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Three ways the pandemic has affected buyers

September 14, 2020 By Ryan Lundquist 15 Comments

How has the pandemic affected buyers? Today I want to share a few fascinating shifts concerning home size, pools, and migration. If you’re local, have you been seeing this? If you’re not local, what’s happening in your area?

1) BUYERS WANT LARGER HOMES

If you’ve been cooped up for months it makes sense that you’re going to want a larger home, and that’s exactly what the stats show in the Sacramento region. Do you see that spike in home size on the right side of the graph over the past three months? For the first time ever the average monthly home size was over 2,000 square feet in the Sacramento region too (two months in a row).

The Takeaway: Be in tune with shifting buyer expectations so you price it right since larger homes may be more marketable right now.

2) POOLS ARE MORE POPULAR

Lots of buyers want a home with a pool. After all, if you’re going to quarantine somewhere you might as well have the ultimate backyard. Home sales with built-in pools are up 4.2% this year in the Sacramento region so far. This is something we could have guessed, but it’s good to see what the stats actually say rather than going with what we feel might be true.

The Takeaway: Homes with pools are in high demand. They are more marketable and they may be more valuable too.

3) FLOCKING TO PLACER & EL DORADO COUNTY

This is where it gets interesting, so bear with me. Noticeably larger homes have shown up in sales stats from June to August this year, but a big part of that comes down to buyers focusing more heavily on Placer County & El Dorado County. In fact, over the past three months compared to last year Placer County sales volume is up 16.8% and El Dorado County volume is up 31.5%. Why does this matter? If you didn’t know, monthly sales in these two counties are routinely 400+ square feet larger in size than Sacramento County (mostly due to having newer homes through the years that were built larger). This data does NOT include brand new homes currently being sold from builders – only MLS sales. Anyway, when we consider why the home size in the region has jumped so much lately, a huge reason looks to be buyers flocking to these two counties in search of more space.

The Takeaway: When we consider large price gains lately it’s important to recognize some of the hefty gains are because larger homes have been sold.

I put some of this post in a video in case that’s easier to digest. Enjoy.

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

Questions: In what ways have you seen buyers and sellers change because of the pandemic? I’d love to hear your take.

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Filed Under: Market Trends Tagged With: Appraisal, appraisal blog in sacramento region, Appraiser, Bay Area buyers, built-in pool, buyer demand, buyers want pools, El Dorado County, graphs, Greater Sacramento Regionalal Appraisal Blog, Home Appraiser, House Appraisal, larger homes, migration to Sacramento, Placer County, quarantining in real estate, Sacramento Home Appraisal, stats, trends

More conversation fodder for Sacramento real estate

April 24, 2014 By Ryan Lundquist Leave a Comment

Today I have some more fodder to share for the next time you’re talking about local real estate. Check out the images below and you’ll be able to answer: What usually happens to sales volume in April and May in Sacramento County? What role are interest rates and inventory playing in the market right now? You can scan the images briefly or take a few minutes to read the text too. Any insight or questions? I’d love to hear your take in the comments below.

April Sales in Sacramento County - by sacramento appraiser blog

Monthly Sales: Here are all monthly sales in Sacramento County since 2001. The dark lines are the month of April.

April Sales in Sacramento County 2 - by sacramento appraiser blog

March vs. April: Here is a bit of a closer look. What happens with sales volume from March to April? What happens after the month of April?

change in sales volume from march to april - by sacramento appraisal blog

Change in Volume: There really isn’t a definitive pattern other than to say sales volume in April is usually about 5-10% more or less than what it was in the month of March. This time around it looks like there is going to be an increase in volume from last month to this month. On the other hand, sales volume almost always increases from April to May, so we can likely expect more sales in the next bit of time so long as the market behaves “normally”. Ultimately, sales volume is ALWAYS higher in March through May than the beginning of the year, which shows the consistency and reality of the Spring seasonal market.

median price and inventory - by sacramento appraiser blog

Median Price & Inventory: Can you see how over time lower inventory tends to lead to increases in value whereas higher inventory tends to cause a cooling or declines? The same holds true for interest rates as you can see below. Right now inventory is around 2.0 months, which means there are about two months worth of houses listed for sale on the market. Keep in mind there were about 2400 listings at the beginning of this month and roughly 1200 sales last month. We get 2.0 months by dividing the number of listings by last month’s sales (2400 divided by 1200 = 2).

real estate trends in sacramento county 2 - by sacramento appraiser blog

real estate trends in sacramento county with unemployment 2 - by sacramento appraiser blog

real estate trends in sacramento county with unemployment - by sacramento appraiser blog

Seeing the Layers: I call these my busy graphs because there is so much going on – especially in the last one. This is how real estate works though. There are many different “layers of the market” that influence value at any given time. It’s never just about supply and demand. There is always more to the story.

Questions: How do these graphs strike you? Any thoughts or insight?

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Filed Under: Market Trends Tagged With: Appraisal, appraisers in Sacramento, graphs of market, interest rates, inventory, Median Price, month of April in real estate, Real Estate Market, Sacramento Real Estate, trend graphs, trends

Kissing the real estate honeymoon goodbye

January 8, 2014 By Ryan Lundquist 11 Comments

honeymoon in real estateThe honeymoon is over. That’s right. The real estate market in 2013 felt like a honeymoon because it was full of glittery optimism, sensational news headlines and the sweet aroma of a quick recovery. Just as a honeymoon in real life comes to an end, we all knew such rapid appreciation was not sustainable, inventory could not be that low forever and interest rates wouldn’t endlessly hover at historically low levels either. Of course this doesn’t mean the market is not still ripe for positive growth, but only that this year probably won’t feel as good as last year.

The Sacramento real estate market in 2013 was really driven in large part by massive amounts of cash buyers, abnormally low inventory and ridiculously low interest rates. Now that housing inventory and interest rates are beginning to increase, and investors are backing off, I expect the market in 2014 will be much slower and more sensitive to the local economy (so long as these trends persist and the government does not interfere).

Trends in 30 seconds or 3 minutes: Let’s take a look at some trends to get a visual picture of where we have been. You can probably scan these in 30 seconds or take a few minutes to digest them. Your call. Sacramento market trends - graph by Sacramento real estate appraiserHousing inventory decreased last month below 2 months of supply, which is understandable in light of the holidays and colder weather. Otherwise inventory has been flirting with 2.5 months. I said above that the real estate “honeymoon” is over, but keep in mind inventory is still very low, which means there is still room for some growth ahead (though I do not believe we will see the same rapid appreciation like we did last year since the market is different this time around in terms of inventory, interest rates and cash investors). The median price in December saw a slight uptick from November, but overall is still hovering around the $250,000 range as it has been for about six months. Can you see why people are saying the market is flat?Sacramento market trends - graph by Sacramento home appraiserHere is a broader picture of median price and inventory. Current values are tending to resemble values in both 2003 and 2007/2008.

Sacramento market trends numbe rof houses sold since 2008 - graph by Sacramento home appraiserSales were sparse for the second month in a row as there were only 1217 single family detached sales in Sacramento County in December. It is normal in colder months to see less sales.

Sacramento market trends unemployment and median price - graph by Sacramento home appraiser

Sacramento market trends unemployment and median price since 2008 - graph by Sacramento home appraiserThe jobless rate is thankfully going down in Sacramento County, but 8.1% is still not a pretty statistic. Can I be a resounding gong by saying we need more JOBS, JOBS & JOBS?

sacramento real estate trends - by sacramento home appraiser - 3

Here are a few important metrics on one graph. I’ll share some different versions of this graph in coming days. I like this one because it’s a reminder of how the market works. Real estate is not just about supply and demand, but a whole host of layers working together.

Cash Sales in Sacramento County - graph by Sacramento home appraiser

Cash FHA Sales in Sacramento County - graph by Sacramento home appraiser

Cash & FHA Sales under 200K in Sacramento County - graph by Sacramento home appraiser

Overall cash sales have continued to decline while FHA sales have increased. In fact, there are now more FHA sales than cash sales in Sacramento County, which hasn’t happened in almost two years. At this time last year there were multiple offers on every single property, but these days that is becoming less common. The market is ultimately normalizing as inventory increases, which is leading to buyers generally having more power to negotiate. It is still a Seller’s market, but buyers are gaining ground.

Foreclosures and Short Sales in Sacramento County - graph by Sacramento house appraiser

Foreclosures have basically hit the bottom and short sales have persisted to decline too. There has been a 1% increase in foreclosures over the past quarter. At the same time it’s also important to realize inventory and the number of sales have been really low (which can skew stats).

The Final Word: The glorious “honeymoon” of 2013 may be over, but most analysts are still projecting mild appreciation in 2014. Moreover, the Sacramento market is still in a place where there is pent-up demand, so there is still room for growth. All indicators point toward a less-rapid market this year since the fundamentals seem to be poised to deliver just that. However, anything can happen. If inventory was still at one month or dropped that low again, this would be a different post. On a related note, I still think what Blackstone and other investors do is an X-factor. If they decide to ramp up their efforts and buy a few thousand local properties again, we should get ready for a second “honeymoon” in 2014.

Question: Any thoughts, insight or stories to share? I’d love to hear your take.

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Filed Under: Market Trends Tagged With: 2013 real estate market, 2014 real estate market, cash investors, Home Appraiser, House Appraiser, investors in Sacramento, Median Price, real estate graphs, Sacramento Real Estate Market, trends, Unemployment

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