Making Sense of It All - 95672 & 95630

Below is my attempt to make sense of the conflicting data I have been gathering for 95762 & 95630.

According to both Housing Tracker and SacRealStats inventory is still dropping in the Sacramento Metro Area.

Specifically, inventory for the El Dorado Hills housing market (95762) is down 4.3% compared to last month, and 21% compared to last year. For the Folsom housing market (95630) its down 2.3% compared to last month, and a whopping 40% compared to last year. Although, I should note that both of the month-to-month changes are below the region’s average month-over-month drop of 5.8%.

Part of the explanation for the drop in inventory is increased contract activity. The number of pending homes in my screen scrape is still at an all time high. Approximately 1 in 3 homes is pending. I specifically use the term “pending”, since actual sales don’t seem to be up compared to April 07 or 06 (don’t have May data yet). In fact, sales in Folsom are still considerably below those levels.

This is where things get interesting. I have been tracking NODs and Foreclosures for the past three months for those zip codes (see graph below). Rates for both have been going up steadily. NODs seem to be a bigger issue in Folsom, and actual foreclosures in EDH.

This leads me to two separate theories….one for each zip code:

In Folsom, where home prices haven’t fallen much (less than 20% from peak), it seem like people have stopped trying to sell their homes and are purposely missing payments in hopes they can get a bank work out. Hence the big increase in NODs, but the smaller conversion to foreclosures.

In El Dorado Hills, I believe many stretched too far, and are getting foreclosed on. With prices down approximately 30% form peak, there is little reason to fight for your home. I should also note that, inventory has not dipped as much here, since million dollar homes make up a quarter of the listings. So looking at total inventory numbers is deceptive (these homes seem to sit forever).

What does all this mean for my home search? I have yet to figure that out =)