Wright Report Q1-2, 2015

January - June, 2015
www.WrightRealEstate.us Page 1 (916) 726-8308
Wright Report
Perspective and Overview on the U.S., State of California &
Greater Sacramento’s Residential Real Estate Markets:
Statistics and Trends on the United States, the State of California, and Northern California
Counties: including Sacramento, Placer, Yolo, El Dorado & San Joaquin Counties.
January to June, 2015
TTHHEE WWRRIIGGHHTT RREEPPOORRTT

Wright Report
The Wright Report
Prepared by:
This work is licensed under the Creative Commons Attribution-ShareAlike 3.0 Unported
License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco,
California, 94105, USA.
Prepared By: Joel Wright &
Document Version: Final
Last Updated On: October, 2015

Wright Report
TABLE OF CONTENTS
TABLE OF CONTENTS....................................................................................................................... 3
EXECUTIVE SUMMARY:.................................................................................................................... 4
THE EXPERTS WEIGH IN:.................................................................................................................. 5
Sacramento Appraiser: Ryan Lundquist ...................................................................... 5
REAL ESTATE MARKET UPDATE:...................................................................................................... 8
MACRO ECONOMIC TRENDS:........................................................................................................ 12
LENDING AND INTEREST RATES:.................................................................................................... 14
COUNTY STATISTICS: ..................................................................................................................... 16
Sacramento County.................................................................................................... 17
Placer County.............................................................................................................. 18
El Dorado County........................................................................................................ 19
Yolo County................................................................................................................ 20
San Joaquin County ................................................................................................... 21
RESOURCES:................................................................................................................................... 23

Wright Report
EXECUTIVE SUMMARY:
Growth and optimism are at last reflecting in Residential Real Estate
Markets across the country, and yet, as it occurs they are tempered by
concerns. While the outlook is positive it should be recognized that
the housing recovery so far has been somewhat lopsided and gives an
inaccurate impression of reality. However, due to the economic
recoveries nationally, and locally, we expect stable continued growth
for the near future.
Nationally, annual growth in GDP seems stable, population continues
to grow as does the number of jobs created, and unemployment is in
decline. This economic good news is overflowing into real estate
markets with higher prices and more demand for new and resale
homes.
The median price across the U.S. in June 2015 surpassed the previous
pre-recession high of $230,000 by reaching $236,000. That is a big
step forward and generally gives the impression that we are headed
forward quickly, perhaps even a bit too fast. But it should be
remembered that while prices are higher, payments are lower than at
the previous high due to continuing low interest rates.
In some respects the numbers do not give a clear picture of what is
going on. The primary reason is they are averages; so while some
cities around the country and California are going gangbusters, (areas
with a focus on the stronger economic sectors like Technology and
Energy), there are many other areas that have not fully recovered. An
example is Sacramento County whose median sold price is 25% below
the former high, while the California median sold price is only 18%
below its previous high.
If the national economy holds and no major catastrophes occur in the
near future (International Monetary collapse, stock market fall,
Armageddon), we can likely expect the markets to continue to rise;
though the recovery will continue to affect cities different and will
definitely be affected by rising interest rates.

Wright Report
THE EXPERTS WEIGH IN:
Sacramento Appraiser: Ryan Lundquist
Definitive Seasonal Uptick in the First Half of 2015
The first half of 2015 showed a definitive seasonal uptick, but not an
aggressive one. Overall sales volume was up about 10% in the 4-
county region, and pendings have routinely been 15-20%+ higher
each month this whole year. Sales volume in June was actually higher
than it’s been in about three years. More sales has resulted in a
decline in inventory, though it’s important to note more listings have
definitely been hitting the market (and there have been more price
reductions too). While many properties are generating multiple offers
and selling very quickly, buyers are also finicky about pulling the
trigger on anything that is not well-priced or with an adverse location
or condition. Some sellers are severely overpricing their homes too.
The median price stayed about the same last month compared to the
previous month, which shows a trek toward a more stable trend after
a season of appreciation. One of the biggest factors shaping this
market is the power of FHA buyers who now represent 23% of all sales
in 2015 in the Sacramento region (and 27.5% of all sales last month in
Sacramento County). The byproduct of more FHA buyers is stiff
competition at the lower end and higher offers too (this makes overall
housing stats look more impressive). As housing inventory presumably
begins to increase over the next few months (as it did last year),
watch out for price reductions, unrealistic expectations from sellers,
and buyers gaining more power.

Wright Report

Wright Report
Ryan Lundquist is a Certified Real Estate Appraiser in the Greater Sacramento
Area. He also specializes in reducing property taxes. Check out his great Blog at
www.SacramentoAppraisalBlog.com or contact directly at (916) 595-3735.

Wright Report
REAL ESTATE MARKET UPDATE:
National Real Estate Market
The median price across the United States hit $236,300 in June 2015,
a gain of 13.5% from $208,200 in December 2014, and a 6.5% year
over year gain from June 2014. The National Association of Realtors
(NAR) reported that 93% of the more than 170 areas it tracks showed
increased prices in Q2-15 compared to Q2-14. Of those, 19% saw
more than a 10% price increase.
June 2015 closed the quarter with 4.9 months of inventory, a bit lower
than Q2-15 as a whole which averaged 5.1 months of inventory.
The average sold price for a single family home in the U.S. in June
2015 rose to $280,200, an increase of 10% from December 2014
($254,800).
In June, according to NAR estimates 5.4 million single family
residences (SFR – homes and condos) will be sold in the U.S. in 2015.
That is up from 4.94 million sold in 2014 and 5.07 million sold in 2013.
A total of 2.5 million homes sold in the first half of 2015.
The Q2-15 National Home Ownership Rate contuse to decline, even
with the increased number of sale, to 63.4% from 64.7% in Q2-14.

www.WrightRealEstate.us
Wright Report
http://economistsoutlook.blogs.realtor.org/2015/07/28/rising
debt/
SFR New Home sales in the first half of 2015 reached 274,000 which
looks like 2015 sales will
the total sales in 2014 of 435,000 homes.
Median sold price, however, is down from June 2014 to $27
June 2015. Average sold also declined year to year from
June 2014 to $319,000 in 2015.
The number of sales is up, permits
it still greatly lags historical trends of close to one million units built
and sold annually.
The numbers for new SFR construction is up, but it is not as strong as
the increase in multifamily permits and construction. Strong demand
for Commercial Multifamily units is a continuing trend that will not
decline until more buyers begin to work
ownership.
January
Page 9
http://economistsoutlook.blogs.realtor.org/2015/07/28/rising-home-prices-and-falling
looks like 2015 sales will break a half million sales and easily
the total sales in 2014 of 435,000 homes.
Median sold price, however, is down from June 2014 to $274
2015. Average sold also declined year to year from $338,100 in
00 in 2015.
The number of sales is up, permits are up and construction is up. But
decline until more buyers begin to work towards increased home
(916) 726-8308
falling-mortgage-
easily surpass
4,800 in
$338,100 in
up and construction is up. But
towards increased home

www.WrightRealEstate.us
Wright Report
http://economistsoutlook.blogs.realtor.org/2015/07/24/the
Median price for New Homes sold
declined slightly from the first four months of
near $293,000 and then
http://www.bls.gov/web/empsit/ceshighlights.pdf
January
Page 10
http://economistsoutlook.blogs.realtor.org/2015/07/24/the-latest-on-new-home-sales
Median price for New Homes sold nationally in June ($274,800
from the first four months of 2015 where it remained
then declined in May and June 2015.
http://www.bls.gov/web/empsit/ceshighlights.pdf
(916) 726-8308
sales-2/
$274,800)
2015 where it remained

Wright Report
New Home Builders continue to express concerns about the lack of
skilled labor, which makes sense if one considers that new
construction was almost nonexistent from 2008 to 2012 during which
time many of the skilled workers had to get 2nd
jobs, or completely
change professions to be able to make ends meet.
California Real Estate Market
In California the median sold price hit $489,560 in June, up 7% from
June 2014 ($457,630). That median price is up 99.6% from the 2009
bottom of $245,230. The current median price is also only 17.7%
below the 2006 high of $594,530.
The number of Months of Inventory of homes available for sale is 3.3
months, and the number of sales is up 16.4% year over year. The
number of days a property is marketed for sale – DOM- is 33.3 days.
Affordability, the percent of people in California who can afford to
purchase the median priced home with 20% down payment, is down 4
points so far this year from 34% in Q1-15 to 30% in Q2-15.

Wright Report
The least affordable County is San Francisco with 10% affordability,
followed closely by Marin (17%), Contra Costa and Alameda Counties
at 18%. The most affordable are King County at 62% and San
Bernardino (56%) and Tulare at 54% affordability. The CA average
affordability is 30% for the state in Q2-15, down from 34% in Q1-15.
The ability of buyers to be able to pay for their mortgage is a major
indicator as to the health of the market and the transition through
market cycles.
MACRO ECONOMIC TRENDS:
GDP growth in Q1-15 was low, dropping .2%, but recovering in Q2-15
with a gain of 2.4%. Job growth has also been strong through the first
half of 2015 with 586,000 jobs gained in Q1 and 692,000 in Q2.
The US unemployment rate declined to 5.3% in June, a decrease from
6.1% in June 2014. In California the unemployment rate declined to

Wright Report
6.3% in June, from 7.5% a year earlier. Sacramento’s unemployment
reached 5.6% in June; down from 7.2 in June 2014.
Even though unemployment continues to decline, the labor force
participation rate (the % of the population actually working) has also
dropped slightly year over year. In June 2015 it was 62.6%, down
slightly from 62.8% in June 2014. In June 2006 it was 66.2%.
Labor Force Participation Rate
Bureau of Labor Statistics: http://data.bls.gov/timeseries/LNS11300000
Other Contributing Factors
Millennial buyers (between the ages of 18 – 34) when polled have a
strong desire to enter the home purchase market, but due to economic
considerations, a lagging job market, and trouble acquiring long term
employment. Their ability and willingness to start a family, move out
on their own and buy property has been affected.
On the other side, the Baby Boomer generation is reaching retirement,
and while they have more capital than any other group many have

Wright Report
retirement considerations that were not present before the Great
Recession. They are tending to stay in their current home, rather than
downsizing.
Recent historic low interest rates could also be a factor because as
home owners have loans financed at historic lows, near 3%, they are
less willing to pay a higher rate (4%) to purchase, even though it is
still less than half the historical average of 8.4% since 1972.
Wage growth through the U.S. also continues to stagnate. It
increased only slightly - .7% in Q1-15 and .2% in Q2-15. So while
inflation, historically between 2-3% annually, has not been a major
issue as of yet, however, it could be a major concern when it returns,
if wages continue to remain stagnant.
Short sales and REO Properties (Foreclosures) continue to be part of
the real estate scenery, but have been relegated to a minor role. Only
7.7% of CA homeowners currently owe more than their home is worth
so short sales are expected to continue but at a slower rate than we
have seen over the last ½ decade. (propertyradar.com)
The Stock Market is also at an all time high, and could affect real
estate in several ways whether it continues to rise or fall. Strong
shifts will also create changes that ripple through the residential
markets. It will affect job losses, provide individual motivation or
hesitation to potential home owners, and influence investor demand of
real estate as a way to diversify their portfolio.
LENDING AND INTEREST RATES:
Interest rates are one of the primary contributors to the stronger real
estate market we are seeing nationally and locally. If current rates
reflected the historical average since 1972 they would be at 8.4%.
Such a rate would make the prices in many markets instantly

Wright Report
unaffordable to the average consumer. It is likely for this and similar
reasons that the Fed will continue to act cautiously when raising rates.
Still, the increase of interest rates on home loans is inevitable, and it is
as yet uncertain when it will occur, or how fast it will rise.
Interest rates rose to 3.98% in June 2015 from the January 2015’s low
of 3.71%. Compared to one year earlier they came down from 4.16%.
While higher than the all time low in 2012 the rate is still well below
the historical average.

Wright Report
COUNTY STATISTICS:
The Greater Sacramento Area includes parts of four counties:
Sacramento, Placer, El Dorado and the city of West Sacramento in Yolo
County.
The 3 surrounding counties to Sacramento (Placer, El Dorado & Yolo)
consistently maintain average property sales prices over $400,000;
while Sacramento and San Joaquin County, just to the South, are
priced in the low $300,000s.
All of the counties rose in average price from June 2014 to June 2015
with increases ranging from 4% in El Dorado to 10.1% in San Joaquin
County. Also, more homes sold in June 2015 than the previous year in
all Counties and the number of Distressed Sales (Short Sales or REOs -
bank owned property) also declined with the only exception being the
number of short sales sold in Placer County which increased.

Wright Report
Affordability, the percent of borrowers that can purchase the median
priced home with the median family income in the area and 20% down
at current interest rates, ranges from 10% in San Francisco to 62% in
King County, but the average is 30% for the state in Q2-15.
Months of Inventory, the number of months it takes to sell the amount
of homes currently for sale if no new homes came up for sale, ranged
from 1.4 months to 1.7 months with the outlier being El Dorado
County at 3.2 months.
The average Days on Market (DOM, or the number of days the average
home will be marketed for sale before an offer is accepted) was just
over 1 month, with Sacramento being the lowest at 26 days, and El
Dorado the highest at 43 days.
The median number of DOM was much lower in all 5 Counties with the
lowest in Sacramento at 12 days and El Dorado the highest at 22 days.
Sacramento County
Sacramento County saw the average sold price rise 9.9% between
December to June with $323,179. From June 2014 it rose 10%.
The median sale price in June 2015 was $295,310 which is 8.7%
higher than the previous year. Since its lowest point in January 2012
with a median sold price of $160,000 Sacramento County’s median
sold price has risen 83.3%.
AVERAGE SOLD
PRICE by SELLER
TYPE
# Sold
June
2015
# Sold
June
2014
Yr/Yr %
Change
Average
Sold Price
June 2015
Average
Sold Price
June 2014
Yr/Yr %
Change
Total Sold 1779 1456 22.2% $323,179 $293,884 10.0%
REO 85 86 -1.2% $211,001 $199,893 5.6%
Conventional 1593 1266 25.8% $333,079 $305,080 9.2%
Short Sale 101 104 -2.9% $261,434 $235,323 11.1%

Wright Report
The number of Distressed Sales in June 2015 was 10.5% of total sales,
down from 13% in June 2014. Short sales made up 5.7% of sold
properties in June, and REOs (foreclosures) made up 4.8% of sales.
In Sacramento County the Inventory of homes available for sale
decrease from June 2014 with 2,752 SFR units available for sale to
2,512 units on the market in June 2015; a decrease of 8.7%. The
Months of Inventory in June 2015 was 1.4 months.
Sacramento Counties affordability is 47% in Q2-15: 1 point lower than
in Q2-14 and 2 points lower than Q1-15. The average Days on Market
(DOM) dropped 4 days from June 2014 to 26 days in June 2015. The
median number of DOM was just 12 days in June.
Placer County
Placer County the average sold price rose 4.7% between December
and June to $449,142; up 6.7% from June 2014.
The median sale price in June 2015 was $402,870, 5.2% higher than
the previous year. Since its lowest point in February 2012 with a
median sold price of $251,450 Placer County’s median sold price has
risen 60.2%.
down from 7.2% in June 2014. Short sales made up 3.9% of sold
AVERAGE SOLD
PRICE by SELLER
TYPE
# Sold
June
2015
# Sold
June
2014
Yr/Yr %
Change
Average
Sold Price
June 2015
Average
Sold Price
June 2014
Yr/Yr %
Change
Total Sold 672 501 34.1% $449,142 $420,892 6.7%
REO 12 18 -33.3% $380,428 $309,889 22.8%
Conventional 634 465 36.3% $453,102 $427,868 5.9%
Short Sale 26 18 44.4% $384,270 $351,694 9.3%

Wright Report
In Placer County the inventory of homes available for sale decreased
from 1,284 SFR units in June 2014 to 1,164 units on the market in
June 2015; an decrease of 9.4%.
In June the number of months of inventory was 1.7 months.
Affordability was 44% in Q2-15: 2 points lower than in Q1-15. The
average DOM rose 1 day from June 2014 to 32 days in June 2015.
The median number of DOM in June 2015 was just 16 days.
El Dorado County
El Dorado County the average sold price rose 5.2% between December
and June to $437,057; up 4% from June 2014.
the previous year. Since its lowest point in September 2011 with a

Wright Report
median sold price of $238,750, El Dorado County’s median sold price
has risen 71.8%.
AVERAGE SOLD
PRICE by SELLER
TYPE
# Sold
June
2015
# Sold
June
2014
Yr/Yr %
Change
Average
Sold Price
June 2015
Average
Sold Price
June 2014
Yr/Yr %
Change
Total Sold 239 245 -2.4% $437,057 $420,176 4.0%
REO 13 18 -27.8% $322,606 $230,184 40.2%
Conventional 220 216 1.9% $446,071 $435,720 2.4%
Short Sale 6 11 -45.5% $354,513 $425,864 -16.8%
In El Dorado County the inventory of homes available for sale decrease
from June 2014 with 791 SFR units available for sale, to 761 units in
June 2015; an decrease of 3.8%.
In June the number of months of inventory was 3.2 months. The
average DOM dropped 1 day from June 2014 to 43 days in June 2015.
The median number of DOM in June 2015 was just 22 days.
Yolo County
Yolo County the average sold price rose 25.5% between December
and June to $453,836; up 6% from June 2014.
the previous year. Since its lowest point in January 2012 with a
median sold price of $195,550, Yolo County’s median sold price has
risen 101.3%.

Wright Report
AVERAGE SOLD
PRICE by SELLER
TYPE
# Sold
June
2015
# Sold
June
2014
Yr/Yr %
Change
Average
Sold Price
June 2015
Average
Sold Price
June 2014
Yr/Yr %
Change
Total Sold 152 144 5.6% $453,836 $427,921 6.1%
REO 2 10 -80.0% $274,750 $193,490 42.0%
Conventional 145 127 14.2% $463,321 $450,968 2.7%
Short Sale 5 7 -28.6% $250,400 $344,675 -27.4%
In Yolo County the inventory of homes available for sale decrease from
256 SFR units in June 2014 to 244 units in June 2015; an decrease of
4.7%.
In June the number of months of inventory was 1.6 months. The
average DOM rose 5 days from June 2014 to 31 days in June 2015.
The median number of DOM in June 2015 was 17 days.
San Joaquin County
San Joaquin County the average sold price rose 10.6% between
December and June to $315,464; up 10.1% from June 2014.
the previous year. Since its lowest point in April 2009 with a median
sold price of $147,053, San Joaquin County’s median sold price has
risen 101.3%.
AVERAGE SOLD
PRICE by SELLER
TYPE
# Sold
June
2015
# Sold
June
2014
Yr/Yr %
Change
Average
Sold Price
June 2015
Average
Sold Price
June 2014
Yr/Yr %
Change
Total Sold 716 617 16.0% $315,464 $286,447 10.1%
REO 41 44 -6.8% $194,858 $212,846 -8.5%
Conventional 641 535 19.8% $327,380 $294,916 11.0%
Short Sale 34 38 -10.5% $236,250 $252,425 -6.4%

Wright Report
In San Joaquin County the inventory of homes available for sale
increase from June 2014 with 1,108 SFR units available for sale, to
June 2015 with 1,171 units on the market; an increase of 5.7%.
In June the number of months of inventory was 1.6 months.
Affordability was 37% in Q2-15: 2 points lower than in Q1-15 and
down 3 points from Q2-14. The average DOM rose 3 days from June
2014 to 38 days in June 2015. The median number of DOM in June
2015 was 17 days.

Wright Report
RESOURCES:
ABREVIATIONS
CAR = California Association of Realtors
HAFA = Home Affordable Foreclosure Alternative
HAMP = Home Affordable Mortgage Program
MLS = Multiple Listing Service
NAR = National Association of Realtors
NOD = Notice of Default
NOT = Notice of Trustee Sale
REO = Real Estate Owned by a bank, or foreclosure
SAR = Sacramento Association of Realtors
WRE = Wright Real Estate
ADDITIONAL RESOURCES
MetrolistMLS.com- to search for properties. www.metrolistmls.com
NorthState Building Industry Association (BIA) www.northstatebia.org
Rental Housing Association (RHA) www.rha.org
Sacramento Association of Realtors (SAR) www.sacrealtor.org

Wright Report
Serving Sacramento since 2000.
Check out our BLOG and additional STATISTICS on the web at:
www.WrightRealEstate.US
For FREE Information and Consulting Services contact us:
Office: 916.726.8308 Joel@WrightRealEstate.US

Wright Report Q1-2, 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (19)

Similar to Wright Report Q1-2, 2015

Similar to Wright Report Q1-2, 2015 (20)

Recently uploaded

Recently uploaded (20)

Wright Report Q1-2, 2015