How low can prices drop in Sacramento County? That's the question on everybody's mind. Agents and buyers are asking if we're at the bottom, almost like little kids excitedly repeating: Are we there yet? Are we there yet?
Here are charts from Trendgraphix, which are available exclusively to Lyon Real Estate agents, that show what's going on in the Sacramento real estate market.
The first chart shows the foreclosure market in Sacramento, and the activity over the past 15 months through March of 2009:
The horrifying problem with the above Sacramento foreclosure chart is we have NO INVENTORY. The pending sales for March have surpassed the number of foreclosures for sale. We have one month of foreclosure homes available for sale in Sacramento. The hope is, of course, that once the moratorium on foreclosures is lifted, we will see increased inventory. Because the number of homes going through foreclosure in Sacramento is still increasing, but there are very few foreclosures presently on the market.
Almost every foreclosure listing in Sacarmento is receiving multiple offers, which helps to push up the already below-market pricing set by the banks as advised by their REO agents.
This next chart shows the activity of all Sacramento homes for sale over the past 15 months through March of 2009, which include those offered by sellers who actually have equity -- or at least hope that they do:
The pending sales are continuing to rise in Sacramento. Sales are up 24% over February of 2009 and have increased 26% from the same time last year. As you can see, our inventory has dropped by more than 50% over the past 15 months. We have very few homes for sale in Sacramento, and about half are in pending status.
The average per-square-foot cost of a Sacramento foreclosure is now $99 as compared to a home that is not in foreclosure at $113 per-square-foot.
So while the good news is homes are now very affordable in Sacramento, trying to buy such a home can be difficult for a buyer. There is little selection. Multiple offers are the norm on every attractive listing. Prices often mean nothing as they are set artificially low. Which is why it's imperative to hire an experienced buyer's agent to represent you.
I won't go so far as to say every aspiring home buyer will end up with a terrific deal in today's market because it simply is not true. Some Sacramento home buyers will make offer after offer and go back to their rental home or apartment empty handed. There is not enough inventory to go around and competition is fierce. My advice is if you want to buy a home in Sacramento and qualify to do so, hire the best Sacramento buyer's agent you can find to give yourself that edge.
The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.
Images: Trendgraphix, available exclusively to Lyon Real Estate agents