A Tale of Two Houses (New and Existing)

August 2007, New Home Sales and Existing Home Sales figures differ.

Existing Home sales in Yolo County remain worse than sluggish, but prices seem to be holding steady. While August saw a drop of almost 35% in the number of existing homes sold, the median price fell just 1% from where it was a year ago. Good news for homeowners in the area.

New Construction - On the other hand, the number of new homes sold in August fell just 13% from last year and was actually up substantially from the low in July. This was no doubt spurred by the price cuts and promotional offers made by new home builders with excess inventory. While the number of sales was down 13%, the median price for new homes was also down down 13%.

My own experience is that buyers are in control now, with a large inventory of homes from which to choose.

Sellers can still find a willing buyer, but the home must be priced right to sell quickly. If buyers thinks the seller is asking too much, they move on quickly to find a more motivated seller.

Over the summer (from April to August), the total number of homes sold each month has actually increased, but at a cost. The median home price has dropped almost $30,000 during that time.

This reflects the impact of two types of sellers in our market. One is the the relocating seller (frequntly a family) that appears during the summer, eager to sell and get relocated to another town before the start of the school year. The second is the investor in student rental housing. These homes tend to come on the market after the end of the academic year at UC Davis, when students return home or graduate and move on.

The two combine to bring an influx of homes on to the market in the May to August time frame. These are motivated sellers working against a time deadline, or they are investors, frequently absentee owners, that don't have an emotional attachement to the property and just want to get out of the investment and can be flexible with the price. This results in the drop in median prices realized over the summer combined with an increase in total escrows closed.

Below are some current statistics which reflect the health of the housing market in Yolo County and Sacramento County. Information includes the number of homes sold year-over-year and the median price of homes sold year-over-year.

Notice how the number of existing homes sold is down a similar amount in both Sacramento and Yolo County, and while the median price is down 14% in Sacramento, prices are holding up in Yolo County by comparison.

Existing  Homes

Yolo County

August 2006 - 173  Homes Sold,  Median Price =  $420,000

August 2007 - 113  Homes Sold, Median Price =  $416,000

Number of Homes Sold is down 34.7%

Median Price of Homes Sold is down 1%

Sacramento County

August 2006 - 1,707 Homes Sold, Median Price = $360,000

August 2007 - 1,146 Homes Sold, Median Price = $310,000

Number of Homes Sold is down 32.9%

Median Price of Homes Sold is down 13.9%

All Homes

 
Yolo County

August 2006 - 268  Homes Sold,  Median Price =  $412,000

August 2007 - 200  Homes Sold, Median Price =  $391,500

Number of Homes Sold is down 25.4%

Median Price of Homes Sold is down 5.0%

Sacramento County

August 2006 - 2,335 Homes Sold, Median Price = $360,000

August 2007 - 1,527 Homes Sold, Median Price = $312,250

Number of Homes Sold is down 34.6%

Median Price of Homes Sold is down 13.3%

Statistical Data Source:  Sacramento Bee, September 14, 2007

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