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08 Jan

Sacramento County Investment Property Inventory Round Up

Posted January 8th, 2007 | View Comments

Let’s take a quick look at the inventory numbers for residential income property and see how different types stack up, and also how the inventory compares to straight residential property. Before I even open up MLS, here’s my prediction: Multi-unit residential income properties will have higher inventory, except perhaps in the 5 units and more categeory, than either single family homes or condos.

It’s nice to set yourself up as a straw man. Let’s see if I’m right. I’ll use average sales data for the past 12 months as a baseline, and compare it to current actives. This will be for Sacramento County, based on current MLS numbers as of today:

Property Type Average Sold Units
Per Month
(Last 12 Months)		 Units
Available Now		 Inventory
(In Months)
Single Family Home 1128.0 6635 5.9
Condo 87.2 704 8.1
Halfplex 28.4 183 6.4
Duplex 34.7 355 10.2
Triplex 1.8 23 12.5
Fourplex 5.6 74 13.3
5-units and more 2.5 55 22.0

OK, well, I was almost right, except I got the 5-unit plus category wrong. Sure enough, residential income property’s inventory rises linearly with the number of units, and the 5-unit plus category is not an exception to that rule. Don’t ask me why I thought it would be — I’ve seen similar numbers before but I guess I naively assumed that apartment complex investors would have adjusted their prices by now to make things happen.

This study confirms the idea I’ve heard taught before that single family homes are in a sense the most “liquid”, being the easiest of all categories to sell in any market. I also suspect that a large part of what’s making up the inventory are investor-dumped properties, as a result of which the investment property categories are faring the worse.

What’s nice to see are the low numbers for halfplexes. I suspect that the low cost of entry for these homes coupled with the absence of the HOA fees that one pays in a condo, together with the small supply overall, accounts for the fact that the inventory numbers here are almost as low as they are for single family homes.

  • http://bawldguy.com/ Jeff Brown

    Almost 40 years in the biz and I’ve never ev er heard of a halfplex.

  • http://www.sacramento-home.com/real-estate-agents/ John Lockwood

    You haven’t been working in Sacramento, where that’s the word for a half of a duplex where the duplex dividing wall is a firewall and the whole thing has been split into two separate taxable / saleable parcels, each of which individually is known as a halfplex.

    I think it’s a Sacramento-ism for what’s essentially an abbreviation for “half of a duplex”. When I googled it the first few hits were from Sacramento ads and so forth.

    Also I bet that if you’re not from Rhode Island, you’ve been drinking water all your life and may not know what a bubbler is. I only know because that’s where I’m from — you likely know them as water fountains.

    Now what’s really cool is if you have a bubbler in your halfplex.

    You’ve given me a new lifetime goal. :)

  • future halfplex owner

    well as a duplex owner in sac, I recently learned the word ‘halfplex’ as I am in the processing of creating 2…if anyone knows of a contractor to assist with the firewall to create the so-called halfplex, please pass along.

  • http://www.sacramento-home.com/real-estate-agents/ John Lockwood

    Thanks for your comments. Readers?…

  • Dennis

    To future halfplex owner… besides installing a firewall,
    what else do you have to do in Sacramento?

  • http://www.sacramento-home.com/real-estate-agents/ John Lockwood

    Dennis,

    If he doesn’t get back to you, I would try calling county planning first with the address you’re working on and go from there.

    John

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