84 U.S. Markets Improved In July, and the Wall Street Journal proudly called an end to the housing crisis, a declaration made without hedge, stating, “the housing bust is over.”
NOTE – none of those U.S. Markets are located in California. Remember the three things that matter in property, “Location, location, location.” This is why I get my news from local people I trust and value. The graph attached of the Sacramento market is from one of my favorite agents, Elizabeth Weintraub. Take a close look at the graph and you will see just how far inventory has fallen.
This news becomes national news and where economic growth goes, housing growth often follows. While this is good news for the economy at large, I don’t want folks in California to think the housing market in our backyard is all roses and unicorns. It’s not.
The economy in Sacramento is lagging and fighting for a foot hold. As Weintraub mentions in her blog, “Jobs are still in the toilet” and according to the Sacramento Business Journal, the state is 891,200 jobs below its pre-recession total, the nations worst shortfall in raw numbers.
As many of my clients can attest to, the Sacramento housing market is brutal. Not much inventory to support the demand these historically low rates and dropping home values have created. Both real estate agents and home buyers — from Sacramento to San Francisco — are telling stories of “multiple-offer situations” and fierce competition among home buyers.
The media as a whole, like to generalize and definitely sensationalize any bit of news related to the real estate market, and it’s my job to temper the hype with some good old-fashioned numbers.
The July IMI (Improving Market Index) showed 84 improving markets nationwide, a 4-city increase over June 2012. 11 new cities were added to the index including Jackson, Michigan; Springfield, Massachusetts; and, Houston, Texas. Seven cities fell off the list. 32 states are represented in this month’s IMI, and the District of Columbia, too.
For California home buyers, there isn’t much actionable information in the Improving Market Index. But what the IMI can provide is a broad look at whether a local economy has found its footing. When economies are strong, it can create competition for homes which can drive up home sales prices.
I agree with Weintraub that the market in California, and most importantly Sacramento, should stay flat for a while. But, in the meantime, if the right home presents itself and the timing is right to capture a great interest rate – why wait?
Most importantly, for a better feel of what’s happening in Sacramento on a local level, put down the Wall Street journal, and please talk to a local Real Estate Agent. I beg you.