Yesterday, I posted the last 15 months of homes for sale, pending and sold in Sacramento County through November of 2008. Below, is the chart that shows the last 15 months of bank-owned homes. There are a couple things I find interesting between the two charts. First, 33% of Sacramento County's housing inventory (homes for sale) in November were bank-owned homes, homes that have gone through foreclosure. Second, 72% of the closed sales in November were foreclosures. That translates to almost 1 out of every 4 homes sold in November was a foreclosure.
But look at the light green bars on top. These indicate the number of foreclosure homes for sale in Sacramento County over the past 15 months. The red line shows the number of pending sales, and the dark green bars are closed foreclosure transactions. It's almost like somebody looked at this chart last April and decided to hold the inventory steady. There is very little change in the number of homes for sale from April through November, yet the pending sale numbers have continued to climb, right along with the closed sales.
Hmmm . . . if I wanted to level out sales prices, the first thing I would do is hold off on releasing more inventory to the market. Lower the supply. Below is the chart reflecting supply of foreclosure homes in Sacramento. Check this out:
Sacramento County had 9.6 months of inventory in September of 2007. We are now down to 1.8 months of inventory. This means it would take less than 2 months to sell every foreclosure home on the books. There is no inventory. Yet, interestingly enough, the number of trustee deeds (the document that transfers title to the bank in a foreclosure) are rising. According to DataQuick, banks repossessed 14,054 homes through September.
As a result, home buyers will find themselves continually competing against each other (and against investors) to buy a home now. Multiple offers are the norm. The frenzy will be further fueled by the fact that mortgage rates are at a four-year low. But it also means that great deals are out there. I advise buyers to hire an experienced and knowledgable real estate agent versed in foreclosures to win those offers. Otherwise, you'll end up throwing offers at a wall and they won't stick.
If you need help buying a foreclosure home in Sacramento County, you can call Elizabeth Weintraub at 916.233.6759. I've been doing this for 34 years and doing it well. Almost every home I have in escrow right now is a result of a multiple-offer situation. My buyers are winning.
The Short Sale, by Elizabeth Weintraub, coming from publisher Archer Ellison in January 2009.
Chart images: Trendgraphix, used with permission.
Comments(7)