What's Going on in the Market??

Dated: March 27 2020

Views: 252

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So, what’s happening with the current market?  Is the pandemic affecting sales activity and home values?  In all reality it is too soon to tell.  But I was curious to see if the pandemic has impacted the real estate market, so I decided to run some stats to see if there were any noticeable changes in the market.  Granted we are still in the early phases of the pandemic as the mandate to “shelter in place” was announced on March 20th if I remember correctly.  However, the news of the virus and its global impact and concerns have been known since late February, early March and I would assume some buyers may have decided to limit their possible exposure and pulled out of the market at that point.  Similarly, I assume some sellers probably decided not to list their home until more is understood about the virus.  This is a limited set of data as we are not all the way through the month of March and only time will tell how the virus will impact our economy and the housing market. 

Here is a breakdown county by county looking at pending sales, listings, inventory levels, number of sold homes and both the median and average price of sold homes in March 2020 versus March 2019. 

 

NEVADA COUNTY

Pending sales for March 2020 have nearly been cut in half from March 2019.  While the number of listings has fallen only slightly.  The months of inventory has increased by one month from March of 2019.  The number of closed sales are dropped nearly 37% from March 2019,  Granted we are not all the way through March 2020 but there have only been 83 sales to date, and I doubt that the next seven days of data will get us close to 131 sales of the previous March.  March 2019 has an average of 4.22 sales per day while March 2020 has only 3.5 sales per day.  The good news is that values have increased year over year.  The average sales price is up 4.8% year over year While the median sales price only increased 3.6%. 

 

March 2020

March 2019

Pending Sales

84

157

Listings

397

428

Months of Inventory

4.3

3.3

Sold

83

131

Average Sold Price

$455,000

$434,000

Median Sold Price

$420,000

$410,000

 

 

 

 

 

PLACER COUNTY

Placer County’s pending sales are down 28% from March of 2019.  However, so are the number of listings which decreased 23% which is close the 28% decrease in pending sales.  Inventory levels have ticked up slightly but not significantly.  Overall sales are down 34%.  The average sold price has remained mostly the same with March 2019 slightly higher than March 2020.  However, the median sales price is up 2.3% year over year. 

 

March 2020

March 2019

Pending Sales

374

524

Listings

711

932

Months of Inventory

2.3

2

Sold

311

474

Average Sold Price

$539,000

$542,000

Median Sold Price

$486,000

$475,000

 

Sacramento COUNTY

Sacramento County also showed a decrease in pending sales between March 2019 to March 2020.  Pending sales were down 32%.  However, Like Placer County there were more homes for sale in March 2019 than March 2020.  The number of listings available in Sacramento County dropped 34% from March 2019 which is similar to the drop in the number of pending sales (32%).  The months of inventory held steady for the most part with a slight uptick in inventory levels in March 2020.  The number of sold properties declined 39% from March 2019 which again is very similar to the drop in pending sales (32%) and the drop in available listings (34%).  Again, some good news, Sacramento showed some solid price gains year over year with an increase of almost 7% based on the average sold price and an 8% increase based on the median sold price. 

 

March 2020

March 2019

Pending Sales

1006

1483

Listings

1318

2009

Months of Inventory

1.7

1.5

Sold

798

1314

Average Sold Price

$432,000

$405,000

Median Sold Price

$395,000

$365,000

 

El Dorado COUNTY

The number of listings available in El Dorado County is relatively unchanged between March 2019 and March 2020.  However, pending sales are down nearly 25% from March 2019.  Again, inventory levels in El Dorado County are relatively unchanged with only a slight uptick in March 2020.  The number of sold properties decreased 32% between March 2019 and March 2020.  Luckily, home values in El Dorado County are up year over year with the average sold price increasing just under 1% and the median sales price increasing 6.6%.   

 

March 2020

March 2019

Pending Sales

176

230

Listings

608

625

Months of Inventory

4.3

4.1

Sold

142

209

Average Sold Price

$571,000

$567,000

Median Sold Price

$533,000

$500,000

 

I am no statistics expert by any means, but I do love to read about them and try to understand the story they tell.  Based on my research above I don’t see any significant impact caused by the pandemic to date.  The declines in sales and pending sales in Placer County and Sacramento County appear to be due to lower inventory levels.  Nevada County and El Dorado County also have lower sales levels and lower pending sales than in 2019.  However, I believe most of what we are seeing in Nevada County and El Dorado County these two mostly rural counties can be attributed in large part to the fire insurance issues that are affecting both counties.  While Placer County does have a decent amount of rural homes most of the housing stock in located in my suburban type areas with less fire hazards and therefore less insurance issues.  At least that is my take and I could certainly be wrong.    

In terms of the role realtors are playing in this pandemic The California Association of Realtors have given us some insight on the actions we should or should not be taking.  The California Association of Realtors is currently working to have realtors designated as essential workers but to date that is not the case and they have instructed agents to follow the “the shelter in place” mandate for the time being.  They have advised agents to use virtual meetings and virtual tours to show homes and meet with clients which will certainly slow down the pace of sales.  Additionally, the whole process of selling or buying a house has been and will continue to be hindered.  Many appraisers are choosing to heed the mandate and are not inspection/appraising properties while those that are in inundated with work and are two weeks behind in many cases.  Lenders are still working although many from home which will certainly slow things down.  Similarly escrow companies are in the same boat as agents, lenders and appraisers.  To my knowledge the county recorders office is still in business.  If you are looking to buy or sell right now it is doubtful that any of the contractual timelines will be fulfilled on time.  We will all have to exercise some patience and work through the process. 

The California Association of Realtors has also released an additional addendum to the purchase contract.  The Coronavirus Addendum… Duh, duh, duh….  The addendum has two sections.  The first section allows the buyer and seller to agree to postpone the close of escrow by up to 30 days or whatever amount both buyer and seller agree to, given the unforeseen circumstances created by the pandemic.  After the agreed upon time frame has expired it allows either party to cancel the agreement and for the buyer to receive their earnest money deposit back. 

The second section allows the buyer and seller to agree that if the buyer’s inability fund and close escrow is due to loss of income from the pandemic then the buyer shall receive their earnest money deposit back even if they have released all contingencies. 

There are plenty of was to purchase/sell a home via technology, virtual tours, photos etc.  However, I think there will be many buyers that won’t be comfortable making such a large purchase virtually.  If I was a seller and wanted to sell my home, I think I would hold off which is exactly what I am doing with one of the homes I recently renovated.  Perhaps I am shooting myself in the foot though if the market decides to take a dump in the next few months.  Still the overall market fundamentals were solid prior to the pandemic so my hope is that the demand will for housing will still be there once the pandemic clears up.  As for buyers this may be a great chance to get a deal.  I am sure there are some sellers out there that need to sell or feel driven to sell due to the uncertainty.  If I was a looking to buy right now, I would keep my eyes open!  Good luck! 

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Justin Cooper - CAL Dre #01911357

Justin Cooper is a 14-year Real Estate veteran based in the Greater Sacramento region. However, his career has taken him to numerous markets around the country. Justin prides himself on superior custo....

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