Are you ready? It’s time again for a monthly beefy play-by-play of the Sacramento real estate market. There are many things to talk about, but fortunately there are two options for reading this post:
- 30 Seconds: Briefly scan the graphs below in 30 seconds.
- Three Minutes: Take a few minutes to digest the graphs and commentary.
Enjoy. By the way, should I keep doing this format? Is it helpful or too much?
Warning – Traditional Economics at Work: As inventory has increased, the median sales price has decreased. It’s always a bit normal to see values cool off during colder months, but it’s also a function of basic economics. When supply increases, prices tend to go down. Let’s look at a closer view below.
A Closer Look at Price & Inventory: The median price in Sacramento County for November 2013 was about $245,500, which is down from a high of $253,000 a few months ago. Housing inventory is now at 2.5 months, which is a dramatic change from being at a one-month supply for nearly one year until about six months ago when inventory began an upward trek.
How Fast are Listings Being Absorbed? The absorption rate is basically how fast current listings are being sold or pended each month. It’s an inverse of the months of inventory really, so this rate declines as inventory increases. Right now the absorption rate is 40.4%, which means that roughly 40% of all listings entered “pending” status on MLS or closed escrow last month. All you need to do to figure out the monthly absorption rate is divide the number of sales over the past month by the number of current listings. By the way, here is a quick tutorial on how to calculate housing inventory in case it’s useful (YouTube video).
Same Old Distressed News: Foreclosure sales used to dominate the market, but now they’re only hovering at about 5% of all sales in Sacramento County. Short sales have persisted to decline and only represent about 10% of all sales so far this quarter.
<img alt="Foreclosures and short sales in Sacramento County – by Sacramento Appraisal Blog" src="http://sacramentoappraisalblog.com/wp-content/uploads/2013/12/Foreclosures-and-short-sales-in-Sacramento-County-by-Sacramento-Appraisal-Blog.jpg" …read more