Early forecasts for the summer housing market in the Sacramento region don’t suggest much change in the biggest single factor at the moment: lack of inventory.
Appraiser Ryan Lundquist, who regularly blogs about the market, said the inventory of homes available on the market is about 1.33 months worth of home sales. That compares to 1.54 months worth of inventory a year ago.
That’s the fewest homes for sale at this time of year since 2013, when the figure was just over a month’s worth. But unlike then, when investors were aggressively scooping up homes at bargain prices, the market now is more typical in terms of owner-occupant buyers and a stronger local economy.
“The market has been trying to figure out what normal looks like and it seems we are hitting a stride with sales volume,” Lundquist said in an email.
Sales were up 2 percent in the region in February compared to a year earlier, while prices jumped by 6 percent compared to a month earlier. Lundquist said he’d caution against drawing many conclusions from month-to-month sales, especially during slower winter months. Year-over-year, however, the median price was up 8.2 percent in February in Sacramento County, and 7.7 percent higher in the region.
As the busier buying season gets underway in spring and summer, three factors will drive the market, Lundquist said: interest rates, low inventory and affordability. The last figure is important because while prices are only rising slightly, few homes are for sale for less than $300,000 and relatively tepid wage growth hampers many would-be buyers.
One other number stands out: the decline in short sales and foreclosures. According to Lundquist, bank-owned sales constituted 3.4 percent, and short sales 2.5 percent, of all transactions in the region last month. Typically, a “normal” market has such transactions at 5 percent or less of all sales.
Article and image provided by: Sacramento Business Journal