I was just looking at some (MLS) numbers for condos in Sacramento County for June, and two things stand out (at least to me). The first is that they’re not as bad as I had expected they would be based on some earlier number crunching I’ve done. That’s not to say they’re great, mind you, just that they don’t quite disappoint as badly as expected. The second point is that on the appreciatoin side, the numbers are a mixed bag at best.
Bears will be happy to see a 3.4% decline in the median sale price, of course. The median this June was $231,000, down from last June’s $239,250. But at the same time, the average sold price was up 6.1%, to $263,185 this June. And my favorite number (for statistical purposes, anyway) — list price per square foot — was up 6.8%.
OK, now — ready for the bad news? Days on market up 154%, from 22 last year to 56 this. Unit volume down almost 50%, from 184 last June to 94 this June, coupled with a large increase in expireds, leave us with an expired to sold ratio of 63.8% (60 expireds over 94 solds). Inventory is at 9.1 months.
Interesting times are coming up, too, in that the market started to slow down about one year ago — oh, right about now or thereabouts. So in the months ahead, I’d expect to see less dramatic sorts of “slow-down” numbers (because we’re comparing to an already-cooled market).
Let’s see how it works out.
I am very pleased to announce the formation of a brand new California Corporation, John Lockwood Associates, named after me, Melvin Q. Associates.
No wait, that should read, named after me, John Lockwood.
I hate these identity crises.
As an independent broker, I’m planning to continue to work with a select group of buyers myself, to the extent I have time with the recent success of my other business, John Lockwood Asscociates, the software company. (Actually one might quip that that business is doing less well, inasmuch as over there I’m having to work W2 — but ask me about cash flow in January if you have any doubts).
More importantly, I still have the same great referral network of agents both right in the heart of Sacramento and in surrounding areas, and they’re doing a terrific job of helping me to help the clients who email in for information or who are ready to make a purchase or list their home now. The neat thing is that all of them are so committed to getting back to folks right away with answers to their questions. I’m hoping to have some software to improve that even further in the future, but that effort has to share time with blogging, site updates, etc.
The real estate market for El Dorado County in June is similar in broad outlines to the market for Sacramento County, with a few noteworthy differences.
First, the similarities: In both markets, buyers got themselves a slightly larger house this June, on average. This year’s average in El Dorado County was 2199 square feet, as opposed to last year’s 2128 square foot average. In Sacramento, the averages are 1681 square feet for this year, and 1605 square feet for last year.
In both markets, however, the average cost per square feet is down. The drop was .8% in Sacramenty County, and .9% in El Dorado County. El Dorado County’s inventory is also high, at about 8.8 months.
Unit volume was down by a less alarming amount (27.9%) than Sacramento’s (51.7%). 199 homes sold in El Dorado County in June, as opposed to 276 in June of last year.
The average home sold in El Dorado County in June for $552,513, or 97% of the average list price of $568,800. The median sale price was $519,000, up 8.2% from last year. Days on market increased from an average of 35 days last year to an average of 62 this year.
San Diego Broker Associate Kris Berg was good enough to give me one of the fifteen minutes of fame that Andy Warhol says I get. Kris and her husband are leading the charge on the San Diego Home Blog, and were kind enough to come over here and read some of my analysis of the expired listings in this market. Kris also took the analysis a step further to look at cancelled listings — I’ll have to try that back here sometime.
Kris, thanks for stopping by and the link! Cheers.
June’s real estate market in Sacramento county has shown considerable slowing from last year, with a slight depreciation in home values. 1216 residential units sold through the MLS in June, down 51.7% from last year. Meantime, the number of expireds was up 391%, from 188 last June to 923 this June. Together, these two figures gave us a tenfold increase in the expired to sold ratio, from 7.5% last June to 75.9% this June. Inventory is currently at 8.4 months.
The average home sold for $415,145 this June, or 98% of the average list price of $421,818. The median sale price was $369,000.
The average sold price was up 3.9% from last year, a figure somewhat deceiving inasmuch as the average square footage appreciated by 4.7%. On a sold price per square foot basis, this year’s average is a .8% drop from last year. The median sale price is down .3% (last year’s median was $370,000).
“Come to me where I sleep.” That’s our bow to Fairport convention fans, but it’s an appropriate title, given that the Sacramento Bee recently ran an article based on PMI predictions of doom and gloom for the Sacramento market. PMI is an insurance company offering (as my may have guessed), PMI, or Principle Mortgage Insurance, so if the market goes south they in pay more claims — at least in principle (sorry, couldn’t resist).
As usual, I’m agnostic on the issue of exactly where the market will end up. It’s not that I begrudge my neighbors in the blogosphere their alleged CrystalBall-o-Vision. I just don’t care to join them in that illusion, at least not systematically.
The other distasteful tidbit in the news was that the Fed just hiked the federal funds rate for the seventeenth time in a row.
There was a debate here some time ago wherein I took the position that interest would rise faster than prices fall. With the thirty year fixed now at an average of 6.78 percent with half a point — can you say, “over seven” — I stand by my remarks then.
At the same time, I do suppose we’ll start seeing year on year depreciation in the next batch of “the numbers”, or soon. I believe that prices would drop more slowly, I don’t think they won’t drop at all.
Meantime, those who want or need to move will do so, as they always do.
In response to our Buyer’s Market Tale, one reader had the following question, posted with permission:
Can you explain how a first time buyer can afford such a large mortgage? - John A Buyers Market Tale Original starting price of home three months ago: $565,000. List price after buyer reduced price: $489,500. Offered price: $474,000.
As I mentioned in the article, I changed the numbers for the sake of confidentiality. The actual numbers are lower. Plus, he has a good job, and did 95% financing. By the way, up to 100% is available — there are lots of new programs out there you might be interested in like a new CalHFA product and others.
Other first time buyers focus on something more readily affordable than the real numbers in this case, to be sure. I have a listing coming up in Rosemont for about $320,000 that will be ideal for such a buyer — or there are many condos available in decent areas for under $200,000.
