Monday, August 27, 2007

Taking a Closer Look at...Natomas

Next in the series of examining local real estate markets is Natomas. When I think of Natomas, the next thought is Elk Grove and how close the two areas are in just about everything. While it appears Elk Grove is leading the downward spiral in terms of foreclosures and price drops, Natomas is definitely a close runner up.

Natomas
Criteria: Single family residence
Comparing: 01/01/06 to 08/28/06 vs 01/01/07 to 08/28/07

Total Unique Listings Entered
06 - 3,224 (579 listed more than once)
07 - 3,100 (519 listed more than once)

<1500>
Sales
06 - 401
07 - 236

Average Price
06 - $310,897
07 - $265,101

Average Price/SF
06 - $260
07 - $220

1500 - 1999 SF
Sales
06 - 267
07 - 207

Average Price
06 - $405,563
07 - $345,271

Average Price/SF
06 - $235
07 - $201

2000 - 2499 SF
Sales
06 - 167
07 - 144

Average Price
06 - $492,508
07 - $425,036

Average Price/SF
06 - $219
07 - $190

2500 - 2999 SF
Sales
06 - 72
07 - 42

Average Price
06 - $586,092
07 - $529,603

Average Price/SF
06 - $215
07 - $195

<3000 - 3499 SF
Sales
06 - 29
07 - 18

Average Price
06 - $664,200
07 - $599,463

Average Price/SF
06 - $206
07 - $187

<3500 - 3999 SF
Sales
06 - 12
07 - 3

Average Price
06 - $735,791
07 - $687,333

Average Price/SF
06 - $196
07 - $187

4000+ SF
Sales
06 - 7
07 - 8

Average Price
06 - $787,286
07 - $857,437

Average Price/SF
06 - $178
07 - $191

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!

Wednesday, August 22, 2007

Sellers In Trouble

I've been making progress on the statistics, with scary results:


Note that "Sellers In Trouble" include "Flippers In Trouble".

I went back and recalculated all the FIT data for the last 1.5 years using the criteria I discussed last Sunday. I then calculated a simple "Sellers In Trouble" count for each week as Agent Bubble recommended.

The SIT numbers have been increasing even as FIT numbers have begun to level off. (There was a 4.1% increase in SIT between August 11 and August 18.) Simply put, the pain is spreading.

Foreclosure Moratorium???

From a story on KCRA.com.

"California consumer advocates are calling for a moratorium on home foreclosures.

They warn that the state is facing a tidal wave of foreclosures over the next year as more homeowners are hit with payment increases brought on by subprime loans and risky mortgages.

The executive director of the California Reinvestment Coalition told the Senate Banking, Finance and Insurance Committee that a six-month moratorium would give officials time "to figure out how to keep people in their homes."

The Mortgage Bankers Association estimates that more than 46,000 California homes were in foreclosure in March and more than 76,000 mortgage loans were seriously delinquent.

Subprime loans are made to borrowers with shaky credit histories or those who cannot always document their incomes."


This line of thinking really amazes me. I'm wondering just what in the world they think they can do to keep someone from getting foreclosed on. We're talking straight affordability here in the majority of cases. People can't afford their payments!!! How about a 40 year mortgage? 50 year? Lower the interest rate?

Let's see how that would change the payment on a loan:

We'll use a $500,000 mortgage with a 6.5% interest rate, amortized over 30 years.

P&I would be about $3,160 a month. We won't add taxes or insurance since that's a fixed cost and won't be affected by changing the terms of the loan.

40 year mortgage: $2,927 a month (savings of $233)
50 year mortgage: $2,818 a month (savings of $342)
30 yeat at 5.5% interest: $2,838 (savings of $322)
30 yeat at 4.5% interest: $2,533 (savings of $627)

One more weak attempt at keeping values inflated.

Sunday, August 19, 2007

Sacramento Regional Real Estate Trends for August 18, 2007

Another week of modest inventory growth, as four-county inventory increased by 0.6% to 18,246:


Asking prices continue to decline across the board, and (with the exception of El Dorado County median) there's been new two-year lows nearly every week this year:


The bottom is definitely not in quite yet.

On another note, Bubble Sitter and Gwenster have called into question my two-year cutoff for the definition of a "Flipper In Trouble". The two-year cutoff was originally based on the assumption that a normal (non-investor) person wouldn't try and sell a house before the two year capital gains exemption took effect. At the time the data bore that out, with over 90% of FITs identified in the data having bought within the last two years.

Since then, the market has changed drastically. Here is a graph showing the two-year vs three-year Sacramento County FIT inventory since April 2007:


(Note: This graph was the result of a rough query of my database, so FIT inventory numbers here might not match exactly with other data on this site.)

In hindsight, the emergence of the three-year+ FIT makes perfect sense as we've seen asking prices falling into the late 2003 range in some areas. Clearly, this issue needs to be addressed, and graphs updated to show the magnitude of this trend. My goal is to do that by the end of this coming week.





Monday, August 13, 2007

Sacramento Regional Real Estate Trends for August 11, 2007

After three weeks of zero growth, inventory shot up by 2.2% to 18,132 in the four-county Sacramento region:


Good thing I didn't call the top three weeks ago. Boy, I would have looked stupid!

All of the counties showed inventory jumps over last week, with increases in the $200K-$300K range featuring prominently. Yolo saw a huge jump in the $350K-$400K range, and El Dorado saw a nice recovery jump in the $700K-$800K range as well:


Asking prices continued their overall downward trend:


Flipper inventory continues to hold steady, with FITs making up 14% of the total resale market in Sacramento:




Friday, August 10, 2007

Distressed Properties Update

The trend continues for yet another month. We've reached a point where more than 25% of all MLS listings are now either a short sale or bank-owned property. We've averaged about 400 new distressed properties added per month since I started tracking this back in November. I'm curious how long this can go on since inventory seems to be at its peak for the year. Worth mentioning: We added 523 "net" listings since last month, but we added 544 "net" distressed properties for the same period. I realize all the new listings weren't distressed, but this is still an interesting stat to think about.

Wednesday, August 08, 2007

Taking a Closer Look at...Elk Grove

Next in the series of examining local real estate markets is Elk Grove. Having lived in Elk Grove for most of my life, I can say it has changed quite a bit from when I first moved there. We left Elk Grove in May of 2006, and it's very unlikely we'll ever return. Like a lot of residents there, the direction the city is headed just doesn't make much sense. Anyway, enjoy the data!

Elk Grove
Criteria: Single family residence
Comparing: 01/01/06 to 07/31/06 vs 01/01/07 to 07/31/07

Total Unique Listings Entered
06 - 3,900 (598 listed more than once)
07 - 3,674 (525 listed more than once)

<1500 SF
Sales
06 - 305
07 - 212

Average Price
06 - $352,461
07 - $306,796

Average Price/SF
06 - $275
07 - $241

1500 - 1999 SF
Sales
06 - 360
07 - 275

Average Price
06 - $417,242
07 - $364,805

Average Price/SF
06 - $275
07 - $211

2000 - 2499 SF
Sales
06 - 274
07 - 212

Average Price
06 - $485,228
07 - $428,427

Average Price/SF
06 - $220
07 - $193

2500 - 2999 SF
Sales
06 - 155
07 - 112

Average Price
06 - $558,541
07 - $495,455

Average Price/SF
06 - $206
07 - $183

<3000 - 3499 SF
Sales
06 - 80
07 - 47

Average Price
06 - $632,359
07 - $611,491

Average Price/SF
06 - $199
07 - $191

<3500 - 3999 SF
Sales
06 - 34
07 - 17

Average Price
06 - $733,770
07 - $679,483

Average Price/SF
06 - $197
07 - $183

4000+ SF
Sales
06 - 18
07 - 11

Average Price
06 - $913,374
07 - $805,581

Average Price/SF
06 - $209
07 - $191

Sunday, August 05, 2007

Sacramento Regional Real Estate Trends for August 4, 2007

Inventory levels remained fairly unchanged week over week, with a net drop of 103 listings after the monthly expirations. As AB pointed out, with ~1500 sales in July, we now have 12 months of resale inventory on the market:


I would like to highlight some trends on the price-level inventory front. In all the counties, save El Dorado, there has been a surge of $200K-$300K priced houses put up for sale:


This surge is directly responsible for the overall asking price declines we have been seeing here, and inventory at that level continues to grow even as the higher-priced inventory levels decline:


The re-pricing of the Sacramento housing market continues before our very eyes.




Wednesday, August 01, 2007

Preliminary July Sales Stats

Early sales stats for July are in. As always, expect another 200 listings or so to be added as agents slowly get around to entering the data in MLS. Assuming we end up around the 1,500 mark for sales, and inventory is hovering just above 18,000, we're at 12 months of inventory.