One of my Sacramento short sales is on the market after previously selling as a short sale, meaning this is the second time around for that home. (It wasn't my previous sale, in case you're curious.) That's because we've had two big downturn waves in Sacramento. There was the beginning, in August of 2005, when the phones stopped ringing. But the second wave of price declines, which nobody is talking about, hit again at the end of 2007, when people figured the market was finished falling -- i.e., because prices could not go any lower -- yet, prices continued to fall.
I was wondering why none of the sellers I helped to do a short sale in 2006 or 2007 was buying again after a short sale in 2008 or 2009. I imagine this is why. They're a little gun shy to enter the marketplace. These are people who were probably promised they could refinance or sell at a huge profit, and it didn't work out. They had the rug pulled out from under them.
To confirm my suspicions, I turned to Trendgraphix to see if the data mirrored my thoughts. Sure enough, you can see it in the square-foot prices. The chart above shows the average square-foot-price in Sacramento from February of 2005 through February of 2010.
Laid out below is the data table from the above chart. The square-foot-price in July of 2005 was $230. By the end of 2007, it appeared to level a bit. Then wham, the rollercoaster plunged. The square-foot price fell from $210 in August of 2007 to $162 in January of 2008. As of last month, that price per-square-foot has dipped to $120.
Just from my own experiences as a Sacramento short sale agent, I could feel the market beginning to recover about this time last year. It's still a little wobbily, but it remains fairly constant. Still, if I'm expecting my former short sale sellers to buy another home shortly, I don't think it's going to happen for a while. I suspect they are sitting out this perfect storm.
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Excellent quick way to "show it all". Graphs give you the trend, show the cycle without describing it.
looks like prices are leveling off in your area,which is good for my area since we get Sacto imports here
Thank you for sharing this valuable information and of course thanks for making it RAIN!!!
Hi Everybody: What I found a bit peculiar is that my short sale seller was a short sale buyer. Not my short sale buyer, mind you, but still. We could be seeing the results of that second phase of price declines already.
That's a great post - wonderful that you can line up your personal sense of the market with the price per square foot numbers. Good sleuthing! (Sorry your client didn't come back to you. That's always an ouch.)
Hey Mary: The seller was not my previous client. The seller bought the home through some other agent. I just noticed it when I listed it that the seller had previously bought this as a short sale, which is probably one of the reasons that seller did not call the previous agent to list it.
Elizabeth...Your graph really depicts the market over the past 5 years. I agree that many people are just hanging on and watching to see if the slide has really stopped. It would be interesting to see similar statistics from other parts of the country.
Thanks for the interesting graph! I enjoyed how it really shows the market over the last 5 yrs. as well as the $ per square foot. Have a good week!!
Elizabeth - That is a very revealing graph to say the least! I agree with your assessment that some folks are waiting to see if the value hemorrhaging has stopped. Your graph seems to indicate some leveling off these past few months, with a slight recent decline. But, that could be attributed to this unbelievably bazaar winter. Lots will depend on how much inventory gets thrown on the market these coming months, from the banks, short-sellers, and others. I think we will know a great deal more by late summer.
I looks like a lot of the country is experiencing the same trend in the market I hope to see prices start to rise soon.
A watched pot eventually boils, but this pot is taking a long time. I feel there will be improvement but it is taking its time arriving.
That five year graph is really interesting...I've never seen data per square-foot ...over time before.
Keeping up with Elizabeth is getting to be a full-time job. You come up with great ideas. I am impressed with the graphic.