If your home is on the market in Sacramento and you're not getting any offers, the problem might not be price.
It might be price range.
The Trendgraphix report for January 2009 shows that only 5% of the home sales closed at sales prices exceeding $400,000. Wow. I looked at older Trendgraphix reports to see how far that percentage has fallen. By comparison, in May of 2006, 42% of the home sales in Sacramento had sold for more than $400,000.
Below is a chart reflecting the last 15 months of home sale activity in Sacramento County. Inventory, the number of homes for sale, has fallen by almost 50%. Check out those pending sales, the red line, 2205 homes, which means we'll most likely see a big jump in closed sales next month. The number of homes that closed in January decreased 26% over December, but that's primarily because that number reflects December's pending sales, which is always a slower time of year.
- The average sales price in Sacramento is $189,000.
- 60% of the homes in January sold for less than $200,000
- 35% of the homes in January sold at prices between $200,000 and $400,000.
- 5% of the homes in January sold for more than $400,000.
- The average per-square-foot cost fell by 4% to $116.
Real estate agents who refuse to work in the under-$200,000 market are missing the boat because that's where all the action is in Sacramento. It's a great time to be a first-time home buyer in Sacramento. Why? Because homes are affordable and interest rates hover around 5%. Many Sacramento homes for sale are foreclosures and short sales. Still hesitant? If you look back to May of 2006, only 1.2% of the homes in Sacramento sold for less than $200,000.
Now is the time to start hunting for that dream home you've always wanted to buy. If you'd like more information about home buying in Sacramento, call Elizabeth Weintraub, Sacramento short sale agent at 916.233.6759.
The Short Sale Savior, by Elizabeth Weintraub, coming in June from Archer Ellison.
Image: Trendgraphix
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Certified HAFA Specialist
My Sacramento Real Estate Listings
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 the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
That's awesome. Too often people just ignore the trends and allow a seller to pick a magic number out of a hat.
Elizabeth, we're seeing this as well. Over 50% of our pending sales are short sales or foreclosures. So where those owners would normally move up to the 450+ range, they obviously are not buying. Inventory over 500k is really hanging around. What are you telling people? Wait or reduce?
Elizabeth - WOW! Not sure what else to say about it - great graph though. I went on Trendgraphix to see what I could find out about my area and, of course, had to register for the 7-day trial and now have to wait to get the sales call before I can get the stats. Oh well. hopefully I can just get the stats for my area soon.
I suspect that our area will have similar stats though, with the bulk of our market being under 500k. It's tough though because I'm working just as hard (lately harder) for that 150k-250k ftb loan as I did in 2007 for that 350k-450k ftb loan. The depressing thing is I'm working more hours for less money because the commission checks are getting smaller and smaller.
Elizabeth: Pricing a home right is critical in a declining market. You can lose tens, or hundreds, of thousands pricing above the market and later having to drop further.
Elizabeth, many would lump Sacramento with other "high priced" areas of the state but your information debunks all that. Very factual and helpful to buyers.
Hi C: Well, it's the buyers who are picking the sales prices right now, and they are choosing prices under $400K.
Hi Colleen: I tell sellers with homes worth over $400,000 to price realistically and expect a long wait. A bonus, though, is the Stimulus Plan has reverted to 2008 loan limits which, in our area, means the maximum non-jumbo loan has moved from $474,950 to $580,000. Yay!
Hi Donne: Fortunately, all Lyon Real Estate agents can use Trendgraphix for free, exclusively in Sacramento. No other agents in our area gets it. And I do think those out of area have to subscribe. But it's a fantastic stat tool, capable of providing tons of information specific to ZIP and type of property.
I know what you mean about working twice as hard. I sold twice the number of homes in 2008 than I did in 2007 to make the same amount of money.
Hi Chris Ann: The thing I hate about price reductions is once you do it, the buyer always wonders how much lower the seller will go. Also, our Trendgraphix reports pick up the original sales price when it compares the ratios to actual selling price.
Hi Gary: Oh, Sacramento is very affordable right now. Many homes priced under $200,000 result in mortgage payments that are less than rent.
Elizabeth
A whole new market, and lots of even more deals for buyers.
Sincerely
Tom Braatz
It's been a very long time since we've seen that high of a percentage of sales in the less than $400,000 price range.
Elizabeth - YOU GO GIRL!!! Glad to hear someone kicked *&^ in 2008, even if you did have to work harder for it. My 2008 was rather dismal. I had almost as many transactions in 2008 as 2007 but at half the commission. Needless to say, my lifestyle has changed in the last year.
However, having said that, 2009 does appear to be starting out better than 2008 did. Perhaps there is hope for me and my business to improve to previous levels.
Elizabeth - we are seeing similar trends here - homes under 350K are moving extremely fast and most are very well priced as well (not many short sale or foreclosures in our area). ~Rita
Buyers are certainly who are setting prices in my area. The price drop continues in price in 09.
Who would ever have thought houses in California could be bought for under $200,000! Amazing.
Hi Tom: Sacramento sales under $300K are red hot, and those under $200K are sizzling!
Hi Myrl: Tell me about it. We have to go back to May of 2006 to see higher price points. 42% of homes selling over $400K back then simply astounded me, but something in my recollection said that was most likely true. I'm sorry, I keep wanting to spell your name like Haggard.
Hi Donne: I swear, I'm on fire right now. I did bump up my income in 2008 over 2007, but not by a gigantic amount, like hundreds of thousands.
Hi Kenna: Buyers know that now is the time to get those good deals. And who knows how long interest rates will hover around 5%?
Hi Tammy: I don't care too much about price drops because prices will go where they go, but we're not seeing HUGE decreases right now. In fact, most homes are selling over list.
Hi Barbara: So, does it make you want to buy a home in California? Or does it make you want to go back to taking photos of possums playing dead?