Sunday, August 26, 2007

Sacramento Regional Real Estate Trends for August 25, 2007

Well, it took me all week, but I finally revamped the massive code and database infrastructure that generates the lovely data I present here each week. It was actually a long-overdue cleanup; my codebase and database system grew as kind of an organic process over the past year point five, and was becoming difficult to manage as new concepts got included. Concepts like the new Seller In Trouble metric.

From the input of my loyal readers (and my blog partner Agent Bubble), I have added the "Seller In Trouble", or SIT, metric to the weekly stats. An SIT is simply defined as: somebody who is selling a house for less than what they paid.

In addition, I have made a very slight change on how I define a "Flipper In Trouble" (FIT). The FIT definition has now been expanded to include: somebody who listed a house for less than what they paid within the last two years, even if the listing continues after the two-year cutoff. This change has had a moderate impact on past FIT numbers, with an average increase of about 8% over the past 16 months. I believe this change does not alter the spirit of the FIT metric, which was always designed to include the sellers intent. Clearly, anyone wanting to sell before the two year tax advantage kicks in can be defined as a flipper, even if they're unable to pull it off.

Also, keep in mind that the SIT numbers by definition include the FIT listings as well. For example, if there are 2500 SIT listings, and 2000 FIT listings, there are 2500 listings asking for less than what they paid, 2000 of which are flippers.

So, without further adieu:

I went ahead and created a combined "Troubled Inventory" graph. As you can see, there were already some interesting developments this week, with flipper inventory dropping even as SIT inventory hit a new high. I think the SIT drama is best captured by the SIT market share graph:

It looks like even the SIT situation in El Dorado county is begining to accelerate.

There was a slight decrease in overall inventory this week, with almost all of the decrease occuring in the $300K-$350K range in Sacramento County:

I think a lot of those listings were flippers:

No surprises on the asking price front, with declines continuing across the board:

Thanks for all the ideas and support. Please let me know what you think!


AgentBubble said...

Great work. This is very helpful info!

... said...

Don't take for granted that the effort you put out is normal. . . . its appreciated.

Zillow was publishing a bunch of garbage in its databases and has stopped sending that data altogether, not even corrected.

BLS still uses "fine delicious apples" in its bag of groceries to measure our economy's inflation rate - most of us buy Fuji's from Sam's. . .

Just saying

Most untrained stat hacks (anybody with a PC including most of our media today) blow off doing the real work of picking good data before putting it into the grinder.

Anonymous said...


It is time for me to drop another $50 bill into the donation box. Your work is stellar.

So the stats show we have approximately 18,000 listings in the metro area and 2500 of the sellers are asking less for their houses than they originally paid. That is 14% of the market. The price trends in real estate are set in the margins not the mainstream (Thank you, Popcorn Neil). This is true going up and going down. The sub prime bubblicious idiots had a nice run. I remember saying in 2004 that I was glad I was not a home buyer, because I could not imagine paying the costs associated with buying my house again in the current bubble market pricing. I was part of the mainstream, not the margin.

Today, I am almost giddy at the deals that will come along in 2008 and more in 2009. I will then be part of the buying margin, setting the new prices. You see, I have 25% down, an 800 FICO and was very lucky to have stumbled across your blog in December 2005. It is the best return on $50 I will have ever invested!

Many happy returns.

Anonymous said...

Max, I can not find a donation box on Sac Real Stats, so I went over to Flippers in Trouble and used that one.

I figure you site has saved me $236,000, since I did not accpet the sellers counter offer in 2005. The property never did sell and I am sure it has lost that much value. That is a 472,000% return on my $50!!

Thanks again.

patient renter said...

I like the new FIT criteria.

Big Rig said...

Very nice.

Thanks for all your hard work.

2cents said...

This is great, Max.

Re: the new FIT definition, I'll bet this slightly underestimates the actual FIT because it can be so hard to tell if the listing has continued since there can be a short gap between listing and relisting, the MLS number can change, etc. - all those tricks agents use to shorten the DOM statistic.

Thanks again for your commitment to this - you're elightening all of us.

Anonymous said...

Thanks for all your hard work! Your blog is my starting point for my weekly research. Please keep the weekly stats coming! You are doing this community a great service.