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06 Feb

Sacramento County Real Estate Market

Posted February 6th, 2006 | View Comments

January’s residential sales in Sacramento County overall were down significantly from January a year ago. 951 residential units sold in January of 2006, versus 1,446 in January of 2005, a 34.2% reduction. Meantime, the expired to sold ratio has grown from 10.1% to 93.1% during that period, and average days on market have grown from 32 days to 49 days.

The average home that sold in January in Sacramento County listed for $400,460 and sold for $393,818, or 98.3% of list price. The median sale price was $357,500, up 9.5% from a year ago, while the average cost per square foot appreciated 9.9% from January to January.

Currently, there is just over seven months of inventory available county-wide.

Sacramento County Real Estate Market Expired Listings

  • Dan

    Thanks for your interesting posts! I’m not too knowledgeable in this area – if you have a chance, can you please explain to me how when we hear about “days on market”, and “months of inventory”, why those two numbers can be so different?

    For example, if days on market is 49 right now, doesn’t that mean the average house will sell in a month and a half? So why is inventory so high at 7 months?

    Thanks!

    Dan

  • John Lockwood

    Dan,

    Thanks for the kind words and an excellent question.

    Well, a few things conspire to make the inventory so high. First, when we quote average days on market for sold houses, bear in mind that that’s the average of those houses that were actually successfully sold. But inventory builds up because of the houses that don’t succesfully sell. So right now, for instance, the average days on market for all available homes in Sacramento County is higher than 49, it’s 54. If we look at the listings that expired in January, the average days on market was 87 (listings are often, but not always, taken for ninety days).

    Another factor that messes up the numbers is that when a listing expires, the seller may wait awhile to relist, either out of frustration or in order to get a “fresh” MLS ID. Getting a new listing number is a way of making the listing look new and is a common technique to avoid having a house appear “shop worn”. From the point of view of our numbers, however, it means that a home that’s showing 50 days on the market may really have been listed for 140 days, for example.

    The total inventory at any given time consists of homes that are being newly listed, as well as homes that have been on the market awhile and are about to expire, and homes that may have been listed several times. Of course, even in a hot buyers market there are always a few homes listed too high that don’t sell, and it takes awhile for buyers to get out and see the homes. So even then, inventory and days on market don’t typically make it down to zero on average. But really all you need for high inventory is a slight tilt toward increased supply or decreased demand operating over several months.

    Thanks again for a great question!

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