Agent Bubble sent me a spreadsheet of Sacramento County sales data, and he thought it would be a good idea to share the info. He broke the data out by house size, so you can get a good idea of what the market is doing at each level. Enjoy!
*Update: Added % change graph to accompany Lander's post.
Inventory levels increased with a vengeance this week, shooting up 2.3% to 13,357 over last week:
About half of that increase was in the $200K-$300K price range in Sacramento County:
It is only a matter of time before the price-range trends start affecting overall asking prices. Although they have stabilized over the past month, median, average, and price-per-sqft asking in all four counties is at an almost 1 year low, with only Placer showing a modest increasing trend in average asking price:
Flipper inventory continues to rise in all four counties as well:
Though not as fast as overall inventory. Thus, flipper market share has stabilized:
Looking at flipper market share in Sacramento a little closer, a pattern is beginning to emerge on a rough, 60-day time scale:
I would only be speculating (no pun intended) if I tried to explain this phenomenon, but here goes:
We know that inventory cycles on rough 30, 60, and 90 day intervals, centering on the first of each month. This is due to the typical listing contract durations a seller agrees to with an agent, and tendency to list around the beginning of a month. (The "roughness" comes in when a listing expires during the middle of the week, and doesn’t get re-listed until the following weekend or after a holiday.) Combined, these two factors lead to a pattern like this:
with weekly increases and monthly drops. Now, logic would indicate that flippers would adhere to the same cycle. However, if that were the case, we would not see a pattern in the market-share trend tied to the inventory cycle that would differentiate flippers from the rest of the market. This means that a disproportionately large number of flippers are dropping off and re-listing with the MLS at the same time.
Here is where the speculation comes in. Ruling out the possibility of a vast flipper conspiracy where they all get together and decide when to list their properties, I would guess instead that a large fraction of these flipper houses are owned by a mere handful of individuals or companies. Could it be that more and more of these flipper houses are falling back to the banks, even if they are not selling for less than the previous sale price? What does that say about HELOCs or "sloppy second" loans?
Or is it possible that a large REIT got into the flipping game in Sacramento, and is now left holding the bag?
Please, feel free to speculate in the comments. I would love to find out what is underlying this trend.
Agent Bubble and I have noticed a lot of blog traffic recently from real estate-oriented financial companies. We are aware of the new realities facing your industry, and we are here to help. With our unique data sets, we can:
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If you like what you see here, and think we can help your company to understand the Sacramento market better, please send an email to sacrealstats (at) blogspot (dot) com.
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.
I had some extra time on Friday, so I paid a visit to Delavan Circle in Rancho Cordova. Four houses on that street appeared as Flippers In Trouble recently, and I wanted to get a closer look.
Delavan is located on the southernmost edge of Rancho Cordova, east of Sunrise Blvd and south of Douglass, in the Anatolia master planned community. (The area once belonged to Aerojet, and was part of their weapons testing range during the 1960s and 1970s.) Several builders are represented in Anatolia, including Cambridge Homes, D.R. Horton, Lennar, and JTS Communities.
The Anatolia development looked like it was over 80% complete. On my way in I drove by contractors working furiously on both Lennar and Cambridge houses, and there were several spec houses by both builders with "available" signs out front.
As I made my way over to Delavan, I passed by the JTS Communities office, and I realized with a sinking feeling that these four FITs were JTS houses. There were only two cars in the model home parking lot, and the entire JTS side of the development was like a ghost town:
There were over a dozen empty lots, and some poured foundations with no construction activity taking place. The lot signs were sun faded, and the bolts sticking out of the foundations were weathered and rusty:
The four houses on Delavan Circle were empty and looked unlived in. The only hint of human occupancy I noticed was a single set of tire marks on 11890s driveway:
So, how could four houses on one street get into trouble so fast? Agent Bubble was kind enough to dig a little deeper into this mess, and this is what he discovered:
• Three of the four houses were purchased with 100% financing. The fourth put 5% down.
• Option One did loans on three of the houses, one for 95%, one for 100%, and a third 80/20 (both notes).
• The other house was an 80/20 done by American Brokers Conduit (both notes).
• All four are now short sales asking between a 17% and 25% loss.
• All four were initially listed asking between a $75K and $80K profit.
• Only one house is listed as having been lived in at all.
 11887 Delavan Cir Rancho Cordova, CA 95742 |
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 11833 Delavan Cir Rancho Cordova, CA 95742 |
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 11890 Delavan Cir Rancho Cordova, CA 95742 |
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Here's some quick graphs of the new Dataquick Foreclosures.com data out today. If you haven't read the story yet, Lander has a couple of write-ups. The takeaway: Sacramento foreclosures up 400% y-o-y, 17% m-o-m:
Went out of town for a little R&R, so no stats this week. They'll be back next Saturday or Sunday.
Update: I've broken down the distressed properties by year built and price
Year Built
2005-2007 - 141
2000-2004 - 358
1995-1999 - 121
1990-1994 - 174
1985-1989 - 191
1980-1984 - 158
<1980 - 693
Price
<300,000 - 755
300-399K - 638
400-499K - 247
500-599K - 112
600-699K - 48
700-799K - 26
800-899K - 10
900-999K - 2
>999K - 5
In my monthly post on the number of "distressed" properties for our 4 county area, we continue to see a steady increase in listings. Once again, I'm classifying a "distressed" property as either a short sale, pre-foreclosure, or bank-owned property. Let's look at the stats:
In the last 30 days, we've had a 9% increase in MLS inventory and a 30% increase in distressed properties. 1 in every 7 homes now falls under this category. How much higher can we go?
Just got an anonymous comment pointing me at this item from CBS13 News. Here's the rundown:
- 4 of 6 sold for less than starting bid.
- $480K house went for $440K
- Interview with "investor" said a house he bought for $510K sold for $410K
- Reporters were banned from observing
Have a look at the video. The investor guy is pissed! :)
I just checked our MLS, and it looks like they received offers on all 6 properties today. I won't know the sales price for another 30-45 days, but will do an update to let you know. I did, however, check MLS for recent sales of the same houses that sold today. Here's what I found:
(The first house listed in each set is the West Coast home)
6904 Rio Tejo - $530K
10165 Stathos - $568,475 Sold on 11/28
6908 Rio Tejo - $515K
6937 Rio Tejo - $587,958 Sold on 11/8
6912 Rio Tejo - $495K
6905 Rio Tejo - Active for $538K
6924 Rio Tejo - $490K
6933 Rio Tejo - $500K Sold on 12/19
Didn't see any comparables for the other model (2549 sq ft) which had two models sell today. As you can see, they did undercut all of the recent sales for the previous sales.
Not a lot of change to report this weekend. Four-county inventory grew to 12,821, keeping to the growth rate trend of January:
Ditto on the various price levels. There does seem to be a breakout at the $200-$300K level in both Yolo and Sacramento County:
As for the flippers, their misery grew again over last week:
(Side note: I had planned a "Flipper Squeeze" article for last week, but I had a much better idea for a feature that requires more data collection and time to put together. Stay tuned.)
Median and average asking prices remained fairly stable w-o-w, but the drops in price/sqft seem to be resuming after some fluctuations over the New Year:
At this point, this is probably due to the addition of more lower-priced houses to the MLS, rather than price reductions. The fact remains that the resale market is overpriced when compared to new house builders, who are almost universally priced below $200/sqft.
All-in-all, the overall market seems to be holding its breath until the Spring "Selling Season" begins. Barring some dramatic occurrence in the credit market, we might have to wait until it exhales (or turns blue) before we can draw any conclusions.
