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pandemic real estate trends

The aggressive & slowing housing market

October 6, 2020 By Ryan Lundquist 25 Comments

Insane. Crazy. Irrational. The housing market has been described this way in many places around the country lately. But in the midst of freakishly high demand there is still a seasonal rhythm to see in the background. Let’s talk about that.

Today’s post seems long, but it’s mostly images.

BIG POINT: Understanding what the market normally does throughout the year helps us give good advice, make plans, do a better job with valuations, and spot when something abnormal is happening.

WHAT DOES THE MARKET DO DURING THE YEAR?

Seven years in one graph? Yep. This visual looks at the average of seven years worth of sales for each month, so even though there is just one line we end up with a solid visual of how the market behaves throughout the year. This is so important because being a real estate expert involves lots of things, but one big factor is understanding how the market moves. 

Tutorial: I’m actually game to do a video tutorial on how to make this visual. If I get a number of people interested I’d be glad to do that. Let me know.

Here is 2020 showing an abnormal trend…

UPDATE: I think some people are caught on my title instead of what I am communicating in the body of this post. Look, the market is not soft. Prices have continued to rise and we’re having an abnormal fall season so far in many ways. Frankly, this fall is far more aggressive than it should be for the time of year. Yet sales volume is starting to flatten too, which is a sign of some slowing. That’s what the stats and visuals are indicating right now, so that’s the story we ought to understand and tell. When saying this though I think some people hear, “The market is dull,” but that’s not what I am communicating. The market is always changing and doing different things. Why can we not clearly and confidently say, “The market is white hot, but we’re also seeing sales volume slow down”?

NOT THE SAME:

Many markets have a similar pattern to the one above, but others look totally different because of weather, being a vacation destination, etc…

MARKET UPDATE VIDEO: Here are a few things on my mind right now.

ANOTHER VISUAL:

Here’s a different way to look at sales volume. Check out this year in black compared to previous years. What is volume doing?

THE TAKEAWAY:

The black line shows sales volume looks like it hit its peak for the year a couple months ago, so even though we are calling this market white hot, we can still see a slowing trend creeping in the background. This doesn’t mean the market is dull (I didn’t say that). In short, this year we’re beginning to see a change in volume, but overall the fall season hasn’t been normal because by now prices are usually cooling off and it should be taking longer to sell rather than fewer days.

Okay, two more counties…

PLACER COUNTY & EL DORADO COUNTY

Check out the rhythm of the market in these two counties. This is a really good picture for how the market tends to behave through the year.

Now check out the black line. Do you see the increase lately? Like I said a few weeks back we’ve seen a huge influx of buyers in Placer & El Dorado County. In other words, the black line shows an abnormal amount of buyers lately. Also, we see what looks like a seasonal slowing of volume as the black line looks to be curving down.

Anyway, I hope this was helpful or interesting.

Thank you again for all of your support in my life these past months. I am fully back to work and doing my best to pace myself.

Questions: Do you think this fall we’re going to see a big slowing or barely any slowing? What are you seeing out there? 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: Bay Area buyers, becoming a real estate expert, competitive fall season, El Dorado County, Home Appraiser, House Appraiser, pandemic market, pandemic real estate trends, Placer County, Sacramento Appraisal Blog, Sacramento County, sacramento regional appraisal blog, sales volume, seasonal market in Sacramento, trend graphs

Don’t hold your breath for a Covid discount

June 17, 2020 By Ryan Lundquist 9 Comments

“Why is there not a pandemic discount? I don’t get it. The market has been going down.” Someone was angry with me recently after an estate appraisal didn’t come in low enough in his mind. The thought was prices should be dipping because we’re in a pandemic, but that hasn’t been happening.

The Truth: Lots of people expect the market to be weak right now.

The Takeaway: Let’s be careful not to impose ideas on the market about what we think should be happening. Instead, let’s look to the numbers to form our understanding. Likewise, it’s critical to be objective about the present and keep an eye on glaring uncertainties regarding the future. But let’s do this without viewing stats through a rose-colored lens or painting every conversation with a doom and gloom brush.

Anyway, that’s what’s on my mind…

———————— big monthly update below ————————

BIG MONTHLY UPDATE:

This is long on purpose. Skim or digest slowly. Your call. 

FREE MARKET UPDATE: On Monday June 22nd at 10am PST I’m giving a one-hour free market update via Zoom through the Sacramento Association of Realtors. Please sign up here.

WEEKLY VIDEO: Here’s my weekly video update to talk through the latest trends (shorter this week too). Watch below (or here).

Now some big topics…

FLAT PRICES: When we look at the latest price trends, it’s pretty flat. As you can see, the stats show modest price gains since last year. Granted, this month was more subdued than last month, so before writing home about this trend we need a few more months of data to fully understand the market. Remember, this doesn’t mean the market is dull because it’s actually quite competitive. It doesn’t mean every price range and neighborhood are flat either. But it does remind us prices haven’t been going insane despite the market feeling ultra-competitive. 

CRESTING FOR THE SEASON: Based on the next three images, it looks like the spring season has started to crest. We’re seeing a dip in prices and we’re having less multiple offers.

NEXT MONTH THOUGH: When sharing about flat prices, I’ve been tending to get reactions saying price metrics in a couple months may show an uptick again because mortgage rates have gone down lately. Look, that’s possible and we can adapt our narrative if that happens. To be fair, there’s nothing normal about life and real estate lately, so anything is possible for the future and we’re certainly experiencing some abnormal pent-up demand right now.

SALES VOLUME DOING THE LIMBO: Here’s a brand new visual to show most counties in May were down 30% or more in volume from 2019. Do you like this one? Should I keep making it?

LEARN TO MAKE A GRAPH: In case you didn’t see this on my YouTube channel, I put out a new tutorial for how to make a graph with three price metrics. This can be made for a zip code, city, county, etc… My advice? Set aside an hour in your schedule to make learning this happen. Becoming more visual changed the way I see the market and it frankly changed my career.

LOW RIDING: We had the second lowest month of sales volume for May in Sacramento County over the past twenty years.

BUT VOLUME IS ACTUALLY INCREASING: When we look at sales volume by the week instead of the month, we’re starting to see more sales close. In fact, for four weeks now we’ve seen an uptick. This change reflects pending contracts from about 4-6 weeks ago finally starting to close. I suspect in coming months we’ll keep seeing volume increase since pendings have been on fire lately.

MORE PENDINGS THAN NEW LISTINGS: For the fourth week in a row we literally had more pending contracts than new listings hit the market in the Sacramento Region. This shows buyers have been coming back to the market more quickly than sellers. Let’s remember buyers have strong incentive to get into contract quickly to lock in a historically low mortgage rate, but sellers just don’t have that same sense of urgency.

CHANGE BY THE RANGE: Here’s a look at what’s happening with different price ranges. These two images compare the change in April and May from 2019 to 2020. I don’t know that there’s anything revolutionary here, but what we want to watch over time is whether different price segments are slowing or speeding up. I think with a few more months of data we might have more to consider.

INVENTORY AT DIFFERENT PRICE POINTS: What’s happening with inventory in different price segments? Well, it’s actually pretty tight, but let’s watch above one million closely because it’s trending a little higher. Granted, it’s pretty normal to have 8-10 months of housing supply at the highest prices, but still we’ve seen more of an uptick lately.

2,651 FEWER LISTINGS SINCE THE PANDEMIC: Over the past three months there have been over 2,500 fewer listings compared to the same time last year. No wonder why it feels so competitive…

Now here are more visuals. As if this post wasn’t long enough already…. See my sharing policy for 5 ways to share my content (please don’t copy my posts verbatim).

SACRAMENTO REGION:

SACRAMENTO COUNTY:

PLACER COUNTY:

EL DORADO COUNTY:

Okay, let’s wrap this thing up.

Questions: What stands out to you about the market right now? What are buyers and sellers saying? 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: flat prices, housing trends in sacramento, listings, low mortgage rates, pandemic housing market, pandemic real estate trends, pending contracts, pendings, sacramento housing market, sacramento regional appraisal blog, seaonal real estate market

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

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