Forsesthill is a small town in Placer County, with few units selling every month. The small sample size tends to throw off statistical generalizations you might want to make. Nevertheless, let’s take a look at the numbers we do have and see how Foresthill is doing in the first quarter of 2008.

Seven units sold during this quarter, at an average sale price of $292,071, down from eleven units last year at an average sale price of $393,000. This looks like a very dramatic drop in price on the face of it, until you realize that this year’s crop of homes was almost 25% smaller than last year’s. The net result is that sold price per square foot fell only 13.6%.

There are forty-nine homes currently for sale through the MLS in Foresthill. Of these, two are bank foreclosures (4.1%) and five are short sales (10.2%). This year of the seven homes that closed, two were foreclosures (28.6%).

With fifty-three homes selling yearly in Foresthill, the forty-nine available homes means that there is 11.1 months of unsold inventory.

I spend a lot of time writing about the numbers in different areas, and yes, I can assure you:  statistics really are pretty dry.  Sometimes the results you get are entertainingly obvious, however.  For example, last year Granite Bay’s homes lost only 9.2% of their (sold price per square foot) value, as compared to a 35% drop in Lincoln.  Well, see, that’s obvious.  Everybody who has money enough to live in Granite Bay would want to live there.  Why not?  The schools are great.  The houses are gorgeous.  You’re near the lake.  I love Granite Bay.  Everybody loves Granite Bay.  What’s not to love?

In the first quarter of 2008, the average buyer spent $913,000 for their home, 3.6% more than last year’s average of $880,932.  Prices were falling, however, so that 3.6% increase in price fetched a home 3521 square foot home, 14.2% bigger than last year’s 3084 square feet.  As a result, as we mentioned above, sold price per square foot fell 9.2% from first quarter of 2007 ($285.65) to first quarter of 2008 ($259.30). 

If homes are holding their value much better in Granite Bay than in other areas, the flip side of that equation is that far fewer Granite Bay homes are changing hands.  Last year, twenty-six homes per month sold during the first quarter.  This year that number is down to eleven.  As a result, inventory is creeping up in Granite Bay, and currently is at 11.4 months.

This market update covers West Rocklin 95765, and East Rocklin, 95677, over the period from the first quarter of 2007 to the first quarter of 2008.

From the first quarter of 2007 to the first quarter of 2008, home prices dropped substantially in Rocklin. In the first quarter of 2008, the average home sold for $383,233 in Rocklin, down 17.3% from the year before, when the average selling price was $463,240.  The median sale price fell about the same amount, 17.8%, from $432,000 in 2007 to $355,000 in 2008.  With a larger group of homes being sold this year, sold price per square foot fell a little bit more, about 19%, from $209 per square foot last year to $169 per square foot this year.

Short sales sold moderately well in Rocklin, but still only reflected a fraction of the short sales in inventory.  15.1% of the sales in the first quarter of 2008 were short sales, but 30.1% of homes on the market are short sales.  In contrast, 42.4% of the homes that sold in the first quarter were bank foreclosures, but only 10.9% of the homes in inventory are foreclosures.

Related Links

Roseville Real Estate Market Update

Homes for Sale in East Rocklin

Homes for Sale in West Rocklin

General Home Search

Well, I don’t want to embarrass master builder so-and-so by printing his name, but one of the details he didn’t oversee was hiring a listing agent who proofreads.

Careful attention to detail, indeed.

In the first quarter of this year, the average home sold in Auburn for $431,818, down 11% from first quarter of 2007.  At the same time, with buyers purchasing a house that was eight per cent bigger than last year, sold price per square foot fell 17.6%, from $259.15 in 2007 to $213.67 in the first quarter of 2008.  This year’s average home was 2021 square feet in size and was on the market 104 days before being sold (i.e., 104 days between being listed and when a purchase agreement was accepted).

In the first quarter of 2007, 3.7% of the homes that sold were bank foreclosures, and 1.2% were short sales.  This year those numbers had risen to 24.5% and 3.8%, respectively.

Unit volume was down in Auburn in 2008, with 53 homes sold in the first quarter compared to 82 in the first quarter of 2007.  Partly as a result of these sluggish recent sales, inventory is fairly high in Auburn at 10.1 months.

One of the indicators that tells you a lot about how a particular real estate market is doing is the amount of outstanding inventory there is. When we talk about real estate inventory, all this means is the number of homes that are for sale divided by the average number of homes that sell every month. Thus, for example, if there are 100 homes for sale in a given area and 25 homes sell every month in that same area on average, there are four months of inventory.

When inventory levels are below six months, especially if there are few distressed sales (short sales and bank foreclosures), we say that an area is experiencing a seller’s market. As I’m sure you’ve heard if you haven’t been living on Mars, most of Placer County and Sacramento County are currently in a buyer’s market.

When we look at the Placer County numbers, one interesting result we find is that the areas with the most distressed sales have the lowest inventory numbers. On one end of the spectrum, Foresthill and Granite Bay have high inventory levels — above eleven months — but the lowest percentages of active short sales and foreclosures. On the other end, Roseville has the lowest inventory number of any Placer County area we looked at — seven months — but also has the highest number of foreclosures and is second only to Lincoln for short sales.

This high foreclosures means low inventory is not a rule that applies universally, however. Outside Placer County it breaks down completely. Sacramento County overall has higher numbers for foreclosures and short sales than any area we looked at in Placer County, yet inventory is high at 10 months. And in a true buyers market, we find extremely low inventory coupled with low levels of distressed sales.

The following table shows how the current inventory breaks down for several areas in Placer County, and shows how this compares to Placer County overall and Sacramento County. We include current inventory as well as the percentages of current inventory that are bank foreclosures (REOs) and short sales.

In the first quarter of 2008, Roseville’s home prices declined moderately compared to other Placer County communities.  In Roseville in the first quarter, the average home that sold was 2095 square feet and sold for $369,019.  Square footage was up 6.7% from last year’s average of 1963 square feet, while the average price was down 14.4% from last year’s average of $430,945.  As a result, sold price per square foot fell 19.8% during the period, from $219.53 in the first quarter of 2007 to $183.39 in the first quarter of 2008.

Unit volume was down slightly (2.5%), with 324 units selling in the first quarter of 2007 versus 316 in the first quarter of 2008.

Whether this glass is half empty or half full for Roseville home owners depends on whether you compare your numbers to owners in Granite Bay, whose homes lost "only" 9.2% of their value during the same period, or to Lincoln, where prices eroded a huge 35%.

Most of the price drop in Roseville can be attributed to the brisk sale of bank foreclosures.  44% of the homes that sold in Roseville in the first quarter were bank foreclosed properties, and another 7.3% were short sales.  As in most areas, the savings for foreclosures are substantial.

Currently in Roseville, there are some 774 homes for sale.  Foreclosures make up only 15.5% of these, though they accounted for 44% of sales in the first quarter.  Approximate list price per square foot in Roseville is as follows:

Bank foreclosures:  $163.

Short Sales:  $178.

Non distressed sales: $211

Overall average:  $194.

Everyone with a computer or a television set probably knows that Placer County prices fell over the last year, and that more homes are in foreclosure this year than last.  The interesting question about the real estate market in Placer County is not whether prices have fallen, but by how much, and what do the numbers mean?  On the face of it, prices have fallen by some 30% from last year, but as I’ll argue in a minute, the real decline in value in Placer County depends on what specific area and type of home you’re talking about.  Not to minimize the decline in prices, in most areas the 30% drop is more illusory than real, and arises partly from the mix of properties that are still selling versus those where sales are slow.

Let’s look at the overall numbers first.  Placer County’s average home sold in the first quarter of 2008 for $369,647, down 27.2% from last year’s average sale price of $508,090.  Meantime the average sold price per square foot fell somewhat faster, 30%, from $235.44 last year to $164.73 this year.  The median sale price dropped 18.6%, from $430,000 to $350,000. 

So did prices really fall 30% in Placer County?  Well, yes and no.  What’s happening is partly a result of price decreases, and partly a result of the fact that where the prices are hardest hit, the market is showing more activity.  The best way to illustrate this is by looking at three areas as a table:

The price changes shown here are changes in sold price per square foot.

As you can see, the areas where prices fell the most are the areas where unit volume held relatively steady or increased.  In Lincoln, where prices fell 35%, 20% more units sold this year than last.  (Remember in school when your teacher said it’s always a few bad apples that ruin things for the rest of us?  She had Lincoln in mind).  Roseville, where prices fell 19.8%, was relatively unchanged in unit volume at a 2.5% decrease.  Meantime in Granite Bay, where prices dropped only 9.2%, unit volume was off by 57.7%.  Because of this, as you can see in the last two columns, areas where the prices fell the most made up a larger percentage of the overall sales in Placer County in 2008 than 2007. 

So how much is your home worth now compared to last year? 

Remember, statistics are always the general case — and the more general you make them, the more likely you are to be wrong about an individual house.  A computer generated comparative market analysis zeros in on your particular neighborhood and can give you a better idea.

There’s no mystery about who shot President Lincoln.  It was John Wilkes Booth, in Ford’s Theater.  Likewise, in the California town named after our unfortunate late president, there’s no mystery about what shot down the high prices.  Call it the credit crunch, the market meltdown, call it what you will.  The usual smoking gun is there in the form of foreclosure inventory large enough to account for roughly half of the sales, along with a few scattered short sales.

We’re doing something a little different this month and publishing quarterly figures instead of monthly, since it’s possible to start writing about first quarter results.  This report covers several MLS areas within and outside the city limits.  By zip code, it covers 95645 and 95648.

In the first quarter of this year, the average home sold for $347,434, down 29.2% from last year’s average of $490,949.  Buyers this year purchased a substantially larger home than last year, with the average home being 2,344 square feet as opposed to last year’s 2,152 square feet.  Taken together with the drop in price, this increase in size pushed the sold price per square foot down fully 35%, from $228.14 in the first quarter of 2007 to $148.22 in the first quarter of 2008.  The median sale price fell 20% from year to year, from $419,000 in Q1 2007 to $335,000 in Q1 2008.

Short sales and bank foreclosures, which accounted for only 3.9% of sales in the first quarter of 2007, made up 57.6% of sales in the first quarter of 2008.  Of those, short sales accounted for 10.3% of all sales, while bank foreclosures accounted for 47.3% of all sales.

One number that does show some signs of improvement in Lincoln from year to year is the unit volume.  Apparently a lot of buyers thought that the prospect of owning a 2,344 square foot home for just under $350,000 was reason enough to own, since unit volume increased 20.3% from 2007 to 2008. 

All in all I think Lincoln’s numbers reflect a heavily built up area on the outskirts.  Built up and bid up aggressively when times were good, Lincoln’s prices fell dropped like a brick during the downturn (recession, depression, meltdown — whatever).   But as in most areas, buyers will begin to return when they sense there’s a bargain to be had relative to the areas around it, and I think we’re starting to see this in Lincoln.