No BS Market Commentary and Indicators

This page is dedicated to you if you are interested in market changes and an education in the "core metrics" that explain, in part, the market dynamics.  These charts are the product of my proprietary method for tracking changes.  The charts do not only depict the raw data but, better yet, show the momentum of changes in that data. 

Indicators & Chart Education
-- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5 --

This 6.88 acre parcel in Placerville has a well, power, various building sites/options, custom home plans, and a creek that the gold-diggers used back in the 1850's.  Priced at only $399,900, the per acre price is a great deal.

Seller is motivated.

Marketed by REALTOR® Jay Emerson, CA License 01788488, 916-966-8700

Galster Real Estate Group

Through July 2008

You hear the old news about real estate statistics. You read headlines that could, by themselves, cause a panic. But where are the forecasts? Better yet, where are the forecasts that are relevant to YOU? Some pay thousands to get this information. My treat, to you!

This commentary is my opinion of Sacramento's real estate market using history, current conditions, and the market forces. This is not a crystal ball. If I knew of guarantees, I would not be writing this piece.

This ongoing analysis is similar to the concept used in foreign exchange (forex) currency trading (a commodity much like real estate). While this is most useful to an investor, understanding the market is necessary even when buying or selling your family's shelter, not an investment property. This type of analysis is a speculator's tool to predict the direction of the NEXT data point. And those can be billion-dollar guesses. Explaining history should be done but it's your NEXT action that makes a difference. Refer to this month's charts and note where the Momentum indicator crosses it's zero axis (red axis & typeface) - it has been a predictor of the change in actual volumes. Specifically: 

• Home Sales momentum crossed beneath zero at August 2005 coinciding with the marked decrease in Sales in January 2006. Momentum hit a bottom in December 2007 indicating the Sales spiking in March 2008. And momentum is still positive.
• Permits momentum hit above zero first in April 2002, spiked with the last big builder push, and has stayed at or below zero since September 2004. The builders that have survived are not going to repeat the mistake.
• NOD momentum went above zero in November 2005 which points to the increase in NOD volume in the first quarter of 2006. NOD momentum seems to have peaked in August 2007.
• REO Sales momentum went above zero in January 2006 pointing to the marked rise in volume in April and May 2006. REO Sales momentum seems to have peaked in March 2007 and heading down (but still positive).
• Mortgage Rate momentum went below zero in August 2007 pointing to relative drop in rates from October 2007 through May 2008. The momentum is still negative but it's meandering. 
• Median Price momentum peaked in February 2005 which points to Price peak in August 2005. Momentum crossed beneath zero in November 2006 and Prices really started to fall in March 2007. Momentum is still negative.

What does this mean when mixed together? That depends on YOUR NEXT ACTION.

• If you are running for President - Don't increase taxes. Don't increase the size of government. Don't spend beyond your budget. Don't budget beyond your income. Don't leave the door unguarded. 
• If you are a Buyer - Rates are still low. I don't foresee a drastic move by the Fed but our election may have some impact and momentum could turn upward. Loan options are changing. There are still good homes for sale and more every day. Prices are at 2002 levels and could still decline more, especially in certain zip codes. Other areas are doing well. Be prepared for a multiple-offer situation if your target is $350K or less.
  • ACTION PLAN: Hire me. Discuss market and decide on strategy. Put your cash in a bank account in order to prove you have it- increase your buying power. Talk to your lender or ask me for a suggested professional. Be prepared by understanding your housing/search requirements so I can build you a custom and private website for your search results - know your buying power first. Eliminate homes you won't consider. If you're considering a newly built home, I can get you more incentive or upgrades by representing you on your first (and every) visit. Come with me to tour the homes you desire. Make offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, buy, and move! 
• If you are a Seller - If you don't need to sell, wait another year and ask again. Otherwise, you need to know your immediate and general market competition and forces. There is a perception that a REO listing is a better deal. You will have to be very realistic about the price a buyer will offer. Check your emotions at the door. That's what your competition is doing. 
  • ACTION PLAN: Hire me. Discuss market and decide on strategy. Stage your home. Keep home clean and available. Market, market, market your home. Consider offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, sell, and move!

Whether you are buying, selling, or running for President, my service commitment to YOU is unequaled. If you know someone who is looking for a great Realtor and would appreciate the same service I would give you, please give me their name and number and I'll follow up. You know you can trust me.

Bottom line: Call me to get started. 

See charts @ http://JayEmerson.com/Indicators.asp

I have a new indicator called the "pulse" indicator. This is my reading on the activity and psychology of the market in this area including a summary of the momentum indicators.  Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.  

See the rest of the story here...  http://JayEmerson.com/Indicators.asp

By the way, if you know someone who is selling or buying and who would appreciate my level of service and expertise, send me their name and number and I'll be glad to follow up.  I'm never too busy for your referrals.

If you read the local newspaper, you may have seen that April's home sales made front page news.  By itself, it's a sign that there were more buyers in the market than in March.  But more enlightening, and not understood by the news writers, is that inventory indeed dropped by a more significant amount.  Instead of 8.3 months of inventory (length of time to sell all Active listings, all things remaining equal), there is now only 5.9 months' inventory.  That is a healthy number.  If it's too high, supply is higher than demand.  If it's too low, well, it's the opposite.  Anywhere between 4 and 7 is a sweet-spot.

But stories about the trenches from someone in a cozy tent cannot depict the truth when compared to someone actually in the trenches.  Read my trench story here...  http://JayEmerson.com/Indicators.asp

Banks are aggressively trying to reduce their inventory and there are a lot of buyers submitting offers on these and other homes.  My momentum indicators are no guarantee of how a market will change in the coming months but they are leveling off in many areas like REO sales (indicator of bank-owned inventory) and Notices of Default (indicator of new, possible foreclosures).  Likewise, the number of resales is increasing at an increasing rate (momentum heading upward). County-wide median prices are low but some resilient zipcodes (Fair Oaks, Folsom, Granite Bay) are doing better.

Read the rest of the story here:  http://JayEmerson.com/Indicators.asp