In many area markets, prices have continued to decline into 2008, but the worst year for the number of sales was really last year, 2007.  Last year, buyers were watching prices fall and hesitant to dive in — this year buyers have begun to feel that prices have fallen low enough to make buying worthwhile.

The return of the buyers to the market this year has been especially pronounced in Sacramento County, where I recently reported that Metrolist MLS agents and brokers have already sold more homes by mid August of 2008 than we have in all of 2007.  The same is not true in Placer County, but sales are nevertheless up.  Looking at unit sales in January through July of each year, for example, we find that 1,957 homes sold in 2007 in Placer County, while 2,467 homes sold in the same period in 2008.  This works out to a unit volume increase of about 26%.

If Sacramento County has already sold more homes than in all of 2007, and if Placer County is experiencing a healthy increase in sales, El Dorado County is the laggard.  Sales through July are down about 5% from last year in El Dorado County, and the slow unit sales there have kept inventory at high levels — currently around 12.7 months of inventory compared to 6.7 months in Placer and County 5.3 months in Sacramento County.