Prices on Elk Grove homes for sale have started rising
It seems a long time coming, but prices on Elk Grove homes for sale have started to rise. And while generally I see this as a good sign, for home buyers searching for homes in Elk Grove it could spell trouble.
It's a matter of simple economics...you know, supply and demand.
Part 1: Supply is down-
Don't let the over abundance of short sales fool you. They are not really for sale...Short sales should have signs that read "might be for sale, but probably not".
The number of truly active homes for sale in Elk Grove, including bank owned and privately owned homes, is surprising low. The chart on the left shows active vs homes sold in Elk Grove since September 2008. While a year ago the supply greatly exceed demand, at the moment, there is a one month supply of Elk Grove Real Estate on the market.
Part 2: Demand is way up - We have several years of pent up demand for homes in Elk Grove. Many buyers who have been on the fence, patiently waiting for a market bottom, are coming back to the market. There is also an entire population of 1st time homebuyers that can afford a new home in Elk Grove for the first time in many years. Combined with the tax credit and great interest rates that are expected to rise next year and it looks like a storm may be brewing.
As a result buyers are competing with other home buyers wanting to buy a home in Elk Grove. Multiple offers are now the norm 
and home prices are climbing.
They also sell fast. The chart on the right shows average days on the market for Elk Grove Home Sales (excluding short sales). In November the average days on the market was 38. This is the time between coming on the market and being marked pending. This includes the 7-10 days it usually takes the banks to deliver a signed purchase contract.
As prices get bid 2%-5% above comparable historical sales, they create new comparable historical sales. And as an escrow can close in 30-45 days we could see appreciation as much 3% to 4% range per month in certain categories.
There is also the Fannie Mae Effect which could contribute to a short term hyper rapid appreciation...but more on that in another post.
If you have been thinking of buying a house in Elk Grove California it may be time to get busy.
Bill
http://www.sacramentobill.com/
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