Sunday, December 02, 2007

Sacramento Regional Real Estate Trends for December 1, 2007

Every time I think it's safe to make a prediction, this happens:


Although the increase looks small, it is very unusual for this time of year. It's mostly due to 165 added listings in Sacramento County, which offset drops in El Dorado and Yolo. (Placer added 29 listings.) Another sudden shift took place in the SIT metrics, with both the total dollar and percent loss totals returning back to previous trends:




Total SIT dollar losses in Sacramento jumped by $16 million in one week. That's over $5,000 per SIT house! Increase! In one week! Another stunner was El Dorado, which saw a $1 million weekly jump. That's a whopping $7,000 per SIT. Also note the magic 20% mark has been breached by the FIT group in Sacramento. (That translates into an average 100% loss for the second-lien holder.)

On the market share side, it looks like inflection points have been reached in both the increasing SIT market share trend and the decreasing flipper market share trend:



I'm going to go out on (another) limb, and predict that the SIT inflection point will turn out to be false, while the flipper one will be real. The inventory levels in the Sacramento region are just too high to support any pricing improvement in the near term. Especially with credit conditions deteriorating and thousands of ARM resets due next year.

Speaking of prices, no trend surprises there:



Median asking price in Sac County fell to $289,000, while average $/sqft remained above $200. Remarkably, El Dorado county saw its median asking price drop well below $500,000 for the first time in years, coming in at $489,000.

Week-over-week change data returned to trend after the holiday, and the average days since last sale for Sellers In Trouble continued with the saw-tooth pattern that began in September:



3 comments :

DrDoom said...

Max:

I appreciate your work and the heads up you give when any wiggle looks interesting. The week over week decay of the markets makes me numb. Any change is interesting.

I think the saw tooth pattern for days since last sale would occur when the MLS is dominated by old expiring listings that are taken off the market at the same time each month. The saw tooth appears to have a monthly period. I don't know why listings would be coordinated monthly unless there may be a neglect until the new month (or end of month) and then there is a general cleanup.

Bubble Sitter said...

To Darth Toll,

Last week I suggested the softening SIT data may suggest an ability to at least see a future bottom. You were quick to point out the bottom is a long way off and it is impossible to even see over the horizon line. Max' data clearly shows you were right and I was premature.

As I also mentioned, I bought a house a month ago. While no homes in my area have sold below where I purchased, 5 similar houses are now listed between $350,000 to $380,000. This is $10,000 to $40,000 below my purchase price!

The comps are the stripped down models without comparable amenities, but 45 days ago, they were all $399,000 and higher! I am not unhappy, but it is a bit ironic to find myself a probable "knife catcher" after all this bubble watching! Doh. I suppose houses could get all the way to $0, but I doubt it.

wrong moves said...

Bubble Sitter,
Dude, quit looking. You are just setting yourself up for buyers remorse. You probably bought smart for you. If you can afford the house comfortably, you like it, and don't plan on moving, then leave the blogs and enjoy life.

360K is personally my upper limit. I could do it, but I keep seeing nicer and nicer properties popping up for that price. I'm just waiting for the "perfect" place for my family. The wife and I have discussed the eventuality of buying and then seeing something nicer for the same or less. We will be just have to be happy with what we have and know we made a consious decision to buy when we did.