Drop in Inventory Adding Stress to Housing Market
The number of new listings fall while new open escrows rise
The number of new listings entering the greater Sacramento region’s housing market during the month of June fell 14 percent shy of last year at this time. However, new open escrows over the same period posted a 5 percent increase. Activity as reflected by these indicators left the resale housing market with 10 percent less inventory than last year heading into peak summer selling season. This market information is presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.
Closed sales for the month of June were down nearly 15 percent year over year but less than 10 percent when looking at the entire second quarter.
“A rebound in closed sale numbers is very likely to appear in the coming months,” according to Pat Shea, president of Lyon Real Estate. “New open escrows for the second quarter were actually up 1 percent compared to 2018.”
The average sales price for closed escrows during the month of June rested at $484,000 and was up just a dollar versus May. The average was also 4 percent higher than June of 2018. In May of 2018, the average sales price hit a new high of $474,000 before steadily retreating in the second half of the year. Previously, the reigning high of $470,000 was posted back in August of 2005.
Entry-level homes, or homes priced below $400,000, currently stand with 35 percent fewer properties available on the market compared to last year at this time. This also translates to approximately one month of supply based upon the current rate of sales. New open escrow and closed sale numbers continue to drop as a simple result of fewer homes available for purchase. The number of homes available for sale below $400,000 on June 30 by county are as follows:
Sacramento County Homes for Sale: 829
El Dorado County Homes for Sale: 250
Placer County Homes for Sale: 108
Yolo County Homes for Sale: 39
The move-up market — homes priced between $400,000 and $750,000 — does offer more potential with 1.8 months of available inventory based upon the current rate of sales. Consequently, new open escrows were up 8 percent last month compared to June of 2018 and more than 5 percent for the entire second quarter when compared to last year. For homes above $750,000, sales were up 17 percent for the month of June and 14 percent for the second quarter compared to 2018.
“Many things have changed when considering the health of the greater Sacramento housing market,” says Shea. “Two to three months of inventory now reflect a balanced market where four to six was the previous indicator. Although prices have steadily increased, high employment numbers, upward pressure on wages and downward pressure on mortgage rates continue to provide a level of affordability for locals. There seems to be no weakening in the Northern California economy and the San Francisco migration continues to flow. The local housing market will no doubt remain very busy for the foreseeable future.”
About TrendGraphix, Inc.
TrendGraphix, Inc. is a real estate reporting company based in Sacramento that uses local Multiple Listing Service (MLS) data to provide highly-visual market statistical graphs to real estate brokers, agents, and MLS/Realtor associations across the country. TrendGraphix’s programs are currently used by tens of thousands of agents in more than 250 brokerages in 48 states. For more information about TrendGraphix, visit www.trendgraphix.com.