In Sacramento's Real Estate Market, Home Buyers Struggle to Find a Home

Sarah, not her real name, is retired and just sold her home in the Bay area. She is in a position to pay all cash for a home and prefers to live around other seniors in Sacramento. I suggested an area of Natomas called Heritage Park. This is an active adult community for people over the age of 55.

We toured 5 homes yesterday, one of which was a foreclosure. Now, Sarah really doesn't want to buy a bank-owned home. The problem with foreclosures is many of them need repairs. She also does not want to wait for short sale approval on a short sale.

After tour, Sarah's daughter asked me if there were any single story homes for sale in Natomas, near Heritage Park. I ran a search on that ZIP, looking for homes priced under $350,000. I found 5. Two we had already toured. Two were not yet built. One was not suitable. I looked in Gold River, too. But none of those was newer homes.

It pained me to advise Sarah that she either choose among the 5 we toured or rent for a while. This is the reality of the Sacramento real estate market.

Above is the Trendgraphix chart for August of 2009, covering all areas in Sacramento County over the past 15 months. You can easily see that inventory is continuing to drop. In June of 2008, we had 8,524 homes for sale. Today, that number is 3,281. Here is the percentage breakdown of homes that sold last month by price point:

• Under $200,000: 54%
  
• Between $200,000 and $400,000: 41%
  
• Over $400,000: 5%

I'm seeing a bigger increase in the number of homes selling between $200K and $400K. For most of the year, the pressure was on the under $200,000 market, but now it is shifting to a higher price point.

Another buyer called me last night to say she wants to buy a home in a certain Elk Grove ZIP code. Nothing fancy, just a two-story with four bedrooms. Needs to close soon, so no short sales. Do you know how many homes she has to choose from in her price range? Two. Exactly two.