I’m often asked how the market is doing. While each neighborhood has its own microeconomics that affects it, these are the numbers for the greater Sacramento area and it should give you a good idea of where the market is.
Back in August of 2005 the Median Selling price was way up at $392,750 and then it went all the way back down to $160,000 by January 2012.
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During the height of the market we saw 2,325 escrows close in the month of June 2004 and at the slowest point we only had 707 close during September 2007. Now we are back to a much more reasonable level of transactions per month.
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2002 and 2003 inventory was low and the prices increased greatly. In 2006 prices started falling and inventory rose to record levels in 2007. By the end of 2011 inventory has dropped to a very low level and by 2013 to historically low levels. This combined with relatively low prices and very low interest rates has made it a competitive market…
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The Months of Inventory is a reflection of how many houses are for sale and how many are being purchased each month and how long would it take for them all to sell at the current rate. Not surprisingly, the lowest Month of Inventory had been April 2003 and the highest was September 2007. 4 months of inventory is a balanced level with numbers lower than that being considered a sellers market and anything above that being a buyers market. We have been in a new historical low since early 2012!
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So what does all of this mean? It means that the market was at a crazy low inventory for over a year, interest rates were at a historical low level and demand finally came back when everyone realized that the bottom of the market had passed. Prices have come up off the bottom, the frenzy has calmed and the years of pent up demand is somewhat satisfied. Sellers can’t assume a quick sale and a higher price than their neighbor just got. Buyers aren’t going up agains multiple offers on every property and agents are able to breath a little easier as we return to a more “normal” supply and demand.
The market has changed, again. Who knows what winter and spring will bring, but I can tell you I’m happy that I don’t have to give my buyers the “multiple offer competition is the norm” prep talk at the start of a search. Now I have to give my sellers the “don’t expect your home to sell in two weeks” prep talk instead…
At least it is never a dull job!
