Making Sense of the Market Today
August 2nd, 2010
This time around, let's look at some basic trends to see where the Placer County Real Estate market is now that we have an economy teetering on recovery. One of the most basic weather vanes is to look at Absorption Rate. That is the percent of homes that are sold in any one month (or looked at another way – how many months will it take to sell all the homes currently for sale). A neutral market is one that has 4 to 6 months of inventory on hand. A seller's market has less than 4 months (more buyers than sellers); and a buyer's market is one that has over 6 months of inventory (more sellers than buyers).
Let's also break the market into two sections. One with homes that sold under $300,000 and the other $300,000 and above.

Here is the last graph of the under $300k showing inventory, sold and pended homes.

This is an interesting chart because it shows that we have had a fairly significant increase in inventory over the past 4 months while sales have had a slight increase. Increased pendings does not always reflect an immediate increase in the number of sold homes – as you can see with the numbers for last summer. Some offers are canceled and many short sales take longer than 30 days to close.
Over $300,000
For the over $300,000 price range we are currently looking at nearly 5 months of inventory with 22% of the homes selling each month. That is considered to be a neutral market.

And here below, is the market breakdown for the homes sold in Placer County looking at REO, Short Sale and Non-Distressed sales. Over the past 18 months Non-Distressed sales have made up 57% of the reported sales on Metrolist listing service. April 2010 was 58%, May was 59% and June was 58%. Compare that to the 63% distressed sales in the under $300,000 price range.
As you can see below, we are starting to see a rebound in the sales of homes over $300,000 this year in the county area.

There are some signifcant differences in home sale trends
when you compare the under $300k to the over $300k homes. Besides the
overall basic trends described here, I cannot stress enough that home prices are extremely specific
to your location. If you have questions about the value of your home, please
feel free to contact me at (916) 303-0257.
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