Thursday, February 11, 2016

Sacramento Housing in January: Sales up 3.9%, Inventory down 25% YoY

by Bill McBride on 2/11/2016 08:22:00 PM

• At 8:30 AM ET, Retail sales for January will be released.  The consensus is for retail sales to increase 0.2% in January.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for February). The consensus is for a reading of 92.5, up from 92.0 in January.

• At 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for November.  The consensus is for a 0.1% increase in inventories.

• At 11:00 AM, the New York Fed will release their Q4 2015 Household Debt and Credit Report

On Sacramento:  During the recession, I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales). For a few years, not much changed. But in 2012 and 2013, we saw some significant changes with a dramatic shift from distressed sales to more normal equity sales.

This data suggests healing in the Sacramento market and 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 January, total sales were up 3.9% from January 2015, and conventional equity sales were up 11.3% compared to the same month last year.

In December, 9.2% of all resales were distressed sales. This was up from 7.6% last month, and down from 16.6% in January 2015.

The percentage of REOs was at 4.3% in January, and the percentage of short sales was 4.9%.

Here are the statistics.

Sacramento 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 (equity) sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.

Active Listing Inventory for single family homes decreased 25.0% year-over-year (YoY) in January.  This was the ninth consecutive monthly YoY decrease in inventory in Sacramento.

Cash buyers accounted for 18.4% of all sales (frequently investors).

Summary: This data suggests a more normal market with fewer distressed sales, more equity sales, and less investor buying.