A bubble or something else?
A couple of days ago it was relayed to me a story of an agent using the “B” word. I thought about that and tried to determine why. Come to find out this particular agent has been in the business for a couple of years. Unless you lived through the early 90’s or mid-2000’s in Sacramento, you probably wouldn’t recognize a bubble; not at the beginning.
The latest sales numbers are in, and we appear to be in a neutral pattern valley wide.
The Sacramento County analysis states “seller’s market;” since the absorption rate is less than three months. However, pricing and number of sales would lead one to a different conclusion.
El Dorado County is showing a more significant slowdown than Sacramento or Placer County.
In all three reported counties pricing has declined, days on the market have increased and the ratio for the sold price compared to original asking price has also dropped with sellers willing to reduce their asking price to get their home sold.
The situation is not all bad. Similar to the stock market, when housing takes a pause and drifts downward it becomes a buying opportunity.
Pricing and home buyer’s income will need to reach equilibrium for a healthy housing market.
Sellers have realized healthy gains; I might add if selling a primary residence the sale will likely be free of taxation. You need to consult your tax advisor for conformation.
For me, the results of September indicate a seasonal shift. Buyers seem to be more discriminating, not settling. I take the position this is very healthy for the market.
Allow me to pontificate; to state that we are in a bubble is irresponsible. It does a disservice to both sellers and buyers.
Regardless of your belief, the verdict will not be known until we get past the winter and into full spring selling season again.
September housing sales numbers for September, 2018.