OK... the numbers for May just came in. Here's how things are shaking out...
The number of homes that sold last month compared to May of 2006 dropped pretty much across the board in Sacramento, El Dorado & Placer counties - this was to be expected. Median prices, the price at which half the homes sold higher and half sold lower, also dropped... again, this was expected.
In Sacramento County, in Carmichael, for example, the median price single family homes was down about 3% to $390,000, and the number of homes sold was just 47, down 39.4%. Elk Grove's number of homes sold dropped 42% - only 134 homes changed hands in May. Fair Oaks, however, showed no change in number of homes sold last month compared to May of last year, and the median price actually rose by 6.9% to $420,000. And Folsom showed a 9.2% increase in the number of homes sold, while the median price dropped 6.7% to $485,000.
In most zip codes in Sacramento, median prices dropped, compared to last May, by as much as 20%, but actually rose in others by as much as 12-18%. Most areas in Sacramento did drop in median price as well as the number of homes sold compared to May of '06.
In El Dorado County, El Dorado Hills saw only 54 homes change hands, down 22.8% compared to last May. And the median price dropped 4.6% to $596,500.
In Placer County, Roseville, zip code 95661 saw a median price drop of 16.5% to $459,500, while 95678 saw a 6% median price drop to $371,500, and 95747's median price was $402,000 in May, a 8.1% drop compared to last May.
Many feel, including the media, that the sky is falling. Not true. This is just a continued "adjustment" that we are experiencing following the many years of record appreciation we saw earlier this decade. Many think this is a "bad" market. Many of us in industry disagree. No market is necessarily good or bad, it's just who (buyers or sellers) it's better for. If the market is better for sellers than it is for buyers, it's a "seller's" market; if it's better for buyers than it is for sellers, it's a "buyer's" market. And, a buyer's market is what we're currently in. Ask any buyer if it's a good or bad market and he or she will tell you it's great. Now, sellers don't necessarily agree because of the loss of equity they've seen over the past couple years. And I can certainly appreciate their frustration.
The bottom line: buyers are still buying (they are able to afford more home than just a couple years ago) and sellers are still selling (they just need to focus on being realistic when pricing in this market).