Sacramento Metro Real Estate Market
Composite Averages
Intro
Using raw and monthly MLS data from 52 zip codes, an Average is derived for New, Active, Pended, and Sold listings, the average Cumulative Days on Market, and the average Median Price. The data for the 3 Counties is not part of these Averages.
From this “raw data”, my calculations result in the momentum of each Median Price, the ’10 Yr Mmm Average’ for each data item, ‘Supply’ (New+Active), ‘Demand’ (Pend+Sold), ‘Lean Score’ (long and short-term averages indexed for each data item), ‘Consumption’ (Demand/Supply), ‘Appetite’ (Pend/New), and ‘Turnover’ (Sold/Active).
Summary
This table summarizes the elements of Supply and Demand averages and the derivatives to show shifts in market behavior and “force”.
History of This Month
Lean Score©
The proprietary “Lean Score©” is composed of each tracked zip code (52), attempts to portray the market health, is not tracked to show trends, and uses Short Term and Long Term averages for each data element. Like a balance sheet, it shows a point in time.
Charted are 11 data elements: New listings, Active listings, Pended listings, Sold listings, Canceled listings, Months of Inventory (MoI), Cumulative Days on Market (CDOM), Median price, Median price momentum (Þ), Appetite (PEND/NEW) and Turnover (SOLD/ACTIVE).
The ‘short term’ average (10 year) and the ‘long term’ average (~25 year) are tracked for each data element.
The variance between the current value of each data element and its ‘short’ and ‘long’ averages are calculated.
A positive “Lean” value (leans toward Seller) and negative value (leans toward Buyer) for a data item will be interpreted in different ways for each data element.
Inventory of houses most certainly grows and does not recede over time. I’ve known a house to decay and become uninhabitable but never dead.
Details
When the Lean score for
- New listings leans toward
- Sellers (positive), it means the number of current New listings is low and not adding competition to a Seller’s population of buyers thereby giving Sellers more leverage.
- Buyers (negative), it means the number of current New listings is high and growing the selection and competition in the market for homes, giving buyers more leverage.
- Active listings leans toward
- Sellers (positive), it means the number of Active listings is low and not providing competition to a Seller’s population of buyers.
- Buyers (negative), it means the number of Active listings is high and provides the selection and competitive market that gives buyers leverage.
- Pended listings leans toward
- Sellers (positive), it means the number of Pended listings is high and removing competition from a Seller’s population of buyers giving sellers more leverage.
- Buyers (negative), it means the number of Pended listings is low and giving sellers possible motivation to reduce prices, thereby giving buyers more leverage.
- Sold listings leans toward
- Sellers (positive), it means the number of Sold listings is high, reducing competition and making it much more probable that Sellers product will soon sell, giving Seller more leverage.
- Buyers (negative), it means the number of Sold listings is low, maintaining pressure on sellers to reduce prices.
- Canceled listings leans toward
- Sellers (positive), it means the number of canceled listings is low and chance of a sale is high, giving more hope to sellers.
- Buyers (negative), it means canceled listings are high making seller psychology suffer from more anxiety.
- Months of Inventory (MoI) leans toward
- Sellers (positive), it means low, good for Sellers
- Buyers (negative), it means high, good for Buyers
- Cumulative Days on Market (CDOM) leans toward
- Sellers (positive), it means low, good for Sellers
- Buyers (negative), it means high, good for Buyers
- Median price leans toward
- Sellers (positive), it means high, good for Sellers
- Buyers (negative), it means low, good for Buyers
- Median price momentum (Þ) leans toward
- Sellers (positive), it means high, good for Sellers
- Buyers (negative), it means low, good for Buyers
- Appetite leans toward
- Sellers (positive), it means high appetite for New listings, favoring sellers
- Buyers (negative), it means low appetite, favoring buyers
- Turnover leans toward
- Sellers (positive), it means high turnover, favoring sellers
- Buyers (negative), it means turnover is low, favoring buyers
Inventory
The real estate market was created to exchange “products”: money and houses. When a house is made available to prospective buyers, there is a response to that “Product”. That response can be shown by the current and historic data and the trends and shapes of those lines. An ACTIVE listing is briefly also NEW. When a seller and buyer enter escrow, the “Product” becomes PENDING. If that buyer and seller execute the contract, the “Product” becomes SOLD. The life of all “Products” (MLS only) can be seen in these charts and blurbs.
The data for New and Pending listings render this calculation called “appetite” for new residential listings for the month.
The data for Active and Sold listings render this calculation called “turnover” of residential listings for the month.
Consumption is a simple calculation of demand and supply. Listings go from Active (New), to Pending, to Sold. From Pending back to Active means escrow failure. Supply is Active listings which grows by New listings and Demand is the depletion of supply by Pending and Sold listings.
Median Price
12MMA
Momentum
Momentum
Momentum Gain
CDOM
Cumulative Days on Market (CDOM) represents the number of days a listing spends ACTIVE until SOLD. The number of days PENDING are excluded from the CDOM number.