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01 Feb

Sacramento Real Estate Market – January, 2007

Posted February 1st, 2007 | View Comments

The numbers are in, and sure enough, it’s another “red ink” month for Sacramento County real estate, at least from a seller’s perspective. Prices were down slightly on paper, but my favorite indicator, price per square foot, was down more dramatically. Interestingly, all this was happening at a time when my web site traffic is easily the best it’s been in twelve months, so I have a feeling that home buyers are getting very interested in the bargains that this downswing is creating. (The other hypothesis, that more and more ladies have been falling in love with my picture as time goes by, is probably not even worth entertaining.)

This January’s average Sacramento County home was 1698 square feet, and sold for $348,000, down 3.7% from last year’s average of $392,363. However, since this year’s home was 6.2% bigger than last year’s average of 1599 square feet, the net effect was to drop the price per square foot some 9.3%. Those numbers were $245.38 in January of 2006, versus $222.47 in January of 2007.

Also as predicted, unit volume was down, from a total of 1010 units sold in January of 2006 to 730 units sold in January of 2007, a 27.7% drop. Because the number of expireds rose eight per cent during the same period, the effect on the expired to sold ratio was to push it over 100%. This ratio, which is simply the number of listings that sold in a given month divided by the number that expired, was 88.1% in 2006 and 131.6% in 2007.

Sellers, what that means is that your home is more likely to not sell in it’s listing period (often 90 to 180 days, though it’s not fixed by law), than it is to sell. In a future article, we’ll take a look at how well / poorly priced those expired listings were versus the ones that sold.

Naturally, in such a market, average days on market even for homes that did sell has increased, from 49 in 01/2006 to 72 in 01/2007.

  • Sippn

    John, are the sales # for January closings or new pendings? If closings, how is the pending indicators. Feels like things are picking up.

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

    Those are closed escrows. I haven’t checked pendings but it’s certainly a fair question. If I look into it in the next few days I’ll post it. My sense is that it’s going to be a good busy spring based on what I’ve seen so far — January was the best traffic month in the last thirteen months, but that could just be that people are catching on to how charming I am. :)

  • John

    I have another theory as to why the traffic on your site increased and it has to due with the Sacramento Area Flippers in Trouble website. I believe it was early in January when the Sac Bee did an article on the website. It just so happens that your site is linked to their site through other sites like Sacramento Landing. I would never have known about your site except for these two other sites. What is more, I have no interest in buying a home right now. I just enjoy reading about the pain and suffering of the local Real Estate Industry.

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

    Nice try, John, but my web logs tell a different story. In December I had 1298 visitors per day, and 1329 searches for “Sacramento Real Estate” over the whole month. In January I had 1668 visitors per day (a 28.5% increase), but 2311 searches for “Sacramento Real Estate” (a 73.9% increase). So clearly, the increase in my traffic is low compared to the increased search activity for real estate related keywords, and interestingly the 28.5/73.9 ratio is very close to the 40% retention rate that I’ve seen in other analyses of the traffic.

    That’s great that you have no interest in buying a home right now. I have no interest in selling you one. You enjoy reading about the pain and suffering of others, do you? Let’s see, can we match that to a dictionary definition by any chance? Yep. Perfect fit. Not only is such a person not an ideal client, they’re not even a workable prospect under any conceivable circumstances.

  • Ed S

    I was looking for info on the Sac RE market as my son has some property there, when I saw John’s letter and your comment about ‘sadism’. Sadism is inflicting pain. What John has has no word in english, but the German’s do, it is ‘schadenfreude’, enjoying the misfortune of others.
    Ed

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

    Right you are, Ed. I’ve used that word in this context before. Those Germans get all the good words!

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