by Bill McBride on 11/18/2016 02:48:00 PM
Friday, November 18, 2016
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 October, total sales were up 4.2% from October 2015, and conventional equity sales were up 4.4% compared to the same month last year.
In October, 4.4% of all resales were distressed sales. This was down from 4.5% last month, and down from 7.0% in October 2015.
The percentage of REOs was at 2.0%, and the percentage of short sales was 2.4%.
Here are the statistics.
From SAR: Pending sales drop, may indicate slow month for November
Pending sales, those that are already in contract, dropped for the month of October. Month to month, pending sales decreased 16.4%, from 1,444 to 1,207 units. Pending sales are generally an indicator of activity for the upcoming months, when many will be counted as sold once the escrows close. Compared with October 2015, pending sales totaled 1,240.Click on graph for larger image.
Inventory remains tight throughout Sacramento County with the total Active Listing Inventory decreasing 10.2% from September to October (2,774 to 2,492). Compared to October last year, the current number is down 7.6% (2,697 units). The Months of Inventory decreased, dropping slightly from 1.7 Months to 1.6 Months. The Months of inventory for October 2015 was 1.8.
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 7.6% year-over-year (YoY) in October. This was the eighteenth consecutive monthly YoY decrease in inventory in Sacramento.
Cash buyers accounted for 12.1% of all sales (frequently investors).
Summary: This data suggests a normal market with few distressed sales, and less investor buying - but with limited inventory.