Time for the Market Update.
We haven’t flatlined. The ebb and flow of buyer demand is the natural heartbeat of the market. The pulse of the market in the Sacramento area has remained fairly consistent over the past 5 years. Winter months generally reflect a drop in buyers’ interest, but make no mistake part of the issues is caused by a lack of supply. This past February at the low point for the season, we had just 1.2 months of inventory whereas in August we had 1.3 months of inventory. For the data geeks: That number is derived from taking the # of houses available for sale (on the MLS) and dividing it by the number of homes sold in a given month so a smaller number indicates that two are getting closer together – more homes sold and less inventory which equates to less buyer choice.
As we move into Fall, we’ll see the average time that homes sit on the market creep up a bit. It’s ticked up a day since last month and has fallen by 7 days from this time last year.
It’s still a SELLER’S MARKET. Prices have continued a steady climb – the average price per square foot in August was up to $220, up over $217/sf from July and up from $184/sf in Aug of 2016. The Average Price of homes sold last month was $428k up from $393k a year ago which is a healthy 8% increase year over year price appreciation. Normal tends to be around 6%.
Dear Buyers, the hunt for the perfect home can be challenging. Don’t exhaust yourself early on, understand that with such limited inventory your journey will be memorable for its many discoveries and surprises. No two buyers’ experiences are alike though you are likely to feel the heat of competition with a competitive offer bid because a desirable home is likely attracting more than one buyer’s interest. Your passion for staying in the game and securing your dream abode provides you indelible memories to build the next chapter of your life upon!
Dear Sellers, the buyers reward the most prepared. Hearing the enticing words: “Hot Sellers Market”, may deceive you into believing that pricing high will net you the most money. In fact, pricing too high counter-intuitively may penalizes you (see OVER-pricing below). In addition, there are smart, value-add things to do to make sure your home wins the beauty contest, the hearts, and offers of the buyers. An experienced, full-time Realtor who is in the Market and hears the decisions of buyers as they decide to write on one home over another can help you understand the micro market you’re in – not all areas, price points, or houses are moving in single digit days. If you want to know what a buyer wants in your neighborhood, call me for a free consultation.
OVER-pricing: Analysis shows that homes that sold within the past 12 months where the sale price was less than the listing price by more than 5%, the Sellers got on average $30,000 less than their listing price and they stayed on the market for an average of 50 days (aka DOM).
UNDER-pricing: Conversely, analysis shows that homes that sold where the sale price was higher than the list price by more than 5%, sold for an average of 7% more than list price and had an average sales price $24,000 greater than list price while only remaining on the market for 11 days.
Source: MLS for homes sold in Roseville for the past 12 months.
Jane’s Commentary: Many buyers in the Bay Area can’t afford homes there so we’re still getting a migration this way. Inventory remains stubbornly low. We’re averaging about one month of inventory which means that it would theoretically take just one month to deplete inventory if no new homes came on the market. While some people expect a correction, the demand in our market seems to counter the expectation. Next week, I’m writing about that migration – talking to some people about their journey here. Stay tuned!
Yesterday, I had a client couple up here from Vallejo to do the final walk through of their house before they went to sign at title. I couldn’t get into the house with the key in the lock box because the security door was locked and the key didn’t fit! The gate had a padlock on it as well so when calls to the listing agent and the sellers went unanswered, I had to do what I had to do! I do what needs to be done!! 🙂