Resale Housing Supply Hitting Rock Bottom
August new open escrows jump 32 percent compared to last year.
Closed home sales reported year to date across the greater Sacramento region are now down 6 percent compared to last year at this time. This figure demonstrates a remarkable recovery from the pandemic-induced market disruption during the typically peak selling months of March, April and May. Continued market momentum is surely expected, as during the month of August, 3,236 resale properties were placed under contract throughout the market area. That new open escrow number reflects an 8 percent lift over July’s count and a 32 percent jump compared to August of 2019. New opens for June, July and August combined reflected a 23 percent increase versus the same time frame last year.
On the other side of the spectrum, resale housing supply suffered a 9 percent decrease during the month of August, and now remains a tenuous 52 percent lower than last year at this time. The market is thus viewed as precariously tight, having less than 1 month of supply based upon the current inventory level and persistent rate of new sales. The entry-level, or homes priced below $400,000, is surely in dire straits. There are 65 percent fewer homes available for sale compared to August of last year. This market information is presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.
Due to the restrained supply and tenacious buyer demand, upward pressure on price appears to be clearly evident due to a few additional metrics. The average closed sale price of $538,000 for August represents yet another record. The average price has now seen three consecutive months of significant advancement after tracking closer to $482,000 for the previous three. The average and median sales prices over the past three months currently exhibit approximately an 8 percent increase versus last year at this time.
“The move-up and upper-end price points remain remarkably strong and continue to reveal steadfast buyer confidence,” says Pat Shea, president of Lyon Real Estate. He added that “the $400,000 to $750,000 price range saw an 18 percent increase in new open escrows last month versus August of 2019. Above $750,000, there was an extraordinary 77 percent jump versus last year continuing what is now a 3 month surge of high sales activity.”
“Traditionally, August has been a softer sales month due to last hurrah summer vacations and back-to-school priorities,” says Shea. “This year, the pandemic delayed and perhaps ultimately fueled, our peak selling season. The sales trends suggest an even greater stream of eager buyers seeking the excellent home values in our region and inexplicably low mortgage rates are certainly aiding their cause. You can surely expect strong sales numbers to continue throughout the remainder of 2020 if, and only if, more new listings come to market.
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.