Real Estate Market Overview

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Introduction

Our market for resale, residential real estate is explained in the pages represented in the Market Menu (above). This analysis incorporates most market data to help understand and explain the Sacramento metropolitan market trends. Data is from Sacramento, El Dorado, and Placer Counties. Within this area are many sub-markets which are affected by market forces in similar ways but result in different prices, supply levels, and housing demand. The Zip Menu (above) dives deeper into selected zip codes.

Where most forces are predecessors TO market behavior (notwithstanding recursive effects), the trends are based on results FROM that behavior. The analysis is documented so client decisions are supported.

My “Wise Market Intelligence System™” gathers, measures and publishes data, trends, observations and opinions (mine) of  results in 52 zip codes and 3 counties in the Sacramento Metropolitan region (Sacramento, El Dorado, and Placer Counties).

Collection, analysis and reporting on the market data is an attempt to understand where we are going, where we were and what is happening. Markets get disrupted mostly by events, seasons, psychology, and chance. The data I collect is for 3 Counties and 52 Zip Codes in those Counties (and Yolo).

Wise MIS™

Market Forces

There are many elements (“forces“) that drive the supply (attempt to sell) and the demand (attempt to buy) homes. When a home is newly constructed, there are additional forces. Common to either type of single-family residence (SFR), mortgage rates, buyer and seller confidence, new home permits, and employment exert extreme forces on the supply and demand for homes. The forces affecting supply and demand are rarely tangible. Loan rates and supply are tangible. Psychology and the consequences of bad policy are not.

The Most Important 3 Words in Real Estate

1. Timing

Is the timing right for the buyer to buy and the seller to sell?  Without this being true, we have no market.

2. Psychology

The human element is hard to forecast. ‘Meeting of the minds’ is critical to executing a contract. Fear and greed occur here.

3. Location

A property’s proximity to water, food, and amenities will always be important.

Market Summaries

Monthly Summary - Counties
Monthly Summary - Zip Codes

Market Geography

Under all is the dirt. The Sacramento Metropolitan real estate market covers a lot of dirt. The Metrolist (MLS) system I use to expose and search includes many different parts of California.

Population Stats
Occupied Units

These are the Counties and zip codes tracked: El Dorado County, Placerville 95667, Cameron Pk 95682, Pollock Pines 95726, El Dorado Hills 95762, Placer County, Auburn 95603, Lincoln 95648, Loomis 95650, Composite Averages, Roseville 95661, 95678, 95747, Rocklin 95677, 95765, Granite Bay 95746, Sacramento County, Carmichael 95608, Citrus Heights 95610, 95621, Elk Grove 95624, 95757, 95758, Fair Oaks 95628, Folsom 95630, North Highlnds 95660, Orangevale 95662, Rancho Cordova 95670, 95742, Rio Linda 95673, Arden 95815, 95821, 95825, 95864, Downtown 95816, Oak Park 95817, Land Park 95818, East Sacramento 95819, Elder Creek 95820, Greenhaven 95822, Franklin 95823, Fruitridge 95824, College Greens 95826, Rosemont 95827, Florin 95828, Vineyard 95829, Pocket 95831, Natomas 95833, 95834, 95835, Del Paso Heights 95838, North Sacramento 95841, Foothill Farms 95842, Antelope 95843, West Sac 95605, 95691

Key Metrics

These are the key metrics used throughout the Wise Market Information System™.

Market Sweat Index™ –

[SWEAT] measures net market tension (demand growth minus supply growth) plus pricing tension. When Positive, it indicates seller-favor (buyers competing, prices holding). When Negative, it indicates buyer-favor (inventory building, prices softening). The arbitrary ‘Rest Area’ between +30 and -30 indicates relative balance.

Housing Appetite™ –

[APPETITE] shows the balance between demand (PENDED) and fresh supply (NEW).  A high number means a strong APPETITE for new listings, favoring sellers. A low number means there is a low APPETITE, favoring buyers. Appetite provides only an aggregate directional signal, not a precise one-to-one matching.

Market Activity Index™ –

[MAI] weighs sales and offers most heavily, subtracts cancellations, and normalizes the result on a 0–100 scale against the full historical range (50 = average activity). Scores above 50 indicate stronger market heat and seller advantage; scores below 50 show weaker activity and more buyer-friendly conditions. It is objective and based entirely on what actually happened in the market. Shows raw activity level.

Median Price Momentum (Þ) –

Momentum depicts the rate of change in the MEDIAN prices over the last 12 months. This is most sensitive to changes in MEDIAN prices. Each month, with or without a change in the [MEDIAN], its momentum can go Up, Down, or Not Change. Derivative charting depicts market movement, the force and direction of price changes, and potential future triggers. Momentum can be understood as the persistency or trend in the direction of price changes. Commodity traders put a heavy reliance on momentum to predict the underlying price change. When momentum talks, traders listen. Positive momentum (“# Þ > 0”) triggers Buy; Negative triggers Sell.

Momentum Swing Indicator™ –

[SWING] is derived by tallying monthly changes in the momenta for each zip code. (Up, Down, NC; Sum 52). Like an EKG, this depicts the “swings” in market momentum.

Market Lean Score™ –

calculates deviations from short and long-term averages for New houses for sale, Houses that people want to buy (Pended), Houses that actually got sold, Houses that people changed their mind about (Cancelled or Expired), How many houses are still for sale (Active), and How many days houses are taking to sell (CDOM). Each “phase” of a Listing represents Supply or Demand (or lack thereof).

Market Action Zone™ –

Market Action zone is a tally of momenta for each zip code and whether they are positive, zero, or negative. A positive momentum implies “buy”. A negative momentum implies “sell”. When momentum talks, traders listen. 

Housing Absorption –

measures how quickly the market is clearing inventory, consistent heuristic for tracking how fast homes are selling relative to available supply.

Months of Inventory (MoI)  –

rate at which available inventory is expected to sell given last month’s rate,

Data and Derivatives

Raw Data –

These are the data elements gathered from systems of record:

  • [MEDIAN] Price – half of the Sold prices during the current month are higher, half are lower,
  • [NEW] Listings – seller made property available to the market in the current month,
  • [ACTIVE] Listings – property was available to the market at the end of the current month,
  • [PENDED] Listings – seller accepted a contract during the current month,
  • [SOLD] Listings – property sold to a buyer during the current month,
  • [CANC] Listings – (or expired) seller removed property from the market during the current month (or listing contract expired),
  • [#Offers] – number of offers received during the current month,
  • [CDOM] – cumulative days on market is the total days it took to sell the property,
  • Mortgage Rate – 30 year fixed rate,
  • Consumer Sentiment,
  • Consumer Confidence,
  • Home Permits,
  • Government and Private Employment,
  • Construction Spending,
  • New Home Sales,
  • Non-Farm Payroll,
  • Median Income,
  • Population,
  • Housing Units,
  • Land Area

Derived Metrics –

These are derived from the gathered data:

  • [MEDIAN Þ] – Median price momentum,
  • [MEDIAN 12MMA] – 12-month moving average of Median price,
  • [MEDIAN] variability (σ) – variability of a region’s Median sold prices,
  • [NEW] [ACTIVE] [PENDED] [CANC} [SOLD] Listings % of its [12 yr MMM Avg] – depicts variance from seasonal average,
  • [NEW] [ACTIVE] [PENDED] [CANC} [SOLD] Listings Index – the year-over-year change,
  • [#Offers] % of its [12 yr MMM Avg] – depicts variance from seasonal average,
  • [#Offers] Index – the year-over-year change,
  • Housing Appetite™,
  • Housing Absorption Rate,
  • Dollar Volume – total, sold, and excess dollar amount offered during the current month,
  • Months of Inventory,
  • Housing Affordability Index – level of affordability for houses given income, interest rate and lending rules,
  • Market Activity Index™ – ,
  • Market Sweat Index™,
  • Market Lean Score™
  • Supply Index,
  • Demand Index,
  • Momentum Swing Indicator™,
  • Price Divergence,
  • % off MEDIAN High
Rumble Channel
Rumble Channel
Metrolist Counties (2020 12/07)
Sacramento Metro Counties
Sacramento Metro Counties
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