There's more bad news for people trying to buy their first home in the Sacramento area. The inventory of foreclosures—which are typically discounted—continues to decline. And more investors are buying up properties.
About 2,200 properties received foreclosure filings in the Sacramento area during the first half of 2017. That was down 35 percent from a year ago. And it was a 48 percent drop from two years ago.
In June, 434 properties received foreclosure filings. That was down 41 percent from a year ago. In fact, June was the 23rd consecutive month of year-over-year foreclosure activity decreases in the Sacramento area.
"This is a sign that even the most distressed part of the market, there's very little inventory available and that doesn't bode well if you're trying to get your foot in the door," says Daren Blomquist with research firm ATTOM Data Solutions.
"Foreclosures are low but interest in buying foreclosures is strengthening and getting hotter and we see that in Sacramento," says Blomquist.
He says 36 percent of the properties that went to foreclosure auction between January and June were sold to investors.
"And that may not sound like a lot, but that's a high percentage, says Blomquist. "We typically see more like 20 percent or less. It's a risky place to buy—you have to buy with all cash and you're not able to inspect the property beforehand."
The data show property investors are swooping into Reno, buying up homes lost to foreclosure at public auctions.
"It was the highest market in the country with 81 percent of the properties that went to the foreclosure auction selling to third-party buyers," says Blomquist. Nationwide, only 38 percent of foreclosures went to third-party buyers...or investors.
"That speaks to the Reno market being really on fire when it comes to the housing market," says Blomquist. "Not a lot of inventory available for sale, people are looking for bargains, and one way to get a bargain is to go to the foreclosure auction."