Sacramento Real Estate Market Update | Home Buyers Snatching Up Best Deals
The Sacramento real estate market is getting busy while prices are still declining.
Prices have dropped at a rate of about 9%, albeit at a slower rate than we have seen over the last several years. “The slowing rate of price declines indicates that we are getting closer to the long awaited bottom of the market” says Jeff Werolin, Vice President for Morris Williams Realty. “The lower prices coupled with continued record low interest rates and a shrinking inventory of homes on the market is driving strong buyer activity.”
The supply of homes on the market has dropped 39% over the last 12 months. At the same time closed home sales are up 14% over 2010.
“This puts us in an interesting situation” says Werolin. “Increased demand and lower supply usually creates increases in home prices, or at least stability in pricing. However we are still seeing prices drop. The reason that prices are still declining while sales are increasing is due to the makeup of the homes being sold. Distressed properties account for 62% of the regions total sales, driving the continued slide in prices.” Distressed properties are priced at discounts of 5% to 10% less than traditional equity sales, making these an attractive option for buyers. With 11% of the homeowners in the region either behind on their payments or in foreclosure we will continue to see a high percentage of the homes for sale being in the distressed category for the foreseeable future.
Homeowners in neighborhoods with lower distressed property sales are holding on to their values better. For example in Folsom distressed sales only account for 49% of total sales and prices have only declined 6% in the last year.
