When we compare the number of homes for sale with the number of houses actually selling now, we can get a good idea of how many months it currently takes to sell a home.
That number is increasing.
Location Matters
Sacramento county is not just one area when it comes to the local residential real estate market. Some areas of the county are red hot and sellers are turning their homes into cash in 30-60 days. This is the case in west Elk Grove, for instance, where prices are moderate, homes are newer, and the schools are good. Other areas of the county, though, are starting to build inventory. Carmichael, Arden, and the Pocket neighborhoods are all seeing three to five months of inventory for sale.
What's Happening?
Inventory is increasing as prices rise and sellers decide to go to market. Many people are finally out of negative equity. But the number of buyers is still limited. This means more competition for buyers and longer times on the market for all but the top homes in area. Houses in good condition that are marketed properly and priced correctly will sell. All others will sit. In fact that is happening now - almost fifty percent of the homes placed on the market don't sell.
Our View Going Forward in 2014
- The Supply & Demand curve works! Watch housing inventory. Demand has to be guessed at, but supply can be easily tracked
- Prices in Sacramento are still 40% undervalued from 2007 levels. Prices will continue to rise.
- Rising prices will cause more inventory to come on the market - price increases will slow down in 2014 and 2015
- Long selling periods will not stop price increases, as California continues the disconnect between price and affordability
Our Data
We get all the data we use (and the cool graphs) from TrendGraphix - through our membership in MetroList - and we trust their numbers.
The analysis is our own.
