Sales volume plummet
Roseville, CA- Another month of real estate sales in the Sacramento area and another month where the media is reporting, “lowest since…” Yes, September sales in the greater Sacramento area were the lowest yet in for the eight county region of Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba during 2007.
Looking a bit closer to home and only at existing detached home sales, we saw one year sales volume declines of 43.3 percent in Sacramento County, 39.2 percent in Placer County and 24.9 percent in El Dorado County. In Sacramento County, only 846 existing homes changed ownership compared with 1,146 in August and almost 1,500 in September of 2006. The September sales in Placer County totaled 258 compared to 401 in August and 426 last year. El Dorado had 145 sales in September, down from 195 in August and 193 in September 2006.
According the story in the SacBee, “Home loan woes undercut sales ” the Sacramento area is not alone. “The Bay Area and the nine county Southern California region both reported the lowest September sales in more than two decades.”
During September median sales prices continued to decline. Sacramento County’s median sales price for existing homes was $310,000, down 17 percent from the benchmark high in August 2005 and down from $350,000 a year ago. The positive news for sellers in Sacramento was the median sales price remained unchanged from last month.
Median Sales Price
In Placer County the September median sales price was $400,500, down $29,000 from last month and 11.8 percent from a year ago. At the peak of the market in August 2005 the median sales price for a home in Placer County was $505,000. The drop from then has been 20.7 percent.
Over in El Dorado County the September median sales price was $390,000, down from $428,750 in August and $448,500 in September 2006. It should be noted that in counties like El Dorado where there are not a large number of sales, these numbers can change dramatically each month depending on the mix of homes sold.
The pressure on sellers to reduce their asking price to get showings is very strong right now. Although we have started to see a seasonal decline in available homes on the market, it has not been enough to allow prices to firm. According to TrendGraphix, the data arm of Lyon Real Estate, the number of homes for sale in Sacramento, Placer, El Dorado and Yolo counties totaled 16,081 at the end of September. This is more than the number of homes on the market in September 2004. Over at HousingTracker the number of homes on the market, in their defined Sacramento area, was 18,007 as of October 15th. This is down from a high of 18,844 at the end of August. Clearly we have more homes on the market than active willing buyers and until this changes the downward pressure on asking prices will remain.
Unfortunately there is not one thing you can point to and say this is causing the slowdown. Clearly the recent changes within the Mortgage lending industry have reduced the number of buyers who can qualify. The large number of homeowners who are in financial difficulty because their payments have increased and their homes are not worth as much as they owe is an issue. We have long enjoyed buyers moving here from other parts of the country. This has slowed due to problems in their own area, in other words, they need to sell somewhere else before they can buy here and can’t. Finally, there are potential buyers who are just waiting to see what happens. Why buy now when I can buy later at a lower price is their motto.
With the falling prices the lower end of the market is now below $200,000 and appears to be attracting investors back into the market. Several sources have reported this but there is no hard evidence this is a growing trend although I did get a call from an investor in the Bay Area is interested in looking at some property to rent. We will see.
Based on what I am seeing in my business at MagnumOne Realty, I believe we may see a spike up in sales in October and November. We have had more showing in the past few weeks and I think there is a natural desire for buyers to want to be in their new home for the holidays.
We specialize serving the needs of buyers and sellers of homes in the Roseville and Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.