Sunday, May 20, 2007

Sacramento Regional Real Estate Trends for May 19, 2007

Inventory growth slowed slightly in the four-county Sacramento region this week, with a 1.3% increase over last week's total of 16,126. There was a huge inventory spike last year at this time, so the year-over-year increase has also slowed to +10.5%:


At this rate of growth, four-county inventory will exceed 18,000 units by July 15th.

The slowing in inventory growth was mainly due to anemia in Placer and Yolo counties, which saw a 0.9% gain and a 1% drop respectively.

As for inventory price levels, Sacramento County continued to be inundated with houses in the $200K-$300K price range, and El Dorado saw a continued increase in the stratospheric $900K+ range:


Keeping with the trend, asking prices set new lows almost all-around this week:


Pricing remained somewhat flexible in most counties this week, with price drops occurring in about 10% of listings in Sacramento, Placer, and Yolo, and about 7.5% in El Dorado:



On the flipper front, it looks like something new might be happening:



After riding below the 20% line for most of 2006, total flipper inventory in Sacramento County has stayed at or above 20% of all inventory for the last 7 weeks. An astounding 65% of all flippers are now flippers in trouble. If the data from Countrywide is of any indication, there is a large backlog of REO inventory waiting to be unleashed onto this market, most of it selling at a loss. If the banks do start dumping, it will show up here first.

27 comments :

Perfect Storm said...

Are the inventory numbers tracked by MLS? If so I think there are a lot of homes not being put on MLS in order to mask actual inventory. No matter the majority of subprime resets are coming later this year and I think inventory will actually increase all the way to December. After December the economy will recede even further and the real housing market carnage will begin. What we have seen so far is just a walk in the park.

Perfect Storm said...

What percentage of the 5000 plus bank owned properties in the Sacramento area are for sale? If we use Countrywide as a gauge it would be 25%, so potentially as of today we are at 19,000 plus homes for sale.

Patient Renter said...

Anyone have insight into what might compel Countrywide and other banks holding properties to dump them on the market? The working theory is that they don't have the resources to list them all, but how long does this last?

Gwynster said...

I'm starting to see the words "short sale" or bank owned all over the under 400k properties in Woodland. Can't wait until the CW inventory hits.

Real said...

Inventory was +19% YoY compared to 2006 not that long ago. Now, we see that 2007 is only 10% higher - I personally would like to see inventory drop below 2006 levels and I think we will see it by the end of the year if not sooner. The Sac Bee is already talking about a new high rise condo project in Rancho - pretty near the southern border of Gold River. Looks like optimism is returning to the market.

I know....time bombs waiting, sky is falling, yada-yada....

Sippn said...

Max - You're expecting inventory to exceed 18000 by July 15, what was the July 15 week number last year. Like real, I have noticed that the rate of inventory growth has slowed.

Ask yourself, if you were CW, would you put it all on at once - NO, duh, if fact you might search for large bulk buyers who are willing to own rentals 5-10 years.

AgentBubble said...

For those interested, inventory for the 4 county area is currently 16,636.

Real said...

Bubble - can you break that down into new homes, existing single family, condo's? I am interested in how each category changes YoY....

Anonymous said...

NO, duh, if fact you might search for large bulk buyers who are willing to own rentals 5-10 years.

Large bulk buyers will want a serious discount.

AgentBubble said...

real-

I'm showing 1028 condos.
Of those, 28 are listed as "new" and 18 are listed as being built in 2007.

For non condo, I'm seeing 243 listed as "new" and 207 listed as being built in 2007.

One caveat is not all agents know about the "new" property designation when entering listings, which is why I included homes built in 2007.

Obviously (and unfortunately), not all new properties are entered into MLS. I wouldn't even venture a guess as to the percentage.

Real said...

Bubble - so, using your numbers, that would imply existing home inventory at 15,158. New homes would account for 3% of the total inventory - which I assume is almost all incremental to 2006. By this, I assume 2006 had very little new home inventory as I would have thought home starts finishing in 2006 would be under purchase contracts for the most part. Please correct me if this is an incorrect assumption - but my recollection back in 2004 - 2005 was that home builders would not start a home without a pre-sale and sales were 'assigned' based on winning a lottery. Don't know for 2006, but I don't think there would have been that much standing new home inventory then.

Also, is there any way to gauge builder activity in terms of new single family units by month? My driving assumption is that builder will slow their pace of new construction as they burn their the existing and prepper land - I expect this to happen sometime in late 2007/early 2008 which will reduce the influx of new homes at cut-rate prices and in the sub-$400K price range...

Sippn said...

MLS has very little information on new tract homes. The tract guys only cooperate when they're really desparate and tend to rely on their own advertising.

Dataquick now includes all sales in their data, but gleaning new home inventory is hard. US Census data on new home inventory defines inventory as including empty lots ready to be built on, so beware of fat numbers. 4.0 months inventory is as low as it gets during boom times, nationally they're at 6.4 months, a 2.4 month "overhang". They've been cutting permits since last year (why building departments have raised fees 30% to cover same costs) to get their production to match up with demand. Getting local inventory data is almost like spying, you might have to drive subdivisions yourself and count as it is somewhat competitive info.

Or do you really think there is a HAL somewhere?

AgentBubble said...

as sippin pointed out, new home data in MLS is pretty useless. He's dead on that it's only in MLS for extraordinary circumstances.

Real said...

Or do you really think there is a HAL somewhere?

I think 95% of the posters on this board believe that they are HAL, in reality, most are more similar to a 1985 Coleco with a broken joystick....

I am not a real estate professional and never presented myself otherwise so I am just trying to learn what info is available. Given your statement on the 2.5 month overhang - and lack of MLS usage, that would support my assumption that total inventory might already be lower than in 2006 given 2006 contained builder inventory that was not advertized vs. 2007 which does include this inventory not to mention I would think total builder inventory is up significantly from 2006.

Anonymous said...

Coleco came out in August of 1982.

HAL said...

I'm watching you.



-- Sippn

Anonymous said...

My troll filter doesn't seem to be working properly because I can still see real's posts.

Real said...

My troll filter doesn't seem to be working properly

Yeah, I think there is something wrong with my dipshit filter as well. Patient Renter stopped showing up though so maybe I just need to up the IQ filter to block anything less than 80 vs. its current setting of 75....

Captain said...

People will believe what they want to believe, despite what the numbers say. That's how so many got into their current housing mess in the first place. Real just needs to find some hypothetical situation that could throw some darkness on the statistics. Hey, 28% still think the Decider is doing a heckuva job!

Anonymous said...

No captain, real is a Realtwhore troll that is scared shitless about this coming implosion. Idiots like that constantly troll financial blogs hoping against hope that their boundless optimism can somehow sway public opinion and they can single-handedly turn sentiment around and re-inflate the monster bubble. LOL. What a sorry waste of a life. Chumps like that will often troll the Yahoo financial boards and that is where they belong - not on a serious blog like this one. Good luck, real, or should we call you Casey jr?

Gwynster said...

Cops Raid Gold River Pot House
http://www.news10.net/display_story.aspx?storyid=28255

Anyone heard from Real in the past 12 hours?

Perfect Storm said...

The market will get a lot worse it is the way of things. I just hope the coming crime wave can be handled, sort of off topic, but wait and see. God I wish I lived and died in the 1950's.

Real said...

No captain, real is a Realtwhore troll that is scared shitless about this coming implosion. Idiots like that constantly troll financial blogs hoping against hope that their boundless optimism can somehow sway public opinion

Did you miss the news yesterday about new home sales? Funny, I did not see that posted on any of the real estate blogs. The market saw the increase in sales as meaning a rate drop is now off the table as the market does not require it - which sent stocks down hoping for a rate cut. How many years has your and your ilk been predicting a drop and the most you got was a 10% drop from the peak? Many desireable areas aready saw an increase in price/ft^2 starting in Q4'06. You may get price declines, but it will be in the areas that you don't want to live so it really does not benefit you.

Gwynster - this story just goes to show how completely stupid criminals really are. In an area like Gold River, there will be constant traffic by the home from people employed by the village, gardners, inspectors for village CC&R compliance, etc. I am glad these individuals were caught - given this was 'high quality stuff', my assumption is that a lot of older rich potheads will have to find a new supplier.

Anonymous said...

hey real, did you see the existing home sales report today? You know, the thing you care about? LOL.

Sales volume down 10% YOY, inventory to the highest level since 1992. This report was a real stinker. Wow, it really must suck to be wrong all of the time. BTW, the new home sales reports are notoriously noisy and are constantly revised. Just like last year in March when the bulls proclaimed the slump was over because of a 13% jump in sales, only to find out the bust had just begun when the new home sales were revised down in following months. You really need to do a little more research before you stick your foot in your mouth.

May I suggest the following:

http://www.calculatedrisk.com

Real said...

Great article in the SacBee today...

"Now from the department of sloppy neighbors: A survey by ServiceMagic.com found that almost every block has one.

Of 900 people surveyed, 63 percent said they have a sloppy neighbor who neglects the house and makes the block look bad. Twenty-one percent admitted it's probably their house that the neighbors resent.

The top sloppy neighbor complaints are tall weeds, junk cars, unmowed lawns and paint jobs.

The survey shows most neighbors are patient and long-suffering. Asked if they'd ever snitch to authorities or a homeowners association, 41 percent chose: "No, we just put with it."

Fourteen percent said someone else beat them to snitching and 22 percent admitted they reported the offenders. The rest answered: "Not yet.""

Guess the number of sloppy neighbors in Gold River! That is why I would never live anywhere else in Sacramento...

Patient Renter said...

"Yeah, I think there is something wrong with my dipshit filter as well. Patient Renter stopped showing up"

Easy there boy. This is a family blog.

Kely said...
This comment has been removed by a blog administrator.