November Market Update

I apologize for being a couple of weeks late this time. November numbers came out about two weeks ago.
So, here we go: (Graphs are all for Sacramento County.)
Graph 1: As you can see prices increased to north of 400k in April and more or less stayed the same. That is the red line I'm referring to. Green line is for what sellers were asking for their properties. There is always a large gap between these two numbers. 
So,  you might ask where do these numbers stand compared to say past ten years? Let's take a look at graph #2

Graph #2 shows average price of sold homes since ten years ago, 2008. In 2008 average price of sold home was approximately 200k. Now they're a bit over 400k. Yes if sellers held on to their homes, they got twice as much as 2008 in 2018 for their homes. 
"Okay Bahman, are they still going up? That's what I want to know." Wait we're getting there. Let's take a look at graph #3.

Graph #3 is showing us home inventory in Sac County. As you can see it has been increasing since April. We went from 1.5 in November of 2017 to 2.2 in November of 2018. If I have to bet, I'd say next few months it's just going to go up. That means homes are going to go on the market but market will not absorb them and they will appear on the market again next months. If homes go on the market and buyers don't buy them,  that is when inventory increases. The reason that since April, homes have been going on the market and buyers have not been buying them as fast,  is high prices. Buyers are either not willing or not capable of buying them. That's causing the increase in inventory. Sellers have been witnessing this steady increase and are not willing to accept the reality that buyers can't / don't want to buy this high any more. I see and deal with them all day long in the field. I've seen homes that didn't sell for the price sellers were asking for it in 2018 and sellers decided to "take the house off the market and try it again in spring of 2019". Okie Dokie. Let's see how that works out. My estimate is we have the peak of the market behind us in 2017-2018. We are heading for a correction in 2019 and not for a price increase. I could be wrong. My crystal bowl is broken. 

And here is graph #4 showing us inventory in the past ten years. See in the past, we did have high inventories (close to 4 months in 2010) but prices still rose because prices were low and buyers could buy. That is not the case for 2018-2019 any more. Prices have doubled and buyer are thinking "You know what?I think I'll just rent or wait till the summer and see what happens".This is my two cents. Don't think we're going to witness much price increase any more.