What we know of today’s market
The 2018 year-end statistics are in the rear-view mirror. Here is what we know of today’s market with my glimpse into the future.
The Sacramento County real estate market ended the year with all indices down compared to last year at this time, save current inventory. Current inventory is up compared to the previous year; however, it has declined from last month.
The average sold price per sqft has declined in recent months, but it is higher than last year; currently sitting at $229. The sold/original list price ratio remains steady at 97%.
Movement of sold pricing is considered neutral with little change from the previous month. Sold pricing has appreciated from the same period last year.
Units sold as a ratio to inventory is standing at two months, so technically, the market for Sacramento County is considered a seller’s market. Since buyers are becoming more judicious when it comes to pricing, defining the market neutral is more appropriate. Months of inventory less than three is considered a seller’s market.
Placer County is sharing the same scenario as Sacramento County. One difference is the ratio of sold price to original list price. In Placer County that ratio is 94%. It appears to me that sellers/agents misread pricing strength. Again, it reflects a buyer’s resistance to paying what they consider inflated prices.
El Dorado County market trends, by in large, are showing a different type of market than the other two surrounding counties. The indicators reflect a neutral demand with the inventory at a 3.4 months absorption rate. The data is showing their market is neutral, moving toward depreciating. The most significant data point to market participants is sold price to list price ratio–it stands at 95% and declining.
Overall, the real estate market is standing pat during the winter months; however, pricing is beginning to soften.
Does all this mean the current trends will carry into spring? Data for the last five years would tell us no. If pricing continues to be less robust, I believe that sales will accelerate beginning late winter or early spring. Sellers need to adjust their expectations, or the market will get sluggish and move into a buyer’s market.