The big end of Summer story is the huge jump in inventory over the past three months. The beginning of the year, listings were rather flat, with little change between December of 2013 (2,315 homes) and March (2,412). Then the spike in listings began, until in August we had 3,450 homes on the market, a jump of over a thousand homes from the March numbers.
How big is the inventory bubble? The number of homes for sale in August is up more than 29% over a year ago, and a whopping 41% quarter on quarter. While closings have remained steady, as we predicted back in our June Sacramento Currents, the glut of inventory has caused Closed Sales Prices to peak in July, and drop off a bit in August, to a seasonally-adjusted $304,000. With mortgage rates stable, and prices flattening, buyers can take their pick of eligible homes, and they can afford to buy when the time comes. Buyers, however, are not as hungry as they were a year ago, although closings are steady over the past few months, they are down 17.5% from this time last year.
Leading the strongest markets right now continue to be Sacramento-Midtown and Davis.
Patient buyers will be rewarded with particularly juicy properties. Savvy sellers need to price their properties correctly to achieve their goals.
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Jack McLaughlin is a market analyst and president of My Broker Donates.