Sacramento Real Estate Blog

As was true of most areas in in Sacramento County, unit sales for Citrus Heights (95610 and 95621) in April showed a considerable improvement over sales last year.  102 units sold in April, a 73% increase over last year’s volume of 59 units.  Of course, this upsurge in volume comes as a result of substantial price declines.  At $148.61, this April’s average sold price pre square foot is down 28.6% from last year’s average of $208.15.  The median price of $207,250 is down 26% from last year’s median of $280,000, and the average price has fallen 28.9%, to $208,495 in April of 2008.

Bank foreclosures accounted for 54.9% of all sales in April, while short sales accounted for only 3.9% of closed sales (even though they make up 46.5% of current inventory).  There are currently 7.4 months of inventory in Citrus Heights, with less than two months of REO inventory.  The expired to sold ratio is down to a very low 24.5%, compared to 72.9% last year.

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South Sacramento’s Franklin / Freeport area (95823) is one of the areas that’s been hardest hit by foreclosures in greater Sacramento.  In fact, it currently has the largest number of Active REOs (bank foreclosures), though in terms of sold REOs, it ranks only second, with Elk Grove’s 95758 area code coming in first place.

Those of you who read me religiously (thank, mom!) will already know what I’m about to say next.  With all those foreclosures, prices have dropped dramatically, and April unit sales figures are doing quite well indeed as buyers take advantage of the bargains. 

263 bank foreclosures are listed in 95823, accounting for 41.1% of the available inventory of 640 homes.  Short sales make up another 44.5% of active inventory.  The short sale “fake listings” accounted for only 6.1% of the sales in April (down from 11.1% last April — so much for one critic’s theory that we’ll sell more of these as we go along because they take time).  Foreclosures, on the other hand, made up 82.9% of all sales in April.

The average home in Franklin / Freeport sold for $152,628 in April, down 43% from last April’s average of $267,663.  Sold price per square foot is down 43.6% and is currently $107.03, while the median price fell has fallen 44.2%, from $269,000 in April of 2007 to $150,000 in April of 2008.

Meantime, unit volume has more than tripled, rising 203.7% from 27 units in April of 2007 to 82 units in April of 2008.  There’s still a lot of unsold inventory left to get through, however.  Based on the last year’s absorption rate there are 17.14 months in inventory, however that figure is only 7.8 months if you use April’s absorption rate.  Based on the absorption rate by category, REOs have only 3.9 months of inventory, but short sales have 57 months (almost five years).

It’s the fourth of the month, and that means that all good real estate brokers who don’t want to get fined $100 by the MLS have entered their sales data for the month of March into Metrolist.  This means we can start digging into the data for the first quarter in earnest now.

In the first quarter of 2008, 3,011 homes sold through the MLS in Sacramento County, a 4.6% increase in unit volume from the first quarter of 2007’s 2,879 units.  No doubt this reflects buyers taking advantage of the bargains that have happened as more and more foreclosed homes come on the market. 

Prices have fallen substantially over the last year.  Here’s a table that breaks the numbers down:

What’s Selling, And What’s Available

I’ll be publishing an article shortly where we analyze the data from one community, Elk Grove, in terms of how many non-distressed homes are selling versus short sales and foreclosures.  If you want to see that when it comes out, please subscribe now.

We’ll probably do a similar analysis for all of Sacramento County, but to whet your appetite and show the numbers a slightly different way, let’s show how many months of inventory there are for short sales, foreclosures, and non-distressed sales, based on the absorption rate for the last three months.

Sacramento County Real Estate Inventory By Type

Here’s a table that breaks it down, but you can read the text below to see how we got the numbers:

There are 9,661 homes in inventory (for sale) right now, and 1,004 homes sold per month for the last three months.  Overall, then, there are 9.6 months worth of inventory (i.e., 9,661 divided by 1,004).

Of course, how much inventory there is varies widely by type of sale.

3,494 non-distressed homes are currently available in Sacramento County.  (I use “non-distressed” to mean sales that are neither short sales nor bank owned foreclosures).  333 non-distressed homes per month sold in Sacramento County over the last three months.  Inventory for non-distressed sales, then, is 3,494 / 333, or 10.5 months. 

For foreclosures, which are selling like foreclosed hot cakes, the inventory numbers are much lower.  Some 605 foreclosures sold each month during the last quarter, so the 2,633 foreclosures currently available represents 4.4 months of inventory.

Short sales are just the opposite of foreclosures, because they sell like crusty old hot cakes that nobody wants to eat, because the bank may or may not approve your syrup.  Currently there are 3,535 short sales in inventory, and a whopping sixty-seven of such homes sell each month in Sacramento County.  Dividing again, we get 52.8 months of inventory.  Yes, short sale fans, that’s about 4.4 years.

February was a fairly strong month for duplex sales in Sacramento County, with twenty-five units selling, as opposed to eighteen units last February and an average of 19 units selling each month over the previous years.  As will residential properties, duplex prices have fallen sharply over the past year.  The average sale price of a duplex in Sacramento County fell 27.3% from February to February:  from $348,420 last February to $231,000 this February.  During the same period, the median sale price fell by 33.7%, from $348,420 last February to $231,000 this February.

It’s a tough time to be a duplex seller, with the duplex inventory still high at 14.6 months.  Though the median sale price of a sold duplex in February was $231,000, the median list price of the 279 duplexes in inventory is $329,000.

What’s encouraging is that we’re seeing more and more properties that pencil out fairly well.  One duplex that’s listed now, for example, yields a positive cash flow of $48.00 per month assuming a 20% down, a 10% vacancy factor and a property manager — if you managed it yourself that number would be more like $198.00 per month.  Three years ago I’d be hard pressed to find a duplex in Sacramento County that provided any kind of cash flow.  Today I found this one after about five minutes of looking — and I’m sure there are others out there.

Admittedly, the cash flow numbers for the “middle of the market” may not be too impressive.  Nevertheless, there are bargains to be had, and I believe that as prices on some duplexes and other multi-unit properties continue to fall, sales in this category will pick up throughout 2008 and beyond.

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I n our year in review article for Sacramento County, we talked about East Sacramento, Midtown and Land Park being exceptions to the general cooling-off trend of Sacramento Real Estate. Regular readers will know that I’m pretty bullish (that’s “bullish” — don’t read it fast, and there’s no “T” in it) on East Sacramento, 95819.

Of course, since this year’s home was slightly smaller (1.8%) than last year’s, average price was down slightly. The average price fell 1.7%, from $511,785 in 2006 to $503,142 in 2007. The median sale price fell 2% during that time, from $443,750 in 2006 to $435,000 in 2007.

Adjusted for square footage, however, things looked quite rosy in East Sac, especially comparing it to the whole county. Looking at the year gone by, while other areas in Sacramento lost 11.7% of their value on a sold price per square foot basis, East Sac’s prices held steady, actually gaining .1% on the sold price per square foot indicator ($350.54 per square foot for 2006 versus $350.87 for 2007).

REOs and Short Sales, which make up more than 50% of inventory county-wide, comprise just 16% of active inventory in East Sac. (7.1% REO and 8.9% short sale). Sold foreclosures in 2007 accounted for 3.1% of sales, versus about 20% on a county-wide basis.

Unit volume is down 5.6% from last year, but inventory is hot-buyers-market low at 2.64 months. Days on market are actually from last year by 24%. In 2006 it took 50 days on average to sell a home in East Sac, whereas in 2007 that number was down to only 38 days. The contrast to Sacramento County is clear: In Sacramento County, Average Days on Market rose 56.4%, from 39 in 2006 to 61 in 2007. This year, moreover, fewer listings expired, and the expired to sold ratio dropped even though unit volume was off slightly. Currently the expired to sold ratio is a low 36.1%.

Thumbs up photo by Joe Telling, licensed under Creative Commons.

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The Sacramento MLS, Metrolist, lists the name of the 95831 zip code as “Sacramento South Land Park Greenhaven”, but one look at the map, and Sacramento area residents will immediately recognize that bulge of land around that they call “the Pocket Area”.

The numbers for November show a neighborhood that’s doing relatively well for Sacramento County, with homes retaining more of their value than other areas, and much better figures for inventory and unit volume as well.

Sold price per square foot declined only 6.1% from November to November.  Last November the average Pocket Area home sold for $398,204, while this year the average home sold for $390,719, a 1.9%.  The median selling price in Sacramento’s Pocket Area in November was $365,090, down 6.9% from last year’s median price of $392,000.

The foreclosure rate in the Pocket is 13% of active inventory, while short sales account for 8.7% of active inventory — a combined rate of 21.7% is much lower than Sacramento’s overall average, which recently topped 50%.

Other numbers also show the Pocket Area’s relative strength compared to other Sacramento neighborhoods.  Inventory is only at 5.67 months, putting the Pocket Area (technically at any rate) in the “sellers’ market” category.  Unit volume dropped only 4.2% from November to November, so the Pocket was relatively immune from the November slowdown that plagued the rest of the area.  Days on market and the expired to sold ratio are both down slightly from last year — lower numbers are “better” for sellers in each case.

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In movies, 2007 was the year of the threequel.  Sensibly enough, Beyonce Knowles was the year’s most desirable woman (I’ve been saying that since 2006, at least).  Al Gore won the Nobel Peace Prize, while the arctic ice cap melted at an alarming rate.

In Sacramento real estate, I’ll remember 2007 as the year when those of us who entered the business early in the decade learned the mechanics of selling short sales and foreclosures. 2007 was the year of the foreclosure in Sacramento County. 

This chart shows the number of foreclosures sold month by month through November of 2007 in blue.  The short sales are shown in pink.

Short Sale “Time Lag”?

About a month ago, a reader responded to my post about the dismally low closing rate for short sales by remarking that my analysis failed to account for the fact that short sales take longer than foreclosures to sell.

The chart above does not show short sales lagging behind foreclosures by the 1-3 months it takes to sell them.  It shows a steady increase in the number of REOs sold.  REOs broke the 10% barrier in April, and short sales have yet to rise above 6%.  The longest short sale I’ve done took four months — sometimes we can close them in 30-60 days.  If short sales were lagging four months behind, not just failing to close, there should be at least 18% of them closing every month by now.

Another problem with this argument is this.  Yes, short sales take longer, but the short sale step also happens before the bank owns the property.  So these sales take longer, but they also start earlier, so the longer sale should be a wash, and clearly the numbers above show that it isn’t.

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Elverta is a small community of older homes on acreage (many suitable for horses) as well as some infill development, located north of Rio Linda and west of Antelope (see map).  Because not many homes change hands every month in Elverta (about three per month over the last year), we’ll look at a year’s worth of real estate data, comparing December-November 2006-2007 with the same period for 2005-2006.

The change in value from year to year in Elverta was substantial, so it’s fair to say that Elverta was one of the areas that was hit hard by the downturn in the market.  Last year the average sale price was $399,872, while this year the price was $339,769, a 15.9% drop.  At the same time, this year’s home was slightly larger, on average, so that the sold price per square foot fell 20% from year to year, from $286.42 to $219.49.  The median price last year was $315,000, versus $286,000 this year, a 9.2% drop.

The most dramatic feature of the Elverta market is the change from year to year in the number of units sold, from 69 per year to 32, a 53.6% drop.  Elverta has 18.4 months of inventory to get through, some 51% of which is either a short sale or bank owned foreclosure.

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Fair Oaks buyers this November bought a much larger home than the average buyer last year.  Last year the average home size was 1816 square feet versus this year’s 2158 square feet, an 18.8% increase.  So it makes sense that both the average price and median price went up from year to year.  In November 2006 the average sale price of a home in Fair Oaks was $418,015, a year later it has increased 9.5%, for a November average of $457,650.  The median selling price increased 13.2% during the same time, from $372,500 to $421,750.

Adjusted for square footage, however, the average home in Fair Oaks lost 7.9% of its value from year to year.  Last year’s sold price per square foot was $230.18, versus $212.07 this year.

Overall, Fair Oaks is doing better than the Sacramento County averages.  Inventory is low by county-wide standards at 6.71 months.  County-wide, the combined short sale and foreclosure inventory account for more than 50% of inventory, but in Fair Oaks, that number is 23.5% at present.

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I always enjoy writing about East Sacramento, because the numbers there are so strong month after month (see for example my earlier East Sacramento market updates).  A true maverick, it’s as though East Sacramento never got the memo about the market being bad, and decided to continue to enjoy a sellers’ market amid the most ursine predictions of doom and gloom.

To be sure, East Sacramento posted a slow November compared to last year.  Unit volume fell 27.3%, from 22 units last year to 16 units this year.  During the same period, however, sold price per square foot rose by 6.5%, from $320.32 last year to $341.15 this year.  In November, the average home sold for $463,625, down .9% from last year’s average of $467,984, while dropping 7% in size from last year.  At $415,000, the median selling price was down 5.5% from last year’s median price in East Sac of $439,000.

Along with increasing price per square foot, East Sacramento continues to enjoy other seller’s market numbers, such as low inventory.  With an average of 22 homes selling each month and 68 units available, inventory in East Sac works out to 3.14 months, well below the traditional six-month line of demarcation between a buyers’ market and a sellers’ market.  The expired to sold ratio, already low last November at 36.4%, fell to a meager 12.5% this November.

The only sprinkle of rain I’ve found on this otherwise sunny parade of good news is that short sales are up to 10.3% of active inventory.  However at a combined total of 13.2% for short sales and REOs, the number of distressed sales in East Sac still pales in comparison to the numbers for Sacramento County as a whole (over 50%).

The numbers are in for November.  As we get into what’s usually a slow time of year, unit volume is continuing to rise slowly from September and October, with 809 units selling as against October’s 803 and September’s rather bleak 709 units.  Buyers are beginning to take advantage of the bargains offered by short sales and REOs (bank foreclosures) in inventory, which collectively account for just over 50% of active listings (REOs make up 24%, while short sales comprise 26.5% of inventory).

The average home sold for $323,772 in November, down 15.2% from last November’s average of $381,666.  Average sold price per square foot is off 16.6% from a year ago, at 188.35% versus last year’s $225.97.  The median sale price in November was $293,000, down 15.1% from last November’s median of $345,000.  Unit volume is off 25.7% compared to last year, but as we mentioned earlier, is strong compared to recent months.

There are 11.21 months of unsold inventory at present in Sacramento County, down from last month’s figure of 11.61 months.

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We’ve just updated the listing database that feed the specialized areas of our web site for foreclosures, new homes, and condos.

For some time now we’ve made available the number of active foreclosures by area in Sacramento County, but one thing I didn’t like about that list is that it only gives you raw numbers of foreclosures available, so naturally this is going to tend to show more foreclosures for areas where there are just more homes. 

To give you a better idea of what the actual percentages are, I’ve put together the following table, which shows the percentages of bank-owned foreclosures in active inventory for different areas in Sacramento County.  In other words, barring any possible data import errors, this is a rough guide to the number of unsold foreclosures as a percentage of all unsold homes for these areas in Sacramento County.

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The other day we looked at the real estate market in Gold River, a popular subdivision in Rancho Cordova (95670 — see area map). 

Today we take a look at the Rancho Cordova community to the south and west, Rancho Cordova 95742 (area map of 95742).  In this article, we’ll be dealing with Rancho Cordova numbers strictly for this zip code, for October 2007 versus October 2006.

Only seven homes sold in Rancho Cordova in October, and on average, only seven homes sold per month during the last year.  Thus, the 142 units in inventory currently make up a very large number indeed in terms of unsold inventory:  20.3 months.

The average home sold in Rancho Cordova in October for $305,812, down 9.5% from last year’s average of $337,769.  With this year’s 1931 square foot home being 7.1% larger than the average last year, the average sold price per square foot dropped from $187.34 last year to $158.37 this year, a 15.5% decrease.  The median selling price in October was $305,000, down 9.9% from last year’s median of $338,331.

Of the 142 homes currently in inventory, fifteen, or 10.6%, are foreclosures. 

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Trick or treat.

As I prepare my report on Sacramento County’s real estate market for October, 2007, I recall  my happy youth watching The Flintstones.  You remember Fred and the gang.  From the town of bedrock, he’s a page right out of history.

One great cartoon gag from the the Flintstones — though surely it has roots all the way back to the Manichean cartoons of the third century — were the Fred Flintstone as devil / Fred Flintstone as angel that would sometimes perch on Fred’s shoulders, whispering instructions.

Sometimes Gazoo would whisper the instructions.

Bloggers, Find Your Voice (From Among Those You Hear in Your Head)

In my case it’s the eternal angelic optimist, Purva Brown, on one shoulder versus the pitchfork-armed bubblers on the other.

Bubbler pokes me with pitchfork:  In terms of unit volume, October was the second worst month in recorded MLS memory.   803 units sold in Sacramento County in October.

Purva flaps angel wings:   C’mon, John, that MLS data only goes back to October, 2004, so all you have to compare it to are good times.  Plus, October’s volume was an increase of  11.7% over September!  Look on the bright side, will you.

OK, you two.  Behave.  Fight it out between yourselves.  Let my shoulders be your last battleground.

The Rest of the Numbers

The median price of a home in Sacramento has fallen to $300,000 in October, down 14.3% from last October’s median of $349,900, and 24.9% from their peak of $399,499 of November, 2005.  Average sold price per square foot was approximately $189.32 in October, down 18.2% from last October’s $231.23, and down 25.5% from the peak of $254.10 (September, 2005).  (Purva:  That’s not fair, John — you keep making the houses lose 1/4 of the value by picking high peak values from different months.  What are you, some kind of bubble blogger now? ).  The average home sold for $327,719 in Sacramento County in October, down 14.9% from last year’s average of $385,233.

Recently we reported that about a quarter of the homes selling in Sacramento County were foreclosures (REOs).  The numbers have now risen to slightly more than one third.  More precisely, of the 803 units that sold in October, 285 (35.5%) were REOs.  Now you bubblers might think you could get an even 50% if you throw in the short sales, but you can’t, because only 31 short sales sold during this period, so the overall total ends up being about 39.4%.

Inventory is 11.61 months for Sacramento County overall.

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Well, it’s that time of the month again, when all the real estate bloggers race to publish the latest real estate statistics based on what happened last month.  The October numbers are still trickling in, so I’ll publish a full market report in a day or two, but meantime I thought I’d whet your appetite with a chart.

This one shows median prices for residential real estate in Sacramento County, according to MLS data. 

(Chart the chart for a larger version).

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I am pleased to announce that we are now offering you two ways to subscribe to the Sacramento Real Estate Blog (see the form at the left).

The subscription form says “Weekly” but please note that for subscriptions processed before October 15th, you may receive messages more often. We’re in a testing and roll-out mode, so we have it set to send messages more often.

For those of you who don’t want to mess around with RSS readers, or don’t know what one is, or don’t care what one is, you can now subscribe via email to get the latest Sacramento real estate news, including market updates, tutorials, the latest real estate bargains, and many new features that we’ll be rolling out in the weeks ahead.

After that, I think weekly is a good schedule. Leave me a comment and let me know if you prefer weekly, daily, monthly, what have you.

After all, we think most buyers and sellers will benefit from a more email-friendly approach, since RSS stands for “Realtors Sure Subscribe”.

“If you don’t subscribe, the terrorists win.”
– New York Mayor, Rudolph Giuliani

“Aren’t you going to laugh at my nose too?”
– Rudolph the Red Nosed Reindeer

Grizzly Flats, a mining town for gold back in 1852 is now a peaceful town at about 4000 feet above sea level (Yes, there will be snow!) and just under 800 people. If you want a place to get away from it all, Grizzly Flats might just be it. About an hour and a half drive from Sacramento - all uphill - it makes a great escape and beautiful white Christmases.

The real estate market in Grizzly Flats seems pretty resistant to a fall in prices this year, although sales have slowed. Last year 40 homes sold for a median price of $280,000. They were on the market an average of 74 days.

This year, so far only 23 homes have sold and 2 more are pending sale. But the median price has jumped from $280,000 to $297,500 - an increase of 6.25% Not bad in this market! What’s more, the average days on market went down to 60 days from last year’s 74!

There are currently 45 homes for sale between $169,000 and $550,000.

We haven’t looked at residential income properties in quite some time, but last time we did, we found that the market for residential income properties in Sacramento County was a lot slower than the market for single family homes and condos. Sure enough, that’s still the case today.

Let’s take the case of duplexes. This August, one third fewer duplexes sold than last year. (The numbers are twenty units for last year and sixteen for this year). The average duplex sold this August for $355,969, down 4.8% from last year’s average of $374,021. The median sale price dropped 11.9% during this time, from $392,500 last year to $345,750 this year.

We don’t have figures for square footages or REO information on duplexes, unfortunately, so we can’t talk about those. However, inventory and the expired to sold ratios are the twin smoking guns that point to a market that is every duplex seller’s nightmare. There are 418 units in inventory, which works out to 18.7 months of unsold inventory based on average sales of 22 units per month. However, if you take just August’s sales as a basis, you come up with 26 months of inventory. Either way you slice it, that’s a lot of unsold duplexes people are trying to move.

The expired to sold ratio also tells a story of listings just sitting there. Last August the expired to sold ratio was 204.2%, meaning that roughly two homes expired for every one sold. This year the ratio is 318.8% — fifty-one listings expired and 16 sold.

Contrast these numbers to August, 2005, when duplexes were emblematic of the hot seller’s market. In that month, 78 duplexes sold at an average of $436,694.

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This August, eight-six condos sold in Sacramento County, down 4.4% from last year’s volume of 90 units. The average price of condos sold in August was $227,889, down 5.5% from last year’s average of $241,267. On a sold price per square foot basis, however, the drop was a much more bubbler-friendly 16.2%. Last August’s average condo was 1098 square feet in size and sold for $219.73. This year, on average the size was 1238 square feet and the sold price average was 189.36 per square foot. The median price is down 8.8% from August to August, from $225,000 last August to $206,000 this August.

Interestingly enough, however, some of the changes in the condo market are in a positive direction. The expired to sold ratio is down, albeit slightly and still well within the “buyers’ market” range, from 102.2% last year to 94.2% this year. Average days on market however have dropped 16.7%, form 90 days last year to 75 days this year.

Anecdotally, we’ve noticed some really dramatic discounts in condos we’ve been showing recently, especially among short sales and foreclosures.

Twenty-four of the eighty-one units that sold (27.9%) in August were bank owned. There are 11.4 months of unsold inventory, with 902 units active and 79 units per month selling, on average, over the past year.

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Antelope’s real estate market is one where a large number of short sales and foreclosures are driving prices down. Our foreclosure list puts Antelope at number six in our unfortunate hit parade of high foreclosure areas. Between them, short sales and foreclosures make up slightly more than half of the available inventory in Antelope. There are 500 active listings in Antelope at present, of which 103 (20.6%) are bank owned, and 150 (30%) are short sales.

In August, the average home sold in Antelope fetched $302,588, 18.3% less than last year’s average of $370,212. Some of that difference was size related, with this year’s home coming in 5.5% smaller. The average sold price per square foot dropped somewhat less, therefore, 13.5%, from $215.24 last August to $186.09 this August. The median price was down 16.9%, from $361,200 last year to $300,000 this year. Units sold were down from last year’s 62 units to 46 units this year, a 25.8% drop.

Interestingly, though short sales in inventory outnumber bank owned properties, when you look at what sold, the numbers are reversed. Though bank owned properties (REOs) make up 20.6% of the inventory currently, they represent 32.6% of the sales in August. Conversely, short sales make up 30% of active inventory, yet accounted for only 10.9% of the sales in August.

This difference is not surprising given the price discrepancy. Looking at the current list price in Antelope, homes that aren’t short sales or foreclosures average $200.41 per square foot, while short sales are priced 9% less at 182.42 per square foot. REOs are priced even lower, 15.0% less, at $170.43 per square foot. In addition, most agents probably feel that REO sales are a bit less problematic, so to the (limited) extent that buyer choices reflect our opinions, that may have something to do with this as well.

To view current REO properties in Antelope, click here. We do not yet have short sale listings available yet directly on our web site (except mixed in with other listings), however please feel free to contact us if you’re interested in listings from this (or any other) custom search. To view all Antelope listings, click here. We’ll have short sale listings coming soon and will post links when they’re up.

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Looking at the real estate market for Folsom in August, we find a market that’s somewhat stronger in many respects than Sacramento County as a whole. I expect to see Folsom being one of the first Sacramento County markets to recover from the downturn we’re currently experiencing, but of course, that’s a “foreward looking statement”, which is how Wall Street says “guess.”

On to the numbers. Sixty homes sold in Folsom in August, down 13% from last year’s volume of 69 sold homes. The average home sold in Folsom for $478,254, down some 7.1% from last year’s average of $514,805. This year’s home being slightly bigger than last year, the average sold price per square foot in Folsom dropped marginally more, 8.5%, from $248.10 last year to $227.09 this year. The median price in Folsom dropped 11.7% from August to August, from $497,500 last year to $439,450 last year.

Compared to Sacramento County as a whole, Folsom sellers are competing with a fairly low percentage of bank owned homes. 6.7% of the homes that sold in August of 2007 were bank owned (REO), compared with 0% (no bank owned sold) in August of 2006. In inventory, bank owned homes make up 5.3% of the unsold homes, with 23 REOs to a total of 436 active homes for sale. Inventory is relatively low at just under six months.

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This report covers residential real estate sales for East Sacramento (95819).

East Sacramento’s real estate market continues to defy the statistics for the rest of Sacramento County, with strong prices and low inventory. This year’s average home sold for $486,300, 11% more than last year’s average of $438,041. Granted, this year’s home was just over 100 square feet bigger, but even adjusted for square footage, prices rose slightly from August to August. Last August the sold price per square foot was $346.55, while this August that number had risen .4% to $347.85. Only the median price showed any wear and tear, dropping 1.9% from $415,000 to $407,250.

As we reported for July, the numbers for East Sac continue to be strong. For example, in August, where average days on market decreased. This year the average was forty days, 13% lower than last month’s forty-six. Likewise the expired to sold ratio is down this year, from 56.5% to to 26.7%. Inventory is low at 3.63 months, down from 3.91 months last month.

Foreclosures are the exception to the rule in East Sacramento. Of the eighty-four active units in inventory, only 3 of them (3.6%) are bank owned. No bank-owned homes sold in August of this year or last year.

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Residential real estate sales in Sacramento County in August were sluggish compared to a year ago at the same time, with a noteworthy number of the sales being made up of bank owned properties. The average home that sold in Sacramento County in August was a 1717 square foot home that listed for $374,731 and sold for $364,256, or just over 97% of list price. The average sale price was down 11% from last year’s average sale price of $409,081. At $325,000, this August’s median sale price was down 12.2% from last August’s median of $370,000. Sold price per square foot was down 12.7%, from $242.92 last year to $212.15 this year.

Unit volume was down 30.4% from last year. Last August, 1216 units sold, while this August, the number had dropped to 846. The expired to sold ratio rose from 77.2% to 106.3% — i.e., more homes expired in August than sold.

All around, August wasn’t a great month.

In my opinion, the real story that stands out in August is the number of foreclosures. Last August less than one per cent of the homes that sold were REOs (”Real Estate Owned”, i.e., bank owned properties). This August that number has risen to 25.3%.

Bank owned properties are selling faster than non-bank-owned. Though REOs made up 25.3% of August’s sales, they comprise 16.2% of active inventory. So clearly they’re outselling non-REO properties, even though they’re often sold as is.

There’s a good reason for this, of course: price. Recall our average sold price per square foot in August: $212.15. If we break that down between REOs and non-REOs, we get $177.10 for the bank owned properties and $222.49 for the properties that are not bank owned.

The difference in price between REOs and non-REOs works out to something just over a 20% discount.

We have more of them.

Let’s go shopping.

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The real estate market in Carmichael, California (95608) in July was a bit stronger than Sacramento County as a whole. Unit sales were the same as last year at the same time (thirty-six), though less than the twelve-month average (forty-four). The average home sold in Carmichael in July for $416,588, or 95.6% of the average list of $435,906. The average sale price this year was down 8.6% from last year’s average of $455,987, however, unlike many of the snapshots we take, the average size was down somewhat, so the average sold price per square foot was down only 4.2%. The median price dropped dramatically (13.8%), from $429,000 last year to $370,000 this year.

With unit volume staying the same and falling expireds, the expired to sold ratio in Carmichael dropped from 83.3% last year to 58.3% this year.

With 328 units unsold as of this writing, there are currently 7.5 months of inventory in Carmichael, somewhat less than for Sacramento as a whole but still in the “Buyer’s Market” category. The thirty-one foreclosures (REOs) listed in the MLS make up 9.5% of the total.

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I recently congratulated my friend Susan when she closed escrow on a beautiful home in East Sacramento. At the time I told her about some earlier articles I had written about East Sacramento in general and the fabulous forties in particular, and told her about the sense I had that East Sacramento was a sort of a market anomaly — in a really good way — in that in the midst of falling prices elsewhere in Sacramento county, East Sac was holding its own quite well.

July’s numbers certainly bear this intuitive feeling out in a really big way. East Sac is doing quite well indeed. While the average price of a home in Sacramento County fell 7.4% from July of last year to this July, the average price of a home in East Sac rose an incredible 18.5% during the same period, from $468,094 to $554,571. To be sure, this year’s “average home” was a good deal bigger, but even adjusted for square footage, the sold price per square foot did a little better than staying relatively steady. It actually rose 7/10 of one per cent from July to July (when on larger homes you’d expect it to fall just by virtue of bigger sizes). So while greater Sacramento County’s sold price per square foot fell 9.5%, East Sac’s actually rose slightly.

At the same time, many other market indicators show East Sac going strong. Days on market actually decreased during the period, from 54 days on average last year to 38 days this year. The expired to sold ratio, which stood at a “buyer’s market” 66.8% last July, was down to 17.4% this July. At the same time the ratio rose in the county from 80.5% to 103.7%. Similarly, inventory in East Sac down to 3.91 months, compared to a county-wide average of 10.7 months. While unit volume dropped 47.3% county-wide, it rose 43.8% in East Sac.

So we have:

• Low inventory
• Rising prices
• Falling expireds
• Rising unit sales volume

Hey, I remember something like that. We used to have something like that in 2004 or so. What was it we called it again?

Oh yeah, I remember: Seller’s Market!

Sweet.

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