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soft fall market

The waking market, pulling stats like a boss, & the year in review

January 12, 2018 By Ryan Lundquist 16 Comments

The market went to sleep for the holidays and it’s just starting to wake up. Let’s talk about that along with pulling stats like a boss. Then I have a huge market update and review for those interested. 

No sales to support higher values: In a normal January the market is in a weird spot. It’s coming out of hibernation from the holidays, and even though buyers eventually start offering higher prices, the most recent sales might not support higher contracts. In other words, sales from November and December might actually be much lower than what buyers are willing to pay in later January and February because the market has begun to awaken out of a lull. The reality is we might not see any upward value movement in sales stats until March, but the upward trend will begin to happen in January and February before we see it in the stats. Data lags the trend. I remind myself of this every year.

Getting practical: In coming time as the market presumably heats up I recommend looking for a pattern of pending sales (probably higher), watching for properties spending less time on the market, and study what prices normally do this time of year in your area. In many locations prices tend to pick up where they left off in the late summer before they faded during the fall.

Game-changing stats: Paying attention to numbers has literally changed my career, so I wanted to give some tips for how to begin pulling stats for a city, county, neighborhood… Here’s a chart you can use to track price changes and a few other key elements (DOWNLOAD here). I highly recommend carving out a few minutes each month to track some of these basics. Then of course find relevant ways to share the numbers with your clients and contacts.

Here’s a video where I talk through how to use the chart as well as mistakes to avoid. It’s about 10 minutes. Click below (or here) and watch in FULL screen:

–——-——- Big monthly market update (it’s long on purpose) ———–——-

Prices have been softening in Sacramento, but it hasn’t been painfully dull like some fall seasons. Overall prices in the region sloughed last month (not a surprise), it took six days longer to sell, and the year closed out with price metrics being about 8-10% higher than December 2016. The number of listings really took a nosedive last month, but that’s what happens since people don’t list in November and December unless they really have to sell. Listings should increase over the next couple months as the market heats up for the spring. I know hungry buyers feel like inventory won’t be coming, but it’ll happen.

Quick insight: Housing inventory is sparse, but one good thing is inventory seems like it went a little more sideways last year instead of declining sharply. On a positive note, the market ended with the lowest number of foreclosures and short sales in the past decade. This isn’t a shocker, but it’s still a sign of healing after the “bubble” burst more than ten years ago. Prices in 2017 increased about the same as they did the past couple years. Lastly, sales volume has been steady for a few years, and that shows the market has found a rhythm.

Recap of 2017 in Sacramento:

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

DOWNLOAD 75 graphs HERE: Please download all graphs in this post and more here as a zip file (includes a stat sheet too). See my sharing policy for 5 ways to share (please don’t copy verbatim).

SACRAMENTO COUNTY (more graphs & stats here):

Sacramento County Stats:

  1. The median price is currently $350,000. It’s about the same as last month & down 0.5% from summer.
  2. The median price is 11.1% higher than the same time last year.
  3. Sales volume in December was 5.6% lower this year than 2016. There were 1392 single family detached sales last month.
  4. It took an average of 36 days to sell a home last month (one year ago it was taking 3 days longer).
  5. The median days on market last month was 21 days.
  6. It took 3 more days to sell in Dec. compared to November (median days).
  7. FHA sales were 20.5% of all sales last month in the county.
  8. Only 0.7% of sales last month were bank-owned & 0.2% were short sales.
  9. The avg price per sq ft was about $221, which declined last month (9.6% higher than last year).
  10. The avg sales price softened about 1.5% last month and is $379,962. This is 10.5% higher than last year.
  11. Cash sales were 13% of all sales last month.

SACRAMENTO REGION (more graphs & stats here):

Sacramento Region Stats:

  1. The median price is $385,000. It softened nearly 1% last month.  
  2. The median price is 10% higher than the same time last year.
  3. Sales volume in December was down 4.7% this year. There were 2202 single family detached sales last month.
  4. It took an average of 42 days to sell a home last month (one year ago it was taking 2 days longer).
  5. The median days on market last month was 24 days, which means properties are selling really quickly.
  6. The median days on market increased by 5 days last month, which shows a slowing in the market.  
  7. FHA sales were 17.5% of all sales last month.
  8. Only 1.6% of sales last month were bank-owned & 0.9% were short sales.
  9. The avg price per sq ft was about $225, which decreased 2% last month (8.4% higher than last year).
  10. The avg sales price decreased 2.5% last month and is 9.1% higher than last year.
  11. Cash sales were 14% of all sales last month.

PLACER COUNTY (more graphs & stats here):

Placer County Stats

  1. The median price is $450,000 and decreased slightly last month.
  2. The median price is 6.1% higher than the same time last year.
  3. Sales volume in December was 3.6% lower than 2016. There were 450 single family detached sales.
  4. It took an average of 48 days to sell a home last month (one year ago it was taking 1 less day to sell).
  5. The median days on market last month was 28 days, which means properties are selling really quickly.
  6. The median days on market increased 9 days last month (don’t read too much into that). 
  7. FHA sales were 12.6% of all sales.
  8. There were only 4 bank-owned sales last month and only 7 short sales.
  9. The avg price per sq ft was $228, which softened about 3% last month (5.7% higher than last year).
  10. The avg sales price is currently $510,174. This is 8% higher than last year.
  11. Cash sales were 14.9% of all sales last month.

DOWNLOAD 75 graphs HERE: Please download all graphs in this post and more here as a zip file (includes a stat sheet too). See my sharing policy for 5 ways to share (please don’t copy verbatim).

Questions: What are you seeing out there in the market? Anything I missed? 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: appraisals, average price per sq ft, average sales price, bank-owned sales, graphs of Sacramento market, Greater Sacramento appraisal blog, House Appraisal, housing inventory, increase in prices, Market Trends, Median Price, new year in 2018, recap of 2017 real estate market, rising prices, sacramento appraisers, shortage of housing, soft fall market

Speaking fluently in real estate cliches

November 11, 2015 By Ryan Lundquist 4 Comments

It’s easy to get stuck in a rut of speaking fluently in real estate clichés. While there’s maybe nothing wrong with saying, “The market is ‘on fire'”, or “It’s a good time to buy and sell,” there has to be more depth we can tap into, right? It’s almost like if I asked someone how they were doing, and the person said, “I’m on fire at work” or “It’s a good time to be alive.” Okay, that’s great to hear, but what does that really mean? I want to catch specifics because it’s in the details where I can really know a person. The same is true in real estate. When we step away from vague clichés and begin to speak fluently in current market trends, it can be very powerful. Whether you’re an agent, appraiser, or home owner, I hope you can glean something from this post as you tell the story of the market to clients and contacts, and I’d love to hear your take in the comments below. If you’re not in the Sacramento market, how would you describe your area? Are trends unfolding in similar ways?

CHALLENGE: Share one talking point below with a client or contact today (or include a point in conversation on Facebook).

real estate market cliches - by sacramento appraisal blog - image purchased and used with permission from 123rf dot com

Two ways to read THE BIG MONTHLY POST:

  1. Scan the talking points and graphs quickly.
  2. Grab a cup of coffee and spend a few minutes digesting what is here.

DOWNLOAD 62 graphs HERE (zip file): Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

One Paragraph to Describe the Sacramento Market: The latest stats show a couple of things: 1) The market is slowing down as it almost always does during the fall (no surprise there); yet 2) The market is definitely not as slow as it was last year at the same time. For instance, last month in the region it took one day longer to sell a home than the previous month, which shows the market is cooling, but it’s actually taking ONE WEEK LESS to sell a home this year compared to last year. There is roughly two months of housing inventory in the Sacramento region, which essentially means there are only two months worth of houses for sale on the market. This is very low considering last year inventory was at 2.65 months at the same time. This might not seem like a big difference, but the market is actually VERY sensitive to increases in inventory, which is one of the reasons why the market last year felt much slower (and even sluggish) compared to this year. Many times we hear 5 months of inventory is normal, but keep in mind values have declined any time inventory even approached 4 months in Sacramento County over the past 15 years. Anyway, despite inventory being low right now, buyers are not pulling the trigger unless the price is right. In short, Sellers, if you want your property to sit on the market, overprice it. In terms of values, the overall median price in Sacramento County has been about the same for 6 months and the regional market has softened by 2% in recent months. By the way, if you missed my recent post, I gave some perspective on “real estate bubble” conversations, and it’s a very relevant conversation as we see price metrics begin to soften at this time of year (and people freak out about that).

Sacramento County Market Trends for October 2015:

  1. The median price has been hovering around $290,000 for 6 months in a row.
  2. It took an average of 38 days to sell a house last month (up 2 days from the previous month).
  3. Last year at this time it was taking an average of 45 days to sell a house.
  4. FHA sales were 28.5% of all sales last month.
  5. Sales volume is 9.8% higher so far in 2015 compared to last year.
  6. Sales volume was 7.8% higher in Oct 2015 compared to Oct 2014.
  7. There is a 1.78 month supply of homes for sale (similar to previous month).
  8. Housing inventory is nearly 28% lower right now compared to Oct 2014.
  9. The average price per sq ft is 186.5 (7.1% higher than last October).
  10. Cash sales were only 15.5% of all sales last month (18.5% last year at the same time).

NOTE: The graph below shows an increase in the average price last month, but keep in mind the median price and average price per sq ft were flat (this reminds us to not isolate one metric and make it all about that one point).

price metrics since 2014 in sacramento county

inventory - October 2015 - by home appraiser blog

seasonal market in sacramento county median price

seasonal market in sacramento county sales volume 2

seasonal market in sacramento county inventory 2

CDOM in Sacramento County - by Sacramento Appraisal Blog

layers of the market sacramento county since 2011 - by sacramento appraisal blog

Sacramento Regional Trends for October 2015 (Sac, Placer, Yolo, El Dorado):

  1. It took 7 less days to sell a house this Oct compared to Oct 2014.
  2. Sales volume was up 5.5% in Oct 2015 compared to Oct 2014.
  3. Sales volume for the year is up 10.3% compared with 2014.
  4. The median price at $326,000 is up 6.8% from last year, but down 2% from the past few months.
  5. It took an average of 42 days to sell a house last month (1 day longer than last month).
  6. FHA sales were 24.5% of all sales in the region last month.
  7. There is 2.06 months of housing inventory (same for past 3 months).
  8. The average sales price is $364,829 (7.7% higher than last year, but down slightly from $370K a few months ago).
  9. FHA sales volume has increased by 30% in 2015 compared with 2014.
  10. Housing inventory is nearly 22% lower right now compared to Oct 2014.

sales volume 2015 vs 2014 in sacramento placer yolo el dorado county

prices in sacramento region - FHA and conventional - by appraiser blog

months of housing inventory in region by sacramento appraisal blog

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

median price and inventory in sacramento regional market

number of listings in sacramento regional market

Placer County Market Trends for October 2015:

  1. Sales volume was the same in October 2015 compared to October 2014.
  2. Sales volume for the year is up 14% compared with 2014.
  3. The median price in Placer County is $397,500 (it’s been fluctuating up and down between $390-400K over the past 6 months).
  4. Cash sales were 16.8% of all sales last month (very normal level).
  5. It took 47 days on average to sell a house last month (1 day longer than the previous month month).
  6. Last year at this time it took 7 days longer to sell a house.
  7. FHA sales were 18.6% of all sales in Placer County last month.
  8. There is 2.26 months of housing inventory (18% lower than last year).
  9. The average price per sq ft is 201 (3.6% higher than last year at the same time).
  10. REOs were 2.4% of all sales and short sales were 3.6% of all sales.

Placer County sales volume 2 - by sacramento appraisal blog

number of listings in PLACER county - October 2015

months of housing inventory in placer county by sacramento appraisal blog

days on market in placer county by sacramento appraisal blog

Placer County price and inventory - by sacramento appraisal blog

interest rates inventory median price in placer county by sacramento appraisal blog

I hope this was helpful. Thank you so much for being here.

Quick Pricing Advice:

  1. Remember the market isn’t as soft this year as it was during the same time last year, but we are still seeing values cool during the fall.
  2. Talk about the difference between actives, pendings, and neighborhood sales on your listing appointments and in your appraisals. If listings are selling for less than sales from the Spring market, that shows us the market has changed (and we need to price accordingly). See How to use a CMA to gauge the temperature of the market for a fantastic way to quickly explain what the market is doing to your clients.
  3. The market has been very price sensitive all year, which means buyers are not biting on overpriced listings despite inventory and interest rates being relatively low.
  4. Remember there are many markets within a market, so price according to the neighborhood market rather than county-wide trends since your neighborhood might be more or less aggressive compared to the entire county.

DOWNLOAD 62 graphs HERE (zip file): Please download all graphs in this post (and more) here as a zip file (or send me an email). Use them for study, for your newsletter, or some on your blog. See my sharing policy for 5 ways to share (please don’t copy verbatim). Thanks.

Questions: How does the market feel to you this year compared to last year? 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.

Share:

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Filed Under: Market Trends Tagged With: appraisers in Sacramento, average price per sq ft, average sales price, Home Appraiser, House Appraiser, housing inventory, market trends in Sacramento, Median Price, Placer County real estate, price sensitive market, regional real estate market, Sacramento County Real Estate, sacramento regional real estate, soft fall market, softening fall market, trend graphs

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