Today I’m sharing our Sacramento, Placer, and El Dorado counties November real estate market update. Let’s dive right into the numbers.
In the first graph at 0:50 in the video above, you can see our sales, new listings, and new pendings. When we compare the August, September, and October 2021 numbers to those same months in 2020, we see that inventory has increased only 3%. In January of this year, we had extremely low inventory at about 1,000 homes, and that caught plenty of media attention.
Since the beginning of the year, our inventory has doubled to around 2,500, but it’s crucial to note that we still have very low inventory. Commonly, between all three counties, we’d have roughly 5,000 to 6,000 homes for sale. Back in 2006, when the market tipped over, we had approximately 18,000 homes for sale.
Compared to a year ago, closed sales have fallen 12.9%. The reason for that likely lies in price per square foot. The next graph at 2:45 in the video shows how our price per square foot has changed from August of 2020. You can see that the price per square foot has grown by 21.7% from a year ago. That corresponds to the national trend of about 20% over the last 12 months.
Those are not sustainable escalating numbers. That’s probably why we’ve seen fewer sales because when prices go up, people’s incomes and savings don’t climb at the same rate. We’re going to see fewer buyers at every price point.
“Compared to a year ago, closed sales have fallen 12.9%.”
We’re still in an especially strong seller’s market, but going into 2022, we’ll have more inventory than we did last January, so I would not expect to see another 20% price inflation next year. We may see another 10% jump, which would still be a huge price uptick. A regular, solid market sees maybe a 3% to 4% spike year to year. We’re still predicting that we’ll have a slew of sales.
We’re incredibly low on inventory, which is great news for sellers. However, if you’re a buyer, we also still have exceedingly low interest rates. Interest rates have nowhere to go but up at some point. Statistically, if interest rates hike only 1% to about 4% (which is still low), buying power goes down by 10%.
I’m predicting that we’ll still have a strong seller’s market in 2022. If you have any questions or would like me to drill down the numbers in just your county, city, or ZIP code, please call, text, or email me. I would love to help you.
