Sunday, February 18, 2007

Sacramento Regional Real Estate Trends for February 17, 2007

Four-county listings inventory continued its inexorable climb over the last two weeks, growing to 13,049:


The inventory increase occurred at the lower-middle price ranges in Sacramento and Yolo counties, and was distributed evenly across price ranges in El Dorado and Placer:


Overall asking prices continued to slowly decline, while price per square foot values were still searching for a trend:


Inventory numbers aside, the big story this week has to be the condition of the Sacramento County flipper:



Flippers In Trouble now make up an astounding 10.2% of all current listings. Considering these numbers, Agent Bubbles distressed property analysis, and the recent, sudden rise in foreclosures, there is only one conclusion to draw: The Sacramento regional real estate market is under tremendous stress, and is facing serious problems in the very near future.

7 comments :

Sittin' Pretty said...

Max says...."while price per square foot values were still searching for a trend..."

That is a pretty generous statement. It certainly looks to me like the trend is down about 7% to 8% since mid-April 2006.

I cannot conclusively say what caused the year end jump (perhaps "special" incentives), but it doesn't matter now, as the trend down is continuing into 2007.

Patient Renter said...

I noticed a new statistic starting to be looked at on Ben's blog and was wondering if it could be looked at here for the Sac area: The ratio of closed escrows (sales) to NODs. What do you guys think of this and the significance?

darth toll said...

Anecdotally, I have some co-workers that are intimately involved in the Lincoln market and are currently trying to sell some houses there. One lady mentioned that after several months on the market with virtually no traffic, she has gotten about 5-6 people come through one of the houses just in the last week. No offers yet, though. This could either be an actual increase in buyer traffic (NAR campaign working?) or perhaps is just people coming in to asses the competition (sellers in disguise.) I tend to think it might be the latter as it still seems a little early in the season for real buyers to be out in droves. If this is sellers scoping out the competition, God help us all as we are about to see an inventory explosion. Comments or other market observations?

Sittin', is the price per square foot metric including new home sales, or is all data for resale only? Assuming the data is for resale only, one possible explanation of the year-end anomaly is that with the dramatic inventory fall-off, only the most desperate sellers kept their houses on the market - those sellers that couldn't afford to drop and are asking way too much to begin with. These could be one and the same as the flippers in trouble crowd. I agree, though, that the downward trend has re-asserted itself now that the inventory build-up is on again.

Anonymous said...

Just to mention about the Flippers in Trouble, just by cursory examination in my zip code and others, he does NOT have all flippers represented.

So that 10% figure is underestimated in my opinion,

Sippn said...

Darth toll, I believe he is using MLS data which is all resale except high end where most customs are marketed and now some high end tract (typ above $1 mil you'll see Toll, Standard Pacific, JTS, Greenbrier and a few others).

But it is not early in the season - Spring "sales" are typ closings of contracts written in Jan-Mar, so this is the buyer traffic - see other stories on the rise in pendings, rise in builder sales, etc.

Expect it to be less than early 2006 as the market still hadn't died yet and of course, much lower than the peak of 2005.

Regarding foreclosures and NODs, I would certainly expect the rate to blow past what we had during the past 4-6 years of boom - it was easier to sell a house to cover the loan than to hand back the keys. BUT the rate thru most of the 90's was close to where we ended 2006, I think.


Look at this from Calculated Risk

http://photos1.blogger.com/x/blogger/2825/754/1600/507506/CAdefault2006.jpg

CA did 37,000 NODs in the last quarter, puts it on track to match the highest year - could be ugly, but opportunities are there.

Sippn said...

SOrry, try this

http://calculatedrisk.blogspot.com/2007/02/foreclosures-at-beginning-of-this-cycle.html

sf jack said...

max -

This is great information - thanks for all of your work.

As to the trend (anomoly?) you've noticed, that's really something...

It's very interesting and I'll have to give it more thought.