Demand for homes in Sacramento County has finally slowed somewhat for the first time in the last seven months, but even though fewer homes sold in August (1,929 units) than July (2,153 units), August’s sales volume figure in Sacramento County was still up a respectable 82.6% over last August’s sales volume of 1,056 units.

In contrast, the average county-wide price per square foot figure was down substantially (32.4%) from last year’s figure of $208.32, but at $140.84, it was up a few pennies from July’s number of $140.48.

Foreclosure Sales Slowed in August

The main thing accounting for both changes in August was primarily a slight slow-down in the number of foreclosure purchases.  Non-distressed sales were even at 478 units each month, while Short Sales were up only slightly, from 176 sales in July to 183 in August.  Foreclosure sales, in contrast, fell 15.5% from July to August, with 1499 foreclosures selling in July versus only 1267 in August.  Even so, the number of bank owned foreclosures that sold in August was still higher than the average of the last six months (1183 per month), and using 1183 as the absorption rate, there are only two months worth of foreclosures in inventory. 

Inventory Down From Last Year

If all the short sales went to foreclosure, current short sales would make up another 3.2 months of inventory.  Another way to say this is that we have about 5.2 months of “distressed sales” in inventory, which is just about how many non-distressed sales we have in inventory as well.  Although there’s a chance that this number will increase seasonally as we get into fall and Winter, it’s good to see it so low right now. Overall for all categories there are 4.8 months of inventory if you use the last six months absorption rate, otherwise 6.4 months.

We don’t have an exact one-year-ago-today figure, but to give you an idea what good news this is, by contrast, in our early August market update report in 2007, thirteen months ago, we reported that there were 10.7 months of inventory — so currently Sacramento County is looking at roughly half that number today.

Prices Down From Last Year — A Typical Payment on a Median Priced Home drops about $600

The average home that sold in Sacramento County this August fetched $235,367, down 33.1% from last year’s average price of $348,698.  The median sale price was down 33%, from $313,500 in August of 2007 to $210,000 in August of 2008. 

Assuming you got an FHA loan with 3.5% down, and a .5% monthly mortgage insurance premium at 6.45% (roughly the same both years depending on which week you look at), your estimated mortgage payment (PITI) for a median priced home if you bought last year would have been $1,953, while this year the payment on a median priced home would be approximately $1,318.50.  No wonder demand is up from last year!

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