Low sales numbers appear to be driving data, however as many have noted, inventory is also unusually high for this time of year. I expect sales numbers to pick up next month due to rate driven activity.
I also expect that some of the more iron clad zips will start to deteriorate at a faster pace now (including the ones I watch, 95762, 95630) as demand is siphoned by off to other areas which have become more affordable in the last year or so.
SFH inventory was collected from Zip Realty, and January SFH sales are from DataQuick via the SacBee.
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"I also expect that some of the more iron clad zips will start to deteriorate at a faster pace now (including the ones I watch, 95762, 95630) as demand is siphoned by off to other areas which have become more affordable in the last year or so."
I was doing drive-by's again this week, in the Arden/Arcade area near the river as well as in Carmichael off Fair Oaks near the river. A year or two ago, I was saying that these areas were so far out of my range that I'd probably never be able to afford them even if prices dropped. And that I didn't feel at ease in them, either. Now, I'm having the exact opposite problem: I really like these areas, they're quiet and clean with scant traffic.
If it ever gets to the point that the style of house that I like is at the top part of my range in those neighborhoods, vs. the bottom part in other places (Elk Grove, Foothill Farms, Citrus Heights) -- I'd stretch for the nicer neighborhood. It's still a long shot that prices would ever drop that far, but if prices drop uniformly another 40% it's possible. So, it's possible nicer areas will pull people "up" as prices drop, too.
Keep in mind that you are using the slowest sales data of the year to create your # months inventory - January closings reflect holiday contracts and a lot of questions in the financial markets.
Traffic and sales increased significantly after January 2 and since you're pulling inventory from mid Feb, look at current open escrows...
Take Folsom for example... currently has over 90 homes with open escrows, you could possible be looking at 3-1/2 months inventory and Carmichael with over 60 in escrow, 4 months inventory.
How about El Dorado Hills in a price range of $350-400K...
14 homes available,
6 open escrows -
2.3 months inventory.
Of course its just a dead cat bounce..... but when you look at overall inventory, it includes a lot of "junk" that you would never consider, and much of the junk may never sell.
Heck, even Antelope showing 132 open escrows and 356 active listings - that could be less than 3 months inventory - must be those bus tours!
Cmyst - don't expect prices to drop uniformly..... most of the inventory, speculation and current large median price drops have been in the new tract areas and nearby.
If looking at open escrows, then what percent of escrows never close per month. Some people that actually want to buy will not find financing...
Sippn - Appreciate you helping me make my point.
I noticed in my price range there seemed to be more PS activity lately, especially at the lower end. I looked to see if this was an across the board activity ....and it wasn't. Very few PS above the 500k mark.
My personal translation, there is strong pressure to drop prices if you want to actually sell your home.
Much of what you call "junk" is just overpriced inventory. There is very little true junk in the Folsom and EDH areas.....I am not nearly as picky about homes as you think. Mr. BTs family works in construction, so even mold is not off the table.
Sippn - Post long weekend (not for me sniff sniff) check of the MLS has prompted me to amend my previous comment....activity in Folsom seems to have picked up in most ranges below 600k now, not just the 400K & 300K ranges.
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