Sunday, March 25, 2007

Sacramento Regional Real Estate Trends for March 24, 2007

Inventory levels surged dramatically this week, increasing by 425 listings, or 3.1%:

Looks like the spring selling season has officially begun, and it's off to a fast start. Late March 2007 inventory is higher than mid-May 2006 levels. Both Agent Bubble and I predict inventory could top 20,000 listings this summer. (At this rate of increase, we will hit that number by late June or early July. One week doesn’t make a trend, however.)

If you didn't see it on Thursday, I am introducing a new metric to track week-over-week changes in inventory. I will probably tweak the graphs in the future in order to add some information (e.g. what are the price metrics of the new inventory; was the "new" inventory really new, or relisted after a period of time; etc.) Anyway, I plotted the data set both in absolute and percent of market terms:

Some interesting things to note from these graphs:

- Roughly 10% of all listings have been reduced since last week.
- New and decreased listings track remarkably well.
- Hardly any listings are showing week-over-week increases

As for price level inventory, take a look at the Sacramento $200K-$300K trend:

That price range makes up over 25% all Sacramento County inventory. So, where is it all located? Google Earth knows the answer:

Not a lot of surprises here. North Highlands, Oak Park, South Sacramento, and Del Paso Heights are heavily represented.

On the asking price scene, only El Dorado County seems to be holding on:

Sacramento asking prices have officially returned to the steep downward trend that began last summer, dropping 8.9% since then.

The flipper situation remains dismal:

Agent Bubble should also have some new distressed property numbers posted here soon. Suffice to say, the data aren't giving us a lot of good things to say about the selling environment in Sacramento. Inventory is shooting for record highs, flippers are going broke, and asking prices are dropping rapidly. And the selling season has only just begun.

Where Are All The Flippers?

Some readers have asked me for the areas where the flippers are concentrated. Rather than give a list of zip codes and numbers, I thought I would resurrect some of my Google Earth data and show you:

Thursday, March 22, 2007

Week-Over-Week Changes

Sippn and others had an excellent question about whether recent median and average asking price drops were due to newer, lower-priced listings, or price reductions on existing inventory.

Although a close examination of the price inventory level graphs can give us some idea, it might be useful to know what kind of price changes the bulk of the inventory is seeing each week.

In that spirit, I've created and graphed four categories of listings: New, Unchanged, Decreased, and Increased. Note that these conditions are based on week-over-week changes. That means this data is more like a direction indicator, rather than an absolute number. (For you calculus nerds, this is a derivative or vector value.)

The first graph shows the market share each category claims:

The second shows the absolute number of listings in each category:

Although these graphs are fairly chaotic, some useful information can be discerned:

1. Roughly 10% of all listings have price reductions on a weekly basis.
2. Less than 2% of all listings have price increases on a weekly basis.
3. The number of new listings and the number of decreased listings follow a similar trend.

These graphs are just a start. (For example, it would also be interesting to know how many "new" listings are really relisted after a long period of dormancy.) So, let me know if you have any other ideas or suggestions on how to improve this.

Sunday, March 18, 2007

Sacramento Regional Real Estate Trends for March 17, 2007

The big news this week is the dramatic drop in asking prices in Sacramento County. The median asking price of $350,000, which had held for 12 weeks, is finally starting to break down. The median has fallen for two consecutive weeks, and is now at $345,000. That is a 1.5% drop in two weeks. There was also a simultaneous 1.7% drop in $/sqft:

Both Yolo and Placer are seeing similar trends emerge, but they are too early to call. Could this be the start of a "Spring Thaw" in prices? Stay tuned.

Another developing trend is the rapid increase in flipper inventory. Looks like there were some flippers waiting for the spring selling season after all:

Otherwise, nothing too dramatic to report. Four-county inventory increased a modest 1% w-o-w, to 13,712:

Lower-priced houses are coming on the market faster than higher-priced ones in all the counties, except El Dorado:

All in all, some interesting trends are developing. This will make for an interesting spring…

Monday, March 12, 2007

Distressed Properties Update

This shouldn't come as a surprise, but the numbers keep rising! 15.92% of the 4 county market is now either a short sale, bank owned, or pre-foreclosure. And keep in mind, this number is probably a few points lower than it should be because agents aren't filling in the MLS fields correctly to account for the distressed listing. A few months ago, I guessed that we'd top out at 16% of the market for distressed properties, but now I'm beginning to wonder if I was too optimistic...Anyone think it will get to 20%???

Sunday, March 11, 2007

Sacramento Regional Real Estate Trends for March 10, 2007

March 2007 is turning into a "March of Death" for flippers. Flippers in trouble now make up one out of nine MLS listings in Sacramento County. Anyone who doubted the effect flippers have had on this market over the last two years should look at these graphs:

57% of all flipper listings are now in trouble, and the year is really just beginning. Flipper inventory in Sacramento County held at over 2000 listings until early November last year; currently there are only 1626 flipper listings. "Hold onto your hats and glasses…"

On the inventory side, things are starting to pick up nicely:

Four-county inventory stood at 13,584 on March 9. Last year we didn't have that kind of inventory until mid-May. We are beginning to see an up-tick in inventory at most price ranges as well. Spring is springing, at least from an inventory perspective.

I can't say the same for asking prices. Each county spent the last two months finding a trend, and they’re finally emerging:

Sacramento has resumed the downward trajectory it had since last summer, while Placer and El Dorado seem to be flattening. With far few houses on the market than the other counties, Yolo trends will always be volatile, but asking $/sqft seem to be on the decline there as well.

Finally, I have a couple of favors to ask. One, if anybody is flying into town and their approach takes them over Elk Grove or Natomas (i.e. Southwest), could you get a window seat and snap a few digital photos of the new houses below and email them to me? I've got an interesting idea I want to test… Also, I'm looking for information on the condition of local lending companies here in Sacramento. How's business these days? Is the purported national credit-crunch having any effect on you?

Thanks in advance.

Saturday, March 10, 2007

Thursday, March 08, 2007

New Century Goes Down

The Mortgage Lender Implode-o-Meter is reporting that New Century Financial has halted business. I found a recording of the company's phone message from Home123, their retail arm. Nothing like a little schadenfreude on a Thursday evening:


This subprime blowout is going to make Enron look like child's play.

Wednesday, March 07, 2007

Agent Bubble Sales Data Graphs: February 2007

February 2007 sales data surprised to the upside. Many of us (including myself) expected a continuation of the downturn, both in y-o-y performance and dollars per square foot. Not so, says the data. Average $/sqft increased to $234 from $227, sales volume held steady at 807 units sold, and average priced paid (not median) went up from $377K to $390K.

I think these numbers are explained in the type of house that sold last month. Although we saw an increase in price paid for all size levels, there were less lower-priced houses sold and more expensive houses sold. It's been noted anecdotally that higher-quality houses in better neighborhoods haven't seen as large a downturn as we've been seeing in the broader market. Maybe one of you out there can add some data to this argument...

Also, I'm sure we can expect a front page headline from the Bee when they release this story. Keep in mind that even though prices went up, sales levels remained extremely low. With sales this low, volatility will cause prices to skew dramatically in both directions.

We'll see if the Bee headlines do the same. :)

Hat tip to anon1137 for guessing correctly.

Monday, March 05, 2007

Sacramento Regional Real Estate Trends for February 24, 2007

Real quick this week. I was out of town this weekend so not a whole lot of time to do this. "Just the graphs, M'am." Bottom line: listing inventory fell due to typical monthly drop-off, asking prices were steady in every county except Yolo, and flipper inventory remained unchanged.

Agent Bubble has provided me with February's sales numbers, and I'll have them up by Wednesday. Prepare to be surprised. :)