December 24: As I mentioned in a post yesterday, I found some unusual patterns in the market trends in Orangevale California for the fifteen month period through November 2011.
Ordinarily, such a pattern would not have caused me to puzzle over it, but when compared to the profiles of surrounding towns, Orangevale’s looked a bit different and I wondered why.
This will be a very long post, because I will try to explain the many factors that must be considered to understand the market trends in any area.
First of all, look at the profile of for-sales, solds (closed escrows), and pendings (escrows opened) for the entire County of Sacramento. There is an unbroken progression of reduction in inventory (light green bars) and increases in new escrows (red line) for the 15 month period shown.
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Then check out the same information for Fair Oaks, California – the next door neighbor of Orangevale in northern Sacramento County. The profile is not quite as perfect, but the anomalies are slight and attributed to some very old small homes in bad shape being sold one month and some million dollar plus homes being sold another month.
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Most of the other towns surrounding Orangevale look pretty much the same as those above. The inventory of homes for sale is down, while solds and pendings are up. Homes are selling faster, and the average selling price is around 90-93 percent of listing price. It has been a steady progression toward market improvement, without any hiccups in the profiles. But now look at Orangevale.
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It is not drastic, but you can see that the steady progression down with inventory and up with sales has a couple of bumps the other direction and the picture is not as clear from this graph. This one shows ALL homes for sale and sold in Orangevale, in all price ranges.
When you break it down to looking at just those homes priced between $200,000 and $399,999, you can see where the issue was on those months. That is shown in the graph below.
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For some reason, there were more homes placed on the market in that price range in April and in August this year, making the bumps in inventory, while opened and closed escrows did not go up in the same amount. This occurs simply because of the lag time in statistics – the homes put on the market one month are not necessarily the same homes that are sold that month. You can see that a month or two following each jump in inventory, there is a jump in sales.
Orangevale is a very mixed community, with some very large rural properties, some small tract homes, and every combination between, plus some very expensive upscale estates. Evaluating the market by looking at just one month or even just one profile can be misleading. We must study a period at least a year long and look at the numbers from different perspectives and comparing them to other communities - then they can be understood.
Here are some more Orangevale graphs reflecting information from different angles. In each of these, ALL Orangevale homes are included - not just a specific price range.
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This looks at inventory in a different way. While the first charts show how many homes are placed on the market, this one shows how many months of inventory is sitting on the market each month. This includes new listings, homes that have been sitting for awhile, and is calculated by factoring in the average number of days on market.
Look at the big improvement since September of 2010! At that time there was such a backlog of homes that weren't selling, that there was 6 months worth of inventory on the market. Now there is less than 2 months of inventory. If you are considering selling, now may be the time!
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Once again you can see some anomalies that don't follow the pattern of the rest of the year. The blue line and red triangles show the percentage of the listing price that homes sold for that month, on the average. In other words, last month, homes sold for an average of 94 percent of their listing price, which is very good. Another reason why homeowners might start thinking about selling if they have been putting that off.
The pink bars show the combined days on market for the average home from original listing date until it closes escrow. The reason I'm using a "combined" days rather than just days is because it is a more accurate picture.
Suppose I list my home with agent A and there is no activity after 60 days, so I take my listing to agent B, after it is off the market for a few days. Just showing days on market would reflect only agent B's efforts. Combined days would show you how long I've been trying to sell my home before finally getting it sold. That is the information you really need to know - whether you are a seller or a buyer.
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I am including the above graph, but I think it can sometimes be misleading. The price per square foot for which a home sells can depend on many factors. It may be because of the neighborhood in which it is located, but it is also due to such factors as condition, upgrades, age, size, etc.
Two similar homes in the same neighborhood may appraise and sell at different prices because of factors that cannot be seen by driving by or even often just by looking at photos. For example, one home might have kitchen cabinets that are broken, with missing doors, and the stove that is inoperable, while the one next door might have had a complete kitchen remodel with all new everything.
To understand the market in your area, there are many factors to consider in determining the correct price to offer if you are buying or at what price to list if you are selling.
If you are a seller, follow your Realtor’s advice on preparing your home for sale, and you should be able to get it sold quickly and for the appropriate market price. Remember that your buyer will be getting an appraisal that will determine the loan he can obtain, so if you overprice your home, it will not appraise and you might not be able to close an escrow that opens, so that is a waste of your time. Ask your Realtor to provide you with comparable sales information and market trends, so that you can properly price your home.
If you are a buyer, consult a Realtor familiar with the area in which you are interested, and ask her to guide you through the process of getting preapproved for a loan amount, searching for homes in the price range that your loan will cover, and making the right offer, with price and terms that will be comfortable for you.
There are many programs available for low down payments, down payment assistance, energy upgrades, and you might even qualify for a grant (free money you do not have to repay). Your Realtor and lender can find all the programs that will be right for you, and some of them can be combined to get you great deals.
This is a great time to buy, but it is also a great time to sell! Call a local Realtor and ask for a free consultation to review your options.
If you are in the Sacramento County area, give me a call and I will be glad to meet with you.
Merry Christmas to all!
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Susan Neal "Happy clients make me happy."
Broker / Realtor
Century 21 Noel David Realty
Fair Oaks, California
Full time real estate services in Fair Oaks CA, with friendly professionalism, 30+ years experience.
I work hard to give my buyer or seller a low-stress transaction.
For all your real estate needs or questions, call me at (916)705-8951 or visit my website at www.SusanNealFineProperties.com.
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to understand, so I began working on a market trends report for that town that I can post here, on other sites, and in a newsletter.
6826 Hazel Avenue, Orangevale, CA.
with Santa will be available until the 7:30pm closing. 
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