During the first quarter of 2015, 118 new open escrows, or pending sales, were posted for luxury homes priced $900,000 and above throughout the Greater Sacramento region. This number marked the strongest showing by a large margin, for any 3- month period dating back to September of 2007, according to information provided by Trendgraphix Inc., a Sacramento based reporting company, and reported by Lyon Real Estate.
Home buyers in all price points hit the resale market in full force last month as a record 3,102 new open escrows were reported. “Not since May of 2012, when our median price was $200,000 and 64% of today’s $312,000, has the market been in such a shopping frenzy,” says Pat Shea, president of Lyon Real Estate. This information was provided by Trendgraphix Inc., a Sacramento based reporting company, and conveyed by Lyon Real Estate.
“New open or pending sales in March were 37% higher than the already solid 2,262 posted in February. Pending sale numbers also finished the month 22% higher than their best open month in all of 2014,” according to Shea. Closed sales of 2,151 units reflected very strong momentum as well, with a 27% increase over February. Both metrics point toward a very robust April and mark a resounding rebound from the typical seasonal slow-down.
Homes below $300,000, regarded as the entry level price range, logged 1,347 new open escrows and left that market segment with less than one month of inventory. The move-up home market, $300,000 - $750,000, posted a resounding 45% increase in pending sales over February and finished for the quarter 20% higher than last year. The move-up market is also reflecting historically low available inventory with less than two months remaining on the shelf.
“The upper-end, $750,000 and above, is a really big story,” says Shea. “Eighty pending sales reported in February represent a very strong showing for our region; 131 posted in March is astronomical.” First quarter pending sales in the upper-end posted a 45% increase over 2014 numbers.
“Consistently improving employment opportunities and economic enthusiasm for our community are continuing to drive a very solid resale housing market,” says Shea. “Inventory choices in the move-up, upper-end and finally new construction market should provide adequate fuel to sustain the momentum. And of course, it doesn’t hurt that interest rates remain at those May, 2012 levels as well.”
Lyon Real Estate’s charitable giving program, the Lyon Cares Foundation, has long supported and provided opportunities for its agents and employees to support local causes. In an effort to expand its ability to contribute at a deeper level, the Lyon Cares Foundation has recently added greater sustainability and new ways for members of its thousand-plus agent force to support non-profits by partnering with the Sacramento Region Community Foundation.
With this new partnership, Lyon Cares will work closely with the Sacramento Region Community Foundation, which manages more than 500 charitable funds for local families, businesses and nonprofits. “The Sacramento Region Community Foundation is honored to partner with Lyon Real Estate to further their philanthropic goals and to engage its agents and employees in strategic giving,” said Foundation CEO Linda Cutler.
In February, 2,504 new open escrows represented the highest number posted in the Greater Sacramento region over the past 10 months. This figure, coupled with an already solid January signified a 35% jump over the new pending sales posted for November and December. The number of active and available homes for sale dropped to just 4,030 and left the market area with its lowest inventory since January of 2014. This information was provided by Trendgraphix Inc., a Sacramento based reporting company, and conveyed by Lyon Real Estate.
“Our market is currently in a strong seller’s position,” says Pat Shea, president of Lyon Real Estate. “While 4 to 6 months of inventory typically signifies advantage seller, our entire region currently holds a mere 1.6 months based upon the rapid pace of new open sales and sluggish rate of new property listings.”
All four counties in the region showed tight inventory based upon the current rate of new sales. Sacramento County concluded the month with 2,217 homes available on the market, the lowest since June of 2013, and demonstrated the county’s highest new open escrows - 1,600 – since May of 2013.
Placer County holds 133 luxury listings specifically, $900,000 and above. That number is almost twice that of Sacramento and El Dorado counties. Removing the luxury listings and pending sales where fewer sales occur, Placer County ended February matching the region’s average of a 1.6 month supply of available homes.
“The February median sold price of $320,000 for the Greater Sacramento Region is another big story,” says Shea. “This level has not been reached since November of 2007 and again signifies the overall health and vibrant outlook for the remainder of 2015. Low interest rates continue to support buyers. New properties entering the market however, will remain the most critical key to sustained momentum.”
Zillow chief economist Stan Humphries has this advice for homebuyers: Watch where Starbucks opens and buy a house close to one of the ubiquitous coffee shops.
The reason, he said, is that homes within a quarter mile of a Starbucks tend to rise in value faster than homes outside a quarter-mile radius. Humphries, head analyst for the online real estate tracker, calls it the “Starbucks effect.”
Sacramento’s strong rental market is paying off for existing landlords and it can be tempting for other rental owners to consider managing their own properties. However, despite the potential advantages of the current market, it takes years of experience to handle the many delicate situations that can occur in property management.
Owners considering entering the rental market as landlords need a sophisticated understanding of fair housing regulations to avoid lawsuits that hide in what may seem like common-sense assumptions. And despite the lean market for rentals, renters need to be aware of their rights in order to minimize any potential issues that might come up.
The seasonal slowdown for resale homes in Greater Sacramento has ended quite abruptly as new escrows in January jumped 44 % over December totals. Closed sales for the month were down 36% over December which was largely attributed to sluggish new escrow figures during the months of November and December. This information was provided by Trendgraphix Inc., a Sacramento based reporting company and reported by Lyon Real Estate.
“People are seeing an economic resurgence in our community and reading all the good news,” says Pat Shea, president of Lyon Real Estate. “Buyer activity is heavily based upon consumer expectations and everything just looks exceptionally positive for Greater Sacramento.”
Active and available homes on the market in the four county region ended January at 4,092. This marked the lowest total since last February and rested 34% below the 2014 high number posted in September. This left a mere 1.8 months of inventory at the current rate of pending sales. Listing numbers are expected to rise by spring however, years of purchases and refinances at low interest rates may keep supply moderate throughout 2015.
The statistics show that 48% of the current inventory is below $350,000, where 62% of the new sales for the entire region occurred last month. A further look also revealed that 42% of the inventory remained in the $350,000 - $750,000 price range where 35% of the sales occurred.
“The entry level and move-up selling season is well underway,” says Shea. “A sustained stability in the median price, hovering near $300,000 and interest rates at or below 4% have buyers back on the move. The upper-end typically gets off to a slower start but rest assured that all of the positive economic metrics have Greater Sacramento positioned for another banner year for homes sales in all price points.”
If you purchased stock early on in Apple, Google, Microsoft or Facebook, you were either really smart, pretty lucky or a little of both. What about housing? Twenty years ago, the median price of a home in San Francisco was $262,000; in 2014, it topped $1,000,000. The entire San Francisco to San Jose corridor has exploded with economic success and consequently, the evaporation of housing affordability. There is no respite in sight and nowhere to grow except perhaps in Greater Sacramento.