Overall in Placer County in August, sale of homes in all single-unit residential categories (single families, condos, halfplexes, etc.) were up 28.7% over last year, with 449 homes selling in August of 2008 compared to 349 in August of 2007.  August’s total was also higher than the running total for the last six months, of 404 units.

Of homes that sold in August, 193 (43%) were bank owned foreclosures, and 45 (10%) were short sales.  The remaining 47% were non-distressed sales.

The average selling price for a home in August was $369,127, down 28.6% from last August’s average of $516,782.  With the average size also declining slightly, sold price per square foot fell 25.8%, from $231.16 in August of 2007 to $171.42.  (This August’s average sized home was 2,153 in Placer County.)  The median selling price fell 21.7% from year to year, from $415,000 in August of 2007 to $325,000 in August of 2008.

Like Sacramento County, the last few months have seen healthy increases in demand.  Unlike Sacramento County, however, where unit sales finally cooled in August after several months of increases, in Placer County, sales continued to climb in August for the seventh month in a row.

There are currently 6.3 months of inventory in Placer County if you use the absorption rate of the last six months (404 homes per month).  More conservatively, using the last 12 months absorption rate of 330 homes per month, there are 7.7 months of inventory, with 2,530 units for sale.  Of homes for sale now, about 11.6% are bank foreclosures short sales, 30.6% are short sales, and 57.9% are non-distressed sales.

Fortunately, only .1% of all sales are rounding errors!

Sales have been up in Lincoln in recent months, with a large number of foreclosures selling (though fewer than I would have predicted).  In August, 85 homes sold in Lincoln, up 54.5% from last August’s volume of 55 homes.

Being further out than Roseville, Granite Bay, and the like, Lincoln is one of Placer County’s bargain addresses.  The average sold price per square foot was $146.35 in August, down 32% from last August’s average of $215.16.  (Compare Placer County as a whole, with an average of $171.42 per square foot in August, down 25.8% from last year).

At $307,000, the median home selling price in Lincoln Lincoln is down 24.2% from last year’s median of $405,000.  The average price of a home in Lincoln in August was $327,935, down 29.5% from last year’s average selling price of $464,970.

With 50.6% of sales in August being bank foreclosures, Lincoln’s foreclosure sales have outpaced the Placer County average of 43%.

Roseville’s sales volume continued to be strong in August, with low inventory.  However, prices continued to fall compared to last year.  Based on data available as of September 3, 182 homes sold in August, up 34.8% from the 135 homes that sold in Roseville in August of 2007.  This August, 41.8% of all homes that sold were non-distressed sales, with 47.3% of sales being bank owned foreclosures and only 11% of sales being short sales.

The average home sold for $341,138 in August, down 20.2% from last August’s average of $422,603.  However, with this year’s average home being slightly larger than last (2081 square feet, on average, versus an average in 2007 of 2004 square feet), sold price per square foot fell a bit more sharply, 22.3%, from August to August.  Thus the average sold price per square foot this August was $163.90, versus $210.86 last August.

Inventory levels in Roseville have reaped the benefits of the increase in demand of the last several months.  Even using the absorption rate of the last twelve months, inventory is a comfortably low 5.3 months overall.  Non-distressed sales are even lower at 4.5 months of inventory.

Fair Oaks homes declined in value over the last year, but not as rapidly as in the rest of Sacramento County.  The average Fair Oaks home sold in July for $174.22, down 21.9% from last year’s average of $222.96.  At the same time, this year’s average home was smaller than last, so the drop in average sale price was greater, 35.4%, with the average home this July selling for $307,838 versus $476,462 last July. 

Demand in Fair Oaks was stronger this year than last, with unit sales increasing 70.4% from 27 units selling in 2007 to 46 units in July of 2008.  Of these 46 units, twenty-two were non-distressed sales (47.8%), 5 (10.9%) were short sales, and 19 (41.3%) were bank foreclosures.  Fair Oaks inventory is slightly higher than the county-wide average, with 5.8 months in inventory at present.

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.

Prices fell in Roseville from July to July, and buyers took responded to the falling prices by buying more homes than in 2007.  Including condos and single family homes, the average home sold in Roseville in July for $340,858, down 21.4% from last year’s average of $433,858.  Sold price per square foot was down 21.9% during this time, from $211.22 in July of 2007 to $164.86 in July of 2008.

With prices falling and interest remaining relatively low, demand picked up in Roseville as it has wherever the price reductions have been deep enough.  Unit volume was up in 42.9% over last year, with 180 units selling this July versus 126 last July.  Because volume has been up for several months in a row, inventory is low — indeed, it’s down to 5.6 months if you base your inventory number on the last year of sales volume, or down to 4.6 months if you go by the last six months.

It remains to be seen whether inventory will stay low into the fall and winter this year, when sales traditionally slow down somewhat, but so far the inventory numbers and the unit sales are both good news for Roseville.

Here are some of the raw numbers for Roseville for July:

Unit Volume Data

Price Data

Inventory (Based on 12 months of prior sales)

Inventory (Based on 6 months of prior sales)

Let’s hope this works so I can go home.

Roseville’s market continued to show good demand for homes in June, but like everywhere else, the upsurge in demand has not yet caused prices to rise.  178 homes sold in Roseville in June, up 29.9% from last June’s 137 homes.  With an average absorption rate of 136 homes per month over the last six months, Roseville’s inventory is down to some 5.3 months, so the strong recent sales are all to the good.

In terms of prices, the average home sold for $333,925 in June, down 22.3% from last year’s average of $429,647.  Unit volume is down about the same amount, 22.2%, from $213.08 per square foot in June of 2007 to $165.81 per square foot in June of 2008.

44.9% of the homes that sold in Roseville in June were bank owned, and 11.2% were short sales.  At 56.1% total, distressed sales are slightly more common in Roseville than in Placer County as a whole.

The tables below give more detailed information about the market in Roseville in June.

Unit Volume Data

Price Data

Inventory (Based on 12 months of prior sales)

Inventory (Based on 6 months of prior sales)

Everybody wants to save money and get the best bargain they can on a home.  At the same time, everybody with a newspaper or a broadband connection knows that we’re in something called a buyer’s market. 

Many buyers feel on some level that they’re not going to get a good buy unless they actively create one by serious, hard-fought negotiations.  Unlike Realtors®, who have the luxury (or the curse) of looking at MLS data day in and day out, buyers don’t always understand that at any given time, the homes offered for sale in the MLS for any given set of criteria the buyer may have will cover a whole range of prices. 

Find an Inexpensive Home and Buy It

The easiest and most sure fire method we’ve found for getting a good deal on a home is to simply find a good deal and buy it. 

This sounds obvious, but in fact, most of the buyers we work with have an idea that they need to negotiate or they’re not going to get a good deal. 

Sometimes, though, depending on the market, the opposite may be true!

Let’s take three categories of homes. In all the numbers that follow, we’ll use homes that sold in Placer County in June, 2008:

• Category 1:  Buyers negotiated an average of 4.3% off of the list price.
• Category 2:  Buyers negotiated an average of 3.6% off of the list price.
• Category 3:  Buyers negotiated an average of only 0.5% off of list price (1/2 of one percent).

OK, so who got the best deal?  Did you say the buyer who negotiated 4.3% off of list?

Let’s look at these same categories again, now with some different information:

• Category 1:  Buyers paid (selling price) an average of $178.20 per square foot for their home.
• Category 2:  Buyers paid (selling price) an average of $197.91 per square foot for their home.
• Category 3:  Buyers paid (selling price) an average of $150.78 per square foot for their home.

That’s a different story, isn’t it?

Why is it that the people who got the best selling price were the ones who "negotiated" the least?  It’s simple:  because the discount was already built in to the listing price.  The buyer needed to step up and offer something close to (or often, over) full price to get the home, because it was priced well enough that other people were competing on it.

Category 3 properties are bank owned foreclosures.  Category 2 properties are non-distressed sales.  Category 1 properties are short sales.

What Matters?

What’s the definition of a real estate bargain?  To me, a bargain is a home that has all the features you want, and the best price compared to other homes that sold at around the same time.  Indeed using "homes that sold at around the same time" is exactly the comparative market method that appraisers use to determine value as well.

One thing appraisers don’t look at is the listing price of your home, or anyone else’s for that matter.  List price is doesn’t matter.  How much or whether you negotiated doesn’t matter.  What matters is the sale price compared to the sale price of other, similar homes.

Which Of The Following Is the Best Bargain?

The following homes are in the same neighborhood, sold around the same time, and have similar features.  Which one is the bargain?

A) Home listed for $400,000.  Buyer wrote lowball offer for $325,000.  Seller came down to $350,000.  Sold for $360,000.

B) Home listed for $350,000.  Buyer offered $340,000.  Sold for $340,000.

C) Home listed for $280,000.  With fierce competition, winning buyer offered $320,000.  Sold for $320,000.

"I’m Not Going To Get In a Bidding War, and I’m Not Going To Pay Full Price"

Buyers tell me all the time that they don’t want to get in bidding wars, and they’re not going to pay full price.  I understand the psychology of both these claims.  But to my way of thinking, bidding wars don’t matter.  Full price doesn’t matter.  What matters is the sale price compared to the sale price of other, similar homes.

Let’s review.  Buyer A is a shrewd negotiator.  Price Line’s William Shatner would be proud.   He paid too much.  Buyer B is a fair negotiator, who knocked ten thousand off the price.  He paid the market price.  Buyer C found a bargain, recognized it as such, and bought it.  He got the best bargain, and he was the "worst" negotiator.

Do you have comps in the neighborhood you’re shopping in?  You should.  Your Realtor® should get them for you.  Are you looking at enough homes to recognize a bargain when you see one?  You should.  Your Realtor® should be showing them to you.

In June of 2008, the combined total sales for short sales and bank owned foreclosures (REOs) in Placer County accounted for 51% of the sold homes, while non-distressed sales made up 49% of sales.  Thus, Placer County fared better than Sacramento County, where distressed sales made up 75% of all sales in June, but not as good as El Dorado County, where distressed sales accounted for 43% of all sales.

This June the average home sold in Placer County for $178.44 per square foot, down 22.9% from last June’s average of $231.37.  The average selling price for Placer County residential real estate was $385,850, down 21.9% from last June’s average selling price of $493,937.

There are currently 8.1 months of inventory in Placer County, which is slightly higher than Sacramento County’s numbers but still much better than the 12.7 months of inventory in El Dorado County.

Overall, the average home that sold in Placer County sold for 97.25% of the list price.  Bank owned properties sold closest to their asking price, with the average bank owned property selling for $310,571 in June, which is 99.49% of the average list price of $312,161.