when they say they want to reset the housing market. If rates went down dramatically, it would bring lots of buyers back, but prices would still be high, so low rates alone don’t solve the affordability issue. This is where price declines today seem necessary for the climate of rates at seven percent.

3) BUT INVENTORY IS LOW: Inventory is definitely still historically low, but a lack of affordability is the bigger force here. In other words, low housing supply isn’t the trump card to keeping prices up. I find sometimes people use a low inventory narrative to say prices cannot go down, but the stats are currently showing otherwise.

4) WE NEED TIME TO SEE THE TREND: There are many ideas about the future and the magnitude of possible declines, but only time will tell for sure. Remember, projections for “national” housing trends don’t mean much for local markets. So, when people say things like, “Dude, the national market will take a 10% hit,” that might not apply at all to Sacramento or wherever you are located. The truth is some areas will feel it more than others.

5) FIGURING IT OUT: The market will adapt and figure this out. If rates keep rising, we’re poised to see more buyers step aside. Bottom line. But this doesn’t mean all buyers and sellers will stop. For now, we are missing about 3,500 sales in the Sacramento region since May, but over 10,000 sales have happened within this time period. Sometimes people talk like literally everyone has stopped buying, but that’s fake news. I’m not trying to sugarcoat the housing trend. I’m just saying we need to obsess over actual stats and form our perception based on the numbers. And remember, it might not be a good time for you to buy or sell, but that doesn’t mean it’s that way for everyone. Look, buy or don’t buy, but be confident in your decision. No pressure from me.

SOME ADVICE:

1) BUYERS: Be patient for the right house and do not overpay. Try to get a better deal, get credits, ask for repairs, and see if you can get a price reduction. Be realistic though. Prices have been going down, but this is not January 2008 either. In recent months we’ve seen 26% fewer sales, which means you have more power. But it also means 74% of the market has still been happening. In short, don’t make any rash decisions, and get as much as the market will give you right now.

2) SELLERS: If you want to compete for the attention of buyers today, you have to put your best foot forward and accept that buyers aren’t desperate for you. Seriously, buyers are picky about getting into contract, and they’re going to walk if you play games. Buyers are really sensitive about price, location, and condition. You can only control the price and condition, so do all you can to compete. And use a mortgage calculator to plug in numbers to see what the monthly payment looks like on a house like yours. Once the shock wears off, let that be fuel for reasonable pricing. What is similar and getting into contract? Price according to those data points rather than your neighbor John who is smoking pricing crack (technical term for John being unrealistic).

3) REAL ESTATE FRIENDS: It looks like price metrics are going to dip below last year. If not next month, it’s likely to be soon unless something interrupts the trend. The truth is this can be really challening for some real estate professionals who are used to saying only ultra-positive things about the market. My advice? Build your business and narrative on the stats and lifestyle buyers instead of glowing news of prices being up. It’s not about the direction of prices, but instead about finding prospective clients who have incentive to buy and sell regardless of what prices are doing. This is true in an up market and it’s true in a down market. Bottom line.

Thanks for being here.

—–——– DEEP LOCAL MARKET UPDATE ———––

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.

YEAR OVER YEAR STATS:

Here’s a look at stats compared to last year. And remember, closed sales in September really tell us what the market used to be like in August when the bulk of these properties got into contract.

MONTH TO MONTH:

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

OTHER VISUALS:

Here are lots of visuals. Probably more than you wanted. I have mostly Sacramento County and regional stuff this time around since most of my presentations have been in Sacramento lately.

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 prices right now? If you’re not local, are prices in your market close to year-over-year declines? I’d love to hear your take.

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

The most aggressive housing market ever?

January 10, 2022 By Ryan Lundquist 12 Comments

Was last year the most aggressive housing market we’ve ever had? I’m going to go out on a limb and say HECK YES based on the stats. But what do you think, whether you’re local or in a different market?

A picture of a road in the desert with the caption question, "Most aggressive housing market ever?"

January public speaking gigs:

January 12: Top Producer Panel in Granite Bay
January 18: SAR Big Market Update (sign up here)
January 19: PCAR WCR Big Market Update (details TBD)
January 25: Joel Wright’s Market Event

Post outline (since this is longer):

1) Records were broken
2) Sacramento region recap
3) Sacramento County recap
4) Placer County recap
5) El Dorado County recap
6) Yolo County recap

STATS: Annual stats include the entire year (Jan to Dec). These stats are not just a comparison of Dec 2020 with Dec 2021.

1) RECORDS WERE BROKEN:

A) Fastest-moving market ever: This is no surprise to stressed buyers and a stressed real estate community, but we had the fastest-moving market ever in the region. It took an average of 17 days to get into contract, which is the lowest annual number on record. The wild part is the median days on market was only 7, which means half the market got into contract in a week or less.

This visual shows a line graph of days on market and median days on market from 2000 to 2021.

B) Highest dollar growth ever: Prices increased more than ever this year in terms of dollars. The median price increased by $90,000 and the average sales price was up about $99,000. These are both records. The stunning part is this took place in our tenth year of price growth in this cycle.

What about percentage growth? Percentage growth was NOT a record even though price metrics were up about 20%. The truth is we’ve seen this type of percentage growth before, though when prices were lower it was so much easier to see higher percentages. This is why noting the dollar amount is so important. All that said, let’s remember part of the glowing numbers here has to do with more sales at higher prices (which pads the stats).

C) 18 months of less than one month of supply: Since July 2020 we’ve had less than one month of housing supply in the Sacramento region. There has never been a stretch this long. It wasn’t even this bad during 2013 when investment funds were gutting the market. Having one month of inventory means if no other listings came to the market we would only have enough for one month’s worth of buyers.

A line graph to show the months of supply over the past 2 years (this helps show we've had 18 months of supply under one month

D) Highest percentage of multiple offers ever: In April we reached the highest percentage of multiple offers we’ve seen in the region at 76%. It’s easy to say 100% of sales are getting bid up with multiple offers, but that’s not true. Check out how disconnected a figure like 76% is from normal though. The real shocker though is 57% of sales in DECEMBER had multiple offers, which is higher than any other SPRING market besides 2021. Read that again. By the way, this stat has only been available for five years (though it’s likely April 2021 was the highest ever still). We can debate in the comments or cage fight if needed.

E) One year of paying at or above the list price: Every month this year buyers paid at or above the list price. I know, this sounds a bit dull or obvious, but it’s truly sensational. Take a look at the image to show how far off the orange line (2021) is from the rest of the pack. In a competitive year we might see a few months where buyers on average pay at or above the list price, but last year this happened ALL YEAR LONG. Even in December buyers on average paid right at the list price. In a normal year we should’ve seen 3% or more below the list price in December. Keep in mind we did see seasonal slowing for the second half of the year, but it didn’t feel like slowing to many since the market basically “slowed” to a really elevated level.

NOTE: This is the average. There are many examples of buyers paying well above the asking price and even 15% of buyers last month paid below.

F) More million dollar sales than ever: This past year 7% of sales were above one million dollars and that’s the highest percentage on record. Well, I should say this is the highest percentage without adjusting for inflation, so there is an asterisk here. If someone wants to adjust for inflation, please do so. Also, there were twice as many million dollar sales compared to 2020.

CONCLUSION: In short, the stats are insane. Can you see why I’m saying it was our most aggressive year ever? You don’t need to agree with me, but if you disagree, I’d love to hear why. Also, I don’t have stats for 1853 during the Gold Rush, so I’m really just talking about recent history.

Any thoughts?

——————— huge market recap below ———————

THE SHORT VERSION:

The market in 2021? Prices went way up, housing supply was anemic, volume was slightly higher in most counties compared to the previous year, and properties sold as fast as they ever have. Most of the year the market really felt like an auction due to supply and demand being so lopsided. We have a supply problem with sparse listings and we have a demand problem fueld in large part by mortgage rates around 3%. When looking at the past two years it’s apparent the market sped up again after years of slower growth. Ultimately while the stats are glowing, how many think having another year or two of growth like seems sustainable? I’m guessing few hands went up since affordability has been declining and mortgage rates are presumably going to rise. Anyway, enjoy an offensive amount of visuals and feel free to share some images too.

Thanks for reading my sharing policy so we’re on the same page.

THE LONGER VERSION:

I’ve outlined lots of recap stats below by county and I hope you find these useful. Keep in mind these are ANNUAL visuals that compare a year’s worth of sales to the previous year. This is why some of the visuals don’t have a normal up and down rhythm during the spring and fall. What do you see though? What stands out to you?

2) SACRAMENTO REGION (Sac, Placer, Yolo, El Dorado)

3) SACRAMENTO COUNTY:

4) PLACER COUNTY:

5) EL DORADO COUNTY:

6) YOLO COUNTY:

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Questions: What stands out to you the most above? What are you seeing out there in the market?

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Median Price

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