RSS Feed by Calculated Risk on 3/12/2014 02:25:00 PM
Wednesday, March 12, 2014
Sacramento Housing in February: Total Sales down 17% Year-over-year, Equity (Conventional) Sales up 18%, Active Inventory increases 88%
Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (conventional, REOs, and short sales). For a long time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.
This data suggests healing in the Sacramento market, although some of this is due to investor buying. Other distressed markets are showing similar improvement. Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.
In February 2014, 19.1% of all resales (single family homes) were distressed sales. This was down from 19.5% last month, and down from 43.8% in February 2013.
The percentage of REOs was at 6.6%, and the percentage of short sales was 12.5%.
Here are the statistics.
Click on graph for larger image.
This graph shows the percent of REO sales, short sales and conventional sales.
There has been a sharp increase in conventional sales over the last 2 years (blue).
Active Listing Inventory for single family homes increased 87.8% year-over-year in February.
Cash buyers accounted for 26.5% of all sales, down from 26.6% last month (frequently investors). This has been trending down, and it appears investors are becoming less of a factor in Sacramento.
Total sales were down 17.2% from February 2013, but conventional sales were up 17.8% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.
As I've noted before, we are seeing a similar pattern in other distressed areas. This suggests what will happen in other areas: 1) Flat or declining overall existing home sales, 2) but increasing conventional sales, 3) Less investor buying, 4) more inventory, and 5) slower price increases.
