Home Prices Up as Inventory Falls
With the largest year over year decline in inventory the Sacramento area housing market leads the nation with a 68 percent drop in available homes for sale. Nationwide, at the end of 2012 inventories were down 17.3 percent from the previous year. Other California cities in the top five include Stockton (-65%), Oakland (-64%) and San Jose (-52%).
With homebuyers returning to the market after foreclosures or short sales combined with investors and first time buyers the demand for housing has increased in the Sacramento area at a time when inventory is at its lowest point. Using the most elementary economic theory of supply and demand, as supply goes down and demand increase we are seeing price increases equal to what happened in the early 2000's.
One Realtor we talked to said she was, "...pulling her hair out trying to get my buyers a home." Listings are being sold fast, often with multiple over asking price offers. As a result it is a seller's market and we are seeing bizarre "rules" on some listings. These include, very short viewing windows, such as "the home will be open Wednesday from 2 to 4 PM only." We have also seen listings where the home is not available to view until an offer is accepted. Finally, many buyers are being instructed they must have lender pre-approval letters from specific loan officers. The problem being you jump through all these hoops and don't even get a response back on your offer. When a listing agent stops returning calls and emails you know making an offer is a waste of time!
Until we start to see more homes come on the market, it is going to be difficult for buyers in the under $400,000 price range.
If you want more information on the Sacramento housing market, feel free to call me at the MagnumOne Realty office in Roseville (916-899-6571) or send me an email to firstname.lastname@example.org.