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10 Apr

Sacramento County Real Estate – Market Update

Posted April 10th, 2006 | View Comments

We had a pretty fun time talking about the rally in home prices in Sacramento County in March. This post digs a little deeper into the numbers.

The average home sold through the MLS in Sacramento County in March of 2006 listed for $404,280 and sold for 98.7% of list, at $399,025. The median sale price was $365,000. Homes appreciated by the following amounts, from last year.

  • Average sale price: 9.6%
  • Average sold price per square foot: 3.7%
  • Median sale price: 7.7%

I usually go for sold price per square foot, but in this case it gives the most pessimistic result.

Days on market are almost doubled, from an average of 26 last year to an average of 50 this year. Meantime, units sold are down considerably from 2255 last year to 1322 this year, a 41.4% decrease. Inventory is currently at 5.6 months.

A year ago, the number of listings that expired (taken as a total of all those that either expired or sold), was five percent. A few months ago it had deteriorated to something very close to 50/50. We’ve regained some of that back now, so that the expireds are 35% of the total, and solds are 65%.

  • http://www.realblogging.com Don

    Go check out the strong debate underway at http://www.realblogging.com regarding the bubble and whether agents are to blame. With you all experience and stats you should participate in the discussion.

  • John Lockwood

    Thanks for the note, Don.

    Anyone who thinks there’s a debate about that issue has never had the joy of trying to convince a seller that the home he listed for $469,000 really is only worth $339,000.

    As it says in the California Association of Realtors® Statewide Buyer and Seler Advisory, “Buyer and Seller acknowledge and agree that Broker (i) Does not decide what price Buyer should pay or Seller should accept….”

  • http://www.chrisrecord.com/ Chris Record

    John, I have checked up on your blog from time to time and I like the stats that you put up about the local Sacramento Market. I am a real estate investor/business owner and I work with several investors in this market, and since the market has flattened and started declining we are all looking at pre-foreclosures, short sales, and wholesaling. Most of us are diversifying out of state and buying cashflow positive properties with built-in equity.

    As a local real estate agent, what investment strategies do you recommend for beginner investors who want to start locally in the sacramento market?

  • John Lockwood

    Hi Chris,

    Thanks for your note about the stats etc.

    It seems to me some of the strategies you’re already working are time honored, however working on foreclosures with an agent is problematic given the state laws regulating this.

    I tend to like smaller single family homes or duplexes / halfplexes in established neighborhoods as investments. For listed price, breakeven for positive cash flow in Sacramento was around 30% down last I checked — it may be a bit better now that prices have softened, or interest may have eaten that up. Of course, the whole goal of some of the strategies you’ve mentioned is to try to improve on that.

    Are you looking to do some transactions with an agent who understands the investor’s perspective? If so I have someone in mind who is an investor herself and who’s quite knowledgeable about the area — especially Sacramento itself, which offers a great variety of neighborhoods and different opportunities. Let me know by email if you’re interested and I’ll put you in touch with her.

    Thanks again for the comment.

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