Sacramento Resale Home Market Shows Continued Stability

Sacramento Resale Home Market shows Continued Stability . . . . But There Are Still Questions

In the month of November there were 1,439 closed sales in Sacramento County, including the City of West Sacramento.  This is 277 fewer closed sales than October, 2009. What tells of future closings are the Pending Sales, i.e., new escrows. In November there were 1,247 new escrows opened compared to 1,582 opened in October.  This is a 21.1% decline from October to November. The tax credit extension was not announced until mid November so many of the pending sales in October were the result of buyers wanting to get their home purchase secured so they could qualify for the tax credit scheduled to end on December 1. This credit has now been extended to homes closed by June 30, 2010 and contracts entered into by April 30th. 

What is an interesting trend is that the type of sale has changed dramatically in the past year.  Last November REO (bank owned homes) were 71.2% of the closed sales, Short Sales were 11.5% and Conventional Sales were 17.1%.  In November, 2009, REO sales were down to 40%, short Sales increased to 21.5% and Conventional increased to 38.3%. 

The majority of the home sales continue to be under $400,000,  95.25% in November.  Of the sales over $400,000, 2.5% were in the price range $400,000-$449,999.  That leaves 2.25% of the total closed sales for November over $450,000.  Price continues to be the huge factor in getting a home sold. 

The unknown facts that will influence our market going into next year are:

1) Is there a shadow inventory of bank owned homes?  If so, how large is this inventory.

2) Will the current rate of unemployment improve or stabilize?

3) Will the State of California continue with the 3-day furlough policy?

4) Will credit standars be more rigid for potential buyers?

5) Will interest rates increase when the Federal Government stops supporting our current low interest rates?

6) Will the current high delinquency rate among borrowers translate into more foreclosures and more bank owned homes? 

These are questions that can be answered by Realtors who stay informed about market conditions and trends.  For more detailed information please contact me at rkitowski@surewest.net or visit the web site http://www.stepseachday.com

Richard Kitowski 

www.richard4homes.com

Our goal is to provide professional real estate services for home buyers and home sellers