Home prices were way up, but sales volumes were way down, in the Sacramento area in January compared with the same month last year, DataQuick reported Thursday.
Sacramento County, where 1,321 home sales closed in January, hit a six-year low for the month. Sales volume was down more than 19 percent from January 2012. The last time fewer houses sold in the month of January was in 2008, during the depths of the recession and housing crash, the San Diego-based real estate information service said.
The Bay Area and Southern California markets also experienced strikingly low sales volumes in January, the firm said.
January is typically a month when closings fall, but this year’s sharp drop was exacerbated by a lack of homes for sale coupled with higher prices and higher interest rates than a year ago, said DataQuick analyst Andrew LePage.
“Sales have been falling (compared with the same months last year) for four consecutive months,” LePage said. “We’re still looking at inventory constraints. Inventory is up, but not up enough to make a difference.”
The Sacramento Association of Realtors reported Thursday that there were 1,940 homes for sale in January in Sacramento County and the city of West Sacramento. That represents about two months of inventory, meaning it would take about that long to sell all the houses, the group said. In December, when many of the January closings reported by DataQuick received offers, there were just 1.4 months worth of active listings, according to the Realtors’ association.
Anything less than three months of inventory is generally considered a sellers’ market.
With few homes for sale, the median price of all homes sold in Sacramento County rose more than 25 percent in January compared with the same month last year, going from about $187,000 to $235,000, DataQuick reported.
There was a similar trend of higher prices and lower sales volumes in El Dorado, Placer and Yolo counties, the firm said.
The higher prices were coupled with mortgage rates that are still historically low but about 1 percent higher than they were in January of last year, Le Page said. It was another factor that contributed to the slowdown in sales, he said.
“First-time buyers and even move-up buyers are running into affordability constraints,” LePage said.
The good news for traditional buyers is that many investors, who boosted sales last January in the lower price ranges, left the market as prices rose and potential returns diminished.
That’s one reason why sales of homes priced under $300,000 fell by about 32 percent in January in Sacramento County, LePage said. Homes priced above $300,000, generally purchased by move-up buyers, rose in the same month by nearly 44 percent, he said.
Real estate professionals are keeping a close eye on the number of people who choose to list their homes this spring. The so-called “supply response” will help determine the trajectory of prices and the health of the market.
“Inventory always swells in the spring,” LePage said. “It’s just a question of magnitude. More people have equity and others are content with what their home will fetch. To me, that’s the big question. How many months of inventory will we have come April?”
Call The Bee’s Hudson Sangree, (916) 321-1191.