In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Thursday, June 12, 2014

Sacramento Housing in May: Total Sales down 11% Year-over-year, Equity Sales up 8%, Active Inventory increases 84%

by Calculated Risk on 6/12/2014 07:16:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (equity, 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 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 May 2014, 14.7% of all resales (single family homes) were distressed sales. This was down from last month, and down from 29.1% in May 2013. This is the post-bubble low.

The percentage of REOs was at 7.7%, and the percentage of short sales was 7.0%.

Here are the statistics.

Distressed Sales 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 83.7% year-over-year in May. 

Cash buyers accounted for 20.5% of all sales, down from 33.6% in May 2013, and down from 21.9% 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 10.6% from May 2013, but conventional equity sales were up 7.5% 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.