November marked the sixth straight month of year-over-year price gains for resale homes in Sacramento County and the first time prices have risen in November since the peak of the housing bubble in 2005, DataQuick reported Thursday.
The latest figures from the San Diego-based information service lend support to the idea that the real estate market, long in the doldrums, has turned the corner and is on a steady upward trajectory, said DataQuick analyst Andrew LePage.
The traditional wisdom among real estate professionals, he said, is that "if you get six months or more (of increases) in a row it's an indication of the way prices are going."
The median price of detached resale homes in Sacramento County rose more than 17 percent in November from the same month a year ago, DataQuick reported this morning. The county's median resale home price of $185,000 last month was up from $158,000 the prior November. It was also up over October's median of $180,000, DataQuick said.
Last month's year-to-year gain was the largest in November since prices were surging upward in 2004, figures show.
However, the number of all homes sold in November in Sacramento County, including new homes and condominiums, fell by about 13.5 percent from the previous month. There were 2,239 homes that closed escrow in October but only 1,937 that closed in November.
LePage attributed it to typical market fluctuations. "A drop seasonally is normal," he said. "The average decline in volume from October to November is about 8 percent."
Strong investor activity coupled with a lack of homes for sale has boosted home prices in the past six months. Among the largest buyers have been investors such as the Blackstone Group, a New York-based firm that has bought up hundreds of homes in the region.
Shortages remain. The Sacramento Association of Realtors reported Thursday that there continues to be less than a month of inventory on the market, meaning all the homes listed could be sold in under 30 days. A six-month supply is deemed optimal for a balanced market. Less than three months' worth is considered a seller's market.
At the same time, competition for homes is increasing. In the past few months, more move-up buyers have been entering the market seeking to take advantage of prices that are as little as half of what they were during the boom.
Interest rates continue to hover near historic lows. On Thursday, the rate was about 3.5 percent for a 30-year-fixed mortgage and well under 3 percent for a 15-year loan.
The combination of factors has led to a fast-changing market.
Recently the market has switched from one in which most homes listed were foreclosures or short sales to one in which most homes are conventional sales, with the sellers retaining equity in their houses.
If prices continue upward, LePage said, a supply response, with more area homeowners listing their properties for sale, would invariably follow continuing a trend toward normalcy.