Sacramento real estate trends

Wait, isn’t the market supposed to be tanking?

May 14, 2020 By Ryan Lundquist 8 Comments

Surprised. That’s how many people seem to feel about the housing market since it’s way more competitive than we thought it would be for a pandemic. In fact, some buyers think they’re about to score the deal of a century until they start shopping and realize we don’t have that sort of market right now.

Look, I’m not wearing rose-colored lenses. I’m not saying the housing market is perfectly healthy or there aren’t glaring red flags on the horizon. I’m just saying there is a sense of shock right now that the market has felt as strong as it has for these past two months.

Two quick things:

1) Imposing headlines: There are lots of sensational headlines, but we need to be cautious about imposing them on the market. What I mean it’s easy to read a headline about the housing market being doomed because of XYZ, and then we expect to see certain trends in the local market. My advice? Look to local data instead and let the numbers form your perception and narrative of the market.

2) Be objective: Every week there’s a new viral idea about the future, but we have to wait and see what happens. I know it drives some people crazy when I say that, but it’s true. There are obviously red flags about the future in light of forbearance and unemployment in particular, but we still don’t know how both issues are going to play out exactly. This is why I recommend knowing the numbers and being objective about the future instead of tossed around by every new sensational idea.

NEW MARKET VIDEO: We’re two months into the pandemic now and it’s been five weeks since the market bottomed out. We’ve seen a shift up in new listings and pending contracts, and this tells us both buyers and sellers have been getting used to this market. This is 14 minutes. Check it out below (or here).

BRAND NEW VISUALS:

I’ve been in my Excel workshop cutting up some brand new graphs. Are there any keepers?

Unemployment: We’re seeing some huge changes in unemployment, so I plan to update these visuals monthly.

Inventory by price range: Here is a crazy-looking visual to show inventory by price range. I know this is a hot mess, but I share specific price ranges below. The point is inventory is not the same in every price range or neighborhood.

Days on market: Did you know homes spent 29% less time on the market this April compared to last April? Here’s a look at how long it took to sell by price range. In short, the market was more aggressive at lower prices (not a surprise). Also, don’t read too much into million dollar stats because there are fewer sales in this segment.

2-4 Units: I’ll be watching the multi-unit market to gauge change and whether we see a bigger drop in volume than the single family market. Of course we also have to consider rent control as an added layer that can affect the trends this year too.

Volume at the top: I’m watching the market above $600K to gauge if there is more change at the top than the bottom. In this visual I’m asking how the percentage of “jumbo” prices so to speak changes over time. This isn’t the perfect visual to tell us everything, but if we see this percentage decrease it might be a clue that less deals are happening at higher price points. Also, I know I need to change the graph to say “15%” instead of “0.15%”. For the life of me I couldn’t get that to work.

Volume change by price range: It’s important to study what the market is doing at various price points. I’ve been asked countless times about the upper end of the market lately. Frankly, we need more time. We only have two months of data. But here is a visual that I’ll be adding to over time. This visual basically gauges the change in the number of sales between April 2019 and April 2020 by price range.

Keep in mind the BOTTOM IS NOT CRASHING. The lowest prices saw a huge dip in volume close to 60%, but that’s because these price ranges had such a huge rate of appreciation over the past year. There are simply fewer sales under $300K this year, so the numbers at the bottom look really sensational on this graph. In short, this is where we have to know how to think through the numbers. Please don’t say the bottom is crashing (it’s not).

WEEKLY STATS: I’m updating this one every week.

BIG MONTHLY UPDATE:

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

Let’s dive into Sacramento, Placer, and El Dorado County (and the region).

DOWNLOAD 100+ visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

I don’t have market commentary this month because I’ve been giving so much commentary in my weekly video (and on Zoom calls). It’s just too much to write more here.

SACRAMENTO REGION (more graphs here):

SACRAMENTO COUNTY (more graphs here):

PLACER COUNTY (more graphs here):

EL DORADO COUNTY (more graphs here):

DOWNLOAD 100+ visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

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

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‘Tis the season for real estate predictions

December 12, 2019 By Ryan Lundquist 17 Comments

Buckle up. It’s real estate prophet season where everyone and their Mom has a prediction about the market next year. Here are some quick thoughts and then a deep dive into local trends for anyone interested.

1) Nothing too extreme: So far I’m not hearing too many extreme views on the housing market. What I mean is there aren’t as many voices saying, “It’s going to tank” or “We’re going to have massive increases.” For instance, here’s a forecast from Realtor.com and it’s pretty mild. Very little price growth and a dip in the number of sales too. For reference, I wouldn’t base my perception of the market on any forecast.

2) Consumer thoughts & Twitter: I asked Twitter to predict and people seemed to mostly think prices would be flat or modest. This isn’t anything scientific, but the results don’t surprise me based on conversations I’ve been having. If you work in real estate, ask people what they think. But be careful about opinions formed from headlines instead of local data.

3) Beware of the prophets: Spoiler alert. Nobody knows what the market is going to do, so beware of false real estate prophets who predict the same thing every year and then repackage their predictions for the new year. My advice? Don’t lose credibility by trying to predict the future. It’s okay to say, “My crystal ball is broken, but I can tell you what the market is doing right now.” This doesn’t mean we don’t have ideas where things might go based on current data, but it does mean we’re ultimately humble about our ability to predict the future.

And now ironically here’s a piece from the Sacramento Bee on where the market is heading in 2020 (behind a paywall). I was asked to pitch in some thoughts and I did. Of course like a broken record I always start a media interview like this with, “My crystal ball is broken…. Here are some things to consider.”

Any thoughts?

—–——– Big local market update (long on purpose) —–——–

This post is designed to skim or digest slowly.

Summary: Some fall seasons are really dull, but this hasn’t been one of them. In fact, if you’re looking for a slogan right now it could be, “Hey man, it’s not that dull.” The numbers look pretty hot too, but there’s a reason for that (which I’ll get into below). Yesterday when speaking in a real estate office someone asked, “Ryan, has the market not been as slow this year? It seems like it.” And my answer was, “You’re exactly right.” Granted, we’re still seeing signs of a traditional seasonal slowing, but the market has felt more vibrant than usual. This is actually the type of trend we had in 2017 where many real estate professionals said things like, “It seemed like the market just kept going.” Well, technically the market did slow, but I understand why people said that.

DOWNLOAD 90 visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

THE SHORT VERSION:

It’s not that dull
The numbers are hot technically
A new tech company in town
FHA on the prowl
Stop waiting for multiple offers
Rent control communication
Kurt Cobain’s house
Fewer multiple offers this season
How to find school boundaries
California price record
Sellers are still disconnected

THE LONGER VERSION:

Here are some of the bigger topics right now:

Not that dull: Last year many thought the market was at a tipping point because it just felt dark. Sales volume was slumping in a big way and inventory was spiking as buyers stepped back from the market. But today things feel much different in light of low mortgage rates changing the feel of the market. In fact, most price metrics have seemed flat this fall and it took eight less days to sell this November compared to last year at the same time.

Sifting hot numbers: Price metrics have been more glowing lately, but I advise taking these with a grain of salt. The thing is last year the stats were depressed, so when we compare normal numbers today with dismal stats then, it tends to make things look really hot. My advice? Over these next few months be aware of more sensational data due to lackluster stats from last year. Otherwise if we’re not careful we might end up thinking the market is much hotter than it actually is.

A new tech company in town: There’s yet another new tech company playing the local market. This time it’s an outfit called Reali, which appears to be a discount brokerage, but they say they have AI too. Thanks to Mudge on Twitter for the photo of this listing in East Sac.

FHA has been up: For years FHA has been shrinking because there are more conventional products that can readily compete with FHA. But these past few months we’ve seen a bit of an uptick in FHA. This is nothing massive, but it’s worth noting and maybe indicative of an appetite among first-time buyers to get into the market. Last month 21% of sales were FHA in Sacramento County and this past month we saw 19% of all sales. This is up slightly from FHA tending to hover closer to 17-18% or so for the past couple of years. Again, this isn’t something major, but my curiosity is at least piqued.

Accept the offer: We are not in a market with a crazy number of multiple offers. This is exactly what the stats show. Here’s a look at the number of offers among all current pending sales. My advice to sellers? If you get one reasonable offer, it’s probably time to accept it rather than waiting for a mythical unicorn buyer to swoop in and pay more.

Uh, rent control communication: Rent control is a new dynamic and there is going to be a learning curve when it comes to communicating about it. Just yesterday I spotted several listings that mentioned how rents can be raised or how rent control didn’t apply. My advice? Know the letter of the law and how it’s going to be different in the City of Sacramento as well as California. Locally we have two different sets of rent control to consider, and they are similar but not the same. In case it’s useful I did a rent control Q&A a few weeks back. This isn’t a super sexy topic to read about because it’s technical. But these details matter and for anyone who works in real estate it’s time to know the fine print.

Doesn’t smell like teen spirit (hopefully): Kurt Cobain’s former house in Seattle is for sale at $7.5 million. As a guy who loves 90s music I’m definitely watching this. If you’re interested, here’s a history of sales, permits, and other stuff from the Assessor. Remember, if you buy a house that is famous because of a former occupant or something that happened there, you might have people coming by. In fact, here’s a picture I took while visiting Seattle a couple years ago. By the way, think of the marketing opportunities…. “Come as you are,” or “Nevermind about other homes…”

Fewer multiple offers: There’s been fewer multiple offers lately, but that’s a normal part of the fall season. At this time of year there’s simply not as many eyeballs on listings which means there’s also fewer offers. This underscores exactly how important it is to price for the market that actually exists today rather than the more aggressive trend in the spring.

School boundaries: Here’s a quick screencast I put together for a friend on how to find school boundaries. This can come in handy to be able to quickly find boundaries for all schools (not just the district). This can matter at times for pulling comps too.

California new high price record: We have a new record in California as the “Beverly Hillbillies” mansion sold for about $150M. No, this doesn’t mean your property is worth more now. The highest residential sale ever in the United States is an apartment in New York at $238M (it was several apartments combined actually). I’ve read about a flip in SoCal that is supposed to come to the market eventually for $500M…. We’ll see.

Disconnected sellers: Last but not least, sellers are still lagging behind the trend. What I mean is the market has slowed, but sellers are stuck in the past and expecting to command lofty prices from super hungry Bay Area Buyers. They think everything is selling cash too when in fact only 15% of the market was cash last month. It’s like sellers are showing up to a party with Z Cavaricci pants and “Can’t Touch This” t-shirts. They didn’t get the memo that style has changed… Okay, that got weird.

News 10: If you think this post is absurdly long already, you’re right. Here’s a piece I did on News 10 this morning though on gentrification in Oak Park. I pulled some cool stats and honestly I was pretty excited to see my stats so large on the screen too. Haha.

I could write more, but let’s get visual instead.

FIVE THINGS TO TALK ABOUT:

1) SLOWER GROWTH (with an asterisk): Price growth has been slowing. It’s what the stats are telling us. Though technically the monthly and quarterly data below show higher price growth this year. But take this with a grain of salt because the market was REALLY dull last year. So when we compare numbers this year with dismal stats from the last half of 2018 it tends to inflate the numbers today.

2) PRICE CYCLES: Here’s a look at the past few price cycles in various counties. This is a fascinating way to see the market. What do you notice?

3) LAST YEAR vs THIS YEAR: All year long most price metrics have been up about 2-4% each month compared to last year, but these past two months they’ve been higher. This is likely due to stats sagging last year during a really dull 2018 fall season. Additionally, mortgage rates went down a few months ago and we’re likely seeing some of the effect of that.

4) VOLUME SLUMP: We’ve been having a definitive sales volume slump since mid-2018, but lately volume has been stronger. In other words, sales volume has been up for three out of the past five months. This is something to keep on the radar. It’s not a volume meltdown, but it’s definitely been a slower year.

5) LAST MONTH vs THIS MONTH: The market looks pretty flat in some categories from October to November. But in other ways we still see the market slowing. For anyone who says we are not having a seasonal slowing, please look closely at all the images in this post. We are. It just hasn’t been as dull as some other fall seasons.

NOTE: Take El Dorado County data with a grain of salt. Stats change significantly month by month. Also, if you’re in Placer, be careful about only looking to Placer data because limited sales can mean numbers jump around quite a bit from month to month.

Thanks for respecting my content: Please don’t copy my post verbatim or alter the images in any way. I will always show respect for your original work and give you full credit, so I ask for that same courtesy. Here are 5 ways to share my content.

Please enjoy more images now.

SACRAMENTO REGION (more graphs here):

SACRAMENTO COUNTY (more graphs here):

PLACER COUNTY (more graphs here):

EL DORADO COUNTY (more graphs here):

DOWNLOAD 90 visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: What sort of predictions are you hearing (or making) right now? What stands out to you about the market? Anything to add?

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Street names & hot stats with an asterisk

November 13, 2019 By Ryan Lundquist 17 Comments

I have two things on my mind. Street names and super “hot” market stats. Then for those interested I’ve include my big monthly market update below.

Two things:

1) Street Names: Just for fun, could a street name actually affect value? I mean, if it was really off-color, would buyers pay less because of a name? In my mind it seems iffy because I’ve never seen a name that would actually deter buyers. Yet the middle schooler in me can think of some examples that might work… Anyway, after a conversation on Twitter, here are some of the more random street names in Sacramento. What funny or odd street names have you seen?

2) Hot stats with an asterisk: Last year we experienced a REALLY dull market in many places across the country. If you remember mortgage rates ticked up and it was as if a dark cloud was looming over the housing market. I’m bringing this up because stats last year were depressed. Thus when comparing last year to more glowing or normal numbers today it can make recent price figures look really sexy. My advice? Over these next few months be aware of more sensational data due to lackluster stats from last year. Otherwise if we’re not careful we might end up thinking the market is much hotter than it actually is.

Any thoughts?

—–——– Big local market update (long on purpose) —–——–

This post is designed to skim or digest slowly.

Summary: The numbers are “hot” this month. Prices are up to a greater extent than they’ve been most of the year, inventory is down, pendings are strong, and sales volume has been up too. Part of the reason why the numbers are so stellar is because last year’s numbers were dull, but some of the hotness stems from low mortgage rates a few months back too. In other words, strong pendings from the summer finally closed in October.

DOWNLOAD 90+ visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

THE SHORT VERSION:

It’s been a normal fall so far
FHA buyers have been hungry
Zillow bought their first house
Anemic housing supply
Celebrity flippers are coming
Rent control doesn’t apply to every property
Market crash vs recession
Strong million dollar market
Slowing price momentum
Overpricing is still an issue

THE LONGER VERSION:

Here are some of the bigger topics right now:

Normal fall so far: Not all fall seasons are created equal. What I mean is some falls are duller than others, and this year so far has seemed to be a stronger season. Granted, prices are still softening like we’d expect, but it’s nothing like the painfully dull fall we had last year when some thought the market was about to take a big turn.

Hungry first-time buyers: Last month FHA was 21% of the market in Sacramento County. It’s been over two years since we’ve seen a month with 21% of the market go FHA. For years FHA has been declining because there are conventional products that can readily compete, but so far in 2019 FHA is up 5.6% in Sacramento County.

Zillow’s first purchase in Sacramento: About a month ago Zillow entered the Sacramento market and they just closed on their first house. It was a $560,000 private sale in Carmichael. On a related note, a piece came out in Forbes this week about iBuyer models paying close to market value. Look, we need to remember the credits these companies are getting from owners are padded into the purchase price. So instead of reducing the price to account for repairs, iBuyer tech companies are keeping the price higher and getting a credit for repairs within the purchase price. This is a huge advantage because it makes it look like the price is even closer to fair market value.

Anemic housing supply: Last week the big news was sellers are spending an average of 13 years in their homes instead of 8 years. As a result we’re seeing fewer homes hit the market. This is surely in part a consequence of eight years of historically low mortgage rates. We now have millions of owners with less incentive to list because they’re sitting on a low rate with equity.

Celebrity flippers are coming on strong: A few weeks ago I couldn’t sleep and I snapped this image while watching television at 4am. This flipping program aired simultaneously on four major networks. My advice? Be careful. We all want financial freedom, but you can spend thousands of dollars on these seminars to obtain “secret” flipping knowledge you can probably get for free.

Rent control does not apply to single family homes in Sacramento: I have an exhaustive Q&A post on rent control coming soon, but for now I wanted to mention something important. Rent control in the City of Sacramento only applies to properties within city limits with two units or more that were built prior to 1995. It does NOT apply to single family homes. However, if an investor owns ten or more properties under an LLC (and a couple other scenarios), rent control can apply. Keep in mind California has some differences between Sacramento rent control. Here’s an overview of rent control in California with a video link to a lawyer talking through rent control dynamics.

Ready for the market to crash because of a recession: Some prospective buyers are waiting for a recession in hopes of the market crashing, but real estate doesn’t always crumble when a recession happens. In fact, sometimes prices even rise. Here’s a video I made to talk through the past five recessions in Sacramento. This is a huge topic right now.

Strong million dollar market stats: The million dollar market has been growing. We really are in a market of outliers where we’re seeing some of the highest prices ever (Sellers, don’t overprice because of this). For reference, the top three sales ever in East Sacramento have all sold this year.

Slowing price momentum: Overall price growth has slowed down from years ago. This isn’t a shocker because I’ve been beating this point to death for the past couple years at least. What I mean is prices are moving forward still, but it’s not the type of rapid growth we saw in early 2013.

The plague of overpricing: Sellers these days are fixated on glowing stats and they’re often thinking the market is more competitive than it actually is. It’s like sellers are saying, “The market is SO hot and I’m going to get tons of offers,” but then buyers are like, “OK, boomer” (sorry, had to fit that in). Seriously though, overpricing is an enormous problem for sellers among all ages, price ranges, and locations. My advice? Price according to similar homes that are actually getting into contract. Remember, the market in later November and December is usually the slowest time of year. If you’re priced right you’ll likely get one or two offers, but if you’re priced too high you’ll likely get zero.

I could write more, but let’s get visual instead.

FIVE THINGS TO TALK ABOUT:

1) SLOWER GROWTH: Price growth has been slowing. This isn’t my idea or agenda. It’s what stats are telling us. This market is still very competitive when priced correctly, but it’s not a market with hefty price appreciation.

NOTE: Two of the categories above are showing slightly more price growth in 2019 compared to last year. But remember, when looking at data for October or the past 90 days, we have to consider how dull the market was last year.

2) PRICE CYCLES: Here’s a look at the past few price cycles in various counties. This is a fascinating way to see the market. What do you notice?

3) LAST YEAR vs THIS YEAR: All year long most price metrics have been up about 2-4% each month compared to last year, but this month they were a little stronger. This is likely due to stats sagging last year during a really dull 2018 fall season. Additionally, mortgage rates went down a few months ago and we’re likely seeing some of the effect of that.

4) VOLUME SLUMP: We’ve been having a definitive sales volume slump since mid-2018, but lately volume has been stronger. In other words, sales volume has been down fifteen out of the past eighteen months. But sales volume has been up for three out of the past four months. This is something to keep on the radar. It’s not a volume meltdown, but it’s definitely been a slower year.

5) PRICES ARE SOFTENING FOR THE FALL: The market generally slowed in October, which is expected for the time of year.

Please enjoy more images now.

SACRAMENTO REGION (more graphs here):

SACRAMENTO COUNTY (more graphs here):

PLACER COUNTY (more graphs here):

EL DORADO COUNTY (more graphs here):

DOWNLOAD 90+ visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: What’s the wildest street name you’ve seen before? What market trend above stands out to you the most? Anything to add?

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

Rates are low, but buyers aren’t going nuts

July 11, 2019 By Ryan Lundquist 21 Comments

Rates and inventory are really low, so on paper it seems like the market should be booming. But it’s not. The truth is sales numbers are down despite rates doing the limbo below four percent again. It’s like the market looks hot on paper, but it’s also a bit lackluster in some ways.

Affordability: A big issue today is buyers are struggling with affordability. After seven years of price increases, we’re seeing the market become too expensive for many prospective buyers since wage growth has not kept pace with price growth. Some buyers feel uncertain about the future also, which is causing hesitancy about whether to purchase.

Hot couple analogy: The market is like a super hot couple that looks great on paper. They’re rich, attractive, successful, and they get a ton of “likes” on Instagram. Everything looks perfect, but then out of nowhere they break up because it turns out their relationship wasn’t as good as everyone thought. In a similar way, the real estate market looks stellar on paper. Rates are low, inventory is sparse, and it’s actually really competitive out there. But we’re also seeing weaker sales volume which shows us buyers aren’t as enthusiastic as we’d assume them to be.

Any thoughts?

—–——– Big local monthly market update (long on purpose) —–——–

Now for those interested, let’s talk about Sacramento trends. If I had to pick a few phrases to describe the market it would be competitive if priced right, modest price growth, slumping volume, and fairly normal stats for the spring.

DOWNLOAD 70+ visuals: Please download all graphs here as a zip file. See my sharing policy for 5 ways to share (please don’t copy verbatim).

THE SHORT VERSION:

Prices are up, volume is down
It kinda feels normal right now
Price growth has been modest
46% of sales had multiple offers last month
Sales volume is down for the 14th month in a row
Low rates have helped change the feel of the market this year
Inventory is thin, but slightly higher than last year
The post is long on purpose. Skim or pour a cup of coffee

THE LONGER VERSION:

Here are some of the bigger topics right now:

Normal: The market felt really dull last year, but it’s been a somewhat normal year so far in 2019. There are certainly concerns about affordability, but from a stats perspective it’s been a pretty standard first half of the year. Pendings continue to be strong also, so buyers still clearly have a strong appetite for the market.

14 months in a row of slumping volume: Despite mortgage rates being low we’re seeing somewhat sluggish sales volume. In fact, sales volume was down 11.6% in the region last month and it’s down 8.6% so far in 2019. Moreover, we’ve had fourteen months in a row with lower sales volume compared to the previous year. In my mind it’s still best to say we’re having a slower year instead of a volume meltdown because levels aren’t alarmingly low by any stretch. Let’s watch this carefully.

Dude, rates will never get below 4% again: It’s been a little surprising to see how low rates have gone again, right? The narrative for a while was, “Dude, they’ll never go below 4% again. We’ve bottomed out.” Yet here we are. My sense is if rates keep going down it’ll only increase competition and artificially inflate prices. That would be temporarily nice for buyers, but an unfortunate byproduct is low rates in a wider picture tend to create less incentive for sellers to move. Why sell if you’re sitting on a 3.5% mortgage rate?

Purplebricks & the tech invasion: Last week it was announced that Purplebricks will be exiting the United States housing market after a 75% loss in shares. This company is going to the grave in the U.S., but the reality is we’re still in a market where tech companies are trying to disrupt the traditional real estate model. Next up? Zillow is said to be coming to Sacramento by the end of the year.

Joe Montana’s $49M overpriced listing: Former Quarterback Joe Montana listed his property for $49M and it didn’t sell because it was profoundly overpriced. In fact, the price has now been reduced to $28M. Many sellers are like Joe in trying to attract mythical unicorn buyers who will mysteriously overpay for some reason. My advice? Be aware that today’s buyers are incredibly picky about paying the right price.

The dream of selling at the top: I met a guy who wants to sell because he says the market might top out soon. His concern is a friend sold two years ago thinking the market was at its peak, but it wasn’t. The truth is it’s not so easy to time a market perfectly. We talk about how simple it is to do this, but most people pull it off from dumb luck more than anything. The reality is the bulk of buyers don’t buy based on price metrics, but rather lifestyle and affordability.

This is a fascinating chart, right? It shows a few price cycles over the past twenty years in Sacramento County. I don’t share this to say prices are about to change directions, but at some point that’s probably what we ought to expect because that’s what markets do. They go up and down. For now price momentum has been slowing and we’ll continue to watch this closely to see how it plays out. Let’s remember the collapse we saw in 2005 was not a normal trend that’s now the formula for the next price cycle. That was a market built on fraud and rampant speculation.

The coming recession: There are lots of predictions about a coming recession, and at some point one will happen. But predicting recession specifics is a bit like predicting housing market specifics. At the end of the day we might have ideas, but we don’t know the future if we’re honest. Moreover, the last “great” recession isn’t now the template or formula for all future recessions.

Eyeballs vs offers: Over two years ago I wrote about a $250M listing in Bel-Air. At the time it was the highest-priced property in the United States, and it was called “record breaking”. But today it’s still on the market and priced at $150M. Despite going viral and having global attention this listing did not sell. This reminds us it’s nice to have eyeballs on a listing, but the only thing that matters is offers. Sellers, if you aren’t getting offers, it may be time to adjust your pricing until the market bites.

Preparing for a slower season: At this time of year we typically see the market begin to slow down. The sales stats don’t show it yet, but when July stats come out we usually see it starts to take slightly longer to sell in July compared to June. This is a clue into a slowing market, and eventually we see more slowness in actual prices (but it often takes a few months to see the slow trend show up in actual sales stats). This is a good reminder to pay close attention to pendings today because that’s where we see what the current market is doing. What is similar and actually getting into contract? That is THE question.

I could write more, but let’s get visual instead.

FOUR BIG ISSUES TO WATCH:

1) SLOWER GROWTH: The market has moved forward this year, but it’s been at a slower pace. In other words, the market has felt competitive this year, but price momentum has continued to slow. Remember, “slower” and “slow” are not dirty words in real estate. They are market realities.

2) A QUICK RECAP: All year prices have shown a modest uptick. What I mean is prices are up from last year, but not by much. Keep in mind the lowest prices are likely the “hottest” market in town too.

3) VOLUME SLUMP: The number of sales has slumped in the region for 14 months (and 13 months in Sacramento County). Overall volume is noticeably lower this year, but it’s still not outside of normal low ranges though either (see 2014 and 2015).

SACRAMENTO REGION:

Key Stats: