November 2011: SACRAMENTO MARKET REPORT by Melinda Carter

November 18, 2011

As the winter season approaches quickly and with the holidays upon us, a quick glance over some of the recent Sacramento real estate trends show a steady decline in the inventory throughout the area. This decline is evident in an overall inventory drop of about 18 percent since November 2010. Right now, there are about 1,400 less homes for sale in the Sacramento area than there were last year.  In reaction, this downgrade in inventory has spurned other figures in the real estate market, as buyers could be primed to take advantage of some sales that have gone along with the drop in homes for sale. 

Along with lowered inventory throughout the 2011 year, the Sacramento real estate market is also experiencing decreases in median and average asking prices. Steady over the last month or so, the median asking price is down nearly six percent from this time in 2010. Even the average asking price and average asking price per square foot have also gone down five and seven percent, respectively. 

With the median asking price currently sitting around $160,000 in the Sacramento area, there could be some good news for prospective buyers in the early months of 2012. Not only are the prices lower than a year ago, but mortgage rates are also hitting country wide and local records throughout the second half of 2011. A 30-year fixed rate mortgage in Sacramento is currently at 4.277 percent. As the rates have sat over the sub-four levels for the second half of 2011, they’re currently in the buyer’s corner as far as advantages during the purchasing process. 

For sellers, a steady increase in rental rates throughout the area could drive some potential buyers back into the fold. Those doing their research in a decision between buying a home and looking at Sacramento apartments would currently weigh the appeal of low mortgage rates with the trend of rising rent in the area. Last year at this time the average rental was about $100 less than right now. 

Short sales have gone up in the Sacramento area; October experienced nearly a six percent increase on the September returns. About 1,400 homes were on the short sale market, while over 1,000 other homes were added to the pending sales numbers in October. In a good sign, foreclosures seem to be mostly steady and somewhat down in recent months. There’s been a gradual downgrade from over a 1,000 foreclosures in April to only about 700 right now. 

Even though there are a few trends that have seemed to swing in the buyer’s direction in late 2011, it’s truly hard to predict whether a thriving market is far off or not. In the end, trends and statistics fail to have as large an impact as the specific buying factors for potential home owners. The market should continue to be driven by the appeal of specific properties and the situations of those who are interested in buying.