After several years of an oversupply of homes on the market and an undersupply of qualified buyers, the tables have turned for the Sacramento and North Lake Tahoe housing markets. It may be hard for some consumers to believe, but our local real estate market has bounced back in a big way over the past year. Eager buyers are once again out in force ready to purchase their next home. But ironically, the only thing stopping them is a serious shortage of homes for sale!

We’ve come a long ways from the recessionary days when homes sat on the market for many months or even a year or longer waiting for a buyer. Today, properties are once again being snapped up quickly, often with multiple offers due to the shortage of inventory. While this imbalance is frustrating some would-be buyers, it is also creating a great opportunity for savvy homeowners who have gotten the message that now may be the best time in many years to sell their home.

In the Lake Tahoe market, listing inventory for is down 25 percent from last year at this time. In parts of the greater Sacramento area, homes for sale are down even more – as much as 50 percent in some communities. This comes as the economy gains momentum and the job market and the financial markets improve – all providing more ready cash and incentives for buyers to purchase. The result is that there are more offers for good homes for sale. Sellers are getting higher prices and properties are moving faster than they have in years.

As a result of this shortage of homes for sale in Northern California, we are back to seeing offers with no contingencies in some cases, and buyers making offers on several properties before they actually get into contract on one. Multiple offers over the asking price by 10 percent or more is not unusual in some prime neighborhoods. In one extreme example, there were 62 offers on one property in Sacramento recently.

The Sacramento and Tahoe areas aren’t alone. According to the California Association of Realtors, the state’s overall housing inventory declined in February, with the unsold inventory index for existing, single-family detached homes decreasing to 5.3 months, down from a revised 5.7 months in January and down from the 7.5-month supply in February 2011. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Adding to the strong buyer demand are record-low interest rates. Interest rates fell to historic lows again in April. Thirty-year fixed-rate mortgages averaged 3.87 percent, down more than 1 percent from a year ago, according to Bankrate.com. Fifteen year fixed rates dropped to 3.11 percent and adjustable-mortgage interest rates were 2.73 percent in April.

To be sure, the housing market is once again coming alive. Real estate agents are seeing 80-100 visitors at some open houses, multiple offers are no longer exception, but the rule in many communities, and buyers are showing a sense of urgency perhaps out of concern that record low interest rates could be heading higher before long. Some recent comments from our local managers:

• One Elk Grove home received 33 offers while another had 20 offers after just one three-hour showing on a Saturday afternoon.
• A home in El Dorado Hills listed at market value attracted 12 offers, some all cash. It sold for nearly 10 percent over the asking price and closed in 19 days.
• Another home in Placerville, listed for more than what the agents thought market value to be, received seven offers, one all cash, and went pending for 10 percent over the list price.
• The Tahoe market is beginning to experience multiple offers on properties that are appropriately priced for the market and typically for homes that are priced below $500,000.
• Said one manager: “It doesn’t seem to matter if the price range is $250,000 or $750,000. A good house that can sell and close will get multiple offers.”

Sellers need to sense the same pent up demand, excitement and urgency in the market that buyers have sensed for the past year. They need to take the long postponed leap to list their homes for sale now.

Simply put, there just aren’t enough homes on the market to meet the tremendous demand from buyers. And this is true in all price segments, from small starter homes and condos right up to multi-million-dollar Previews properties.

The days of buyers being only interested in distressed properties at bargain basement prices are over. Homebuyers are pounding the pavement looking for good, well-maintained properties at fair prices in every segment of the housing market.

The real estate market has always come down to two simple factors: the law of supply and demand, and consumer confidence. Right now, both of those are creating a sellers’ market in the Sacramento and Tahoe area. Consumers are feeling more confident as the economy picks up steam and the stock market turns in strong gains in 2012. Clearly, the scales of supply and demand are tipping heavily in favor of sellers today.

Smart, strategic homeowners understand all this, and they’re making their moves right now – not six months or a year from now. They’re the ones getting multiple offers for their home because there just isn’t a lot of competition for buyers’ attention. They’re out there now, before everyone else joins the “house party” and tips the scales back in favor of buyers once again.

If you’ve been thinking about selling your home, now is the time. I’m happy to answer any questions you may have – and to help you get the very best possible price for your home while demand is so strong.

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As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow homeowners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.