What Is Happening in the Sacramento Real Estate Market?

How is the Sacramento real estate market doing? We’ll take a look at the current market trends and address one of the biggest concerns about the future: Is there a crash on the horizon?

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How is the real estate market doing in the greater Sacramento area? The numbers are in for May and June, so let’s take a look at developing trends and how those will affect the market for the rest of the summer and into the fall.

The housing inventory shortage still has the biggest impact on our market. Compared to June of 2016, there were 15% fewer homes on the market in June 2017. However, home prices are up by about 9% on average this year compared to last year.

These are important trends to pay attention to so that you can understand the emotions behind buyers’ and sellers’ decisions.

On the last day of June, there were 3,952 homes for sale in the tri-county area, which is up 12.8% compared to May 2017. That increase in inventory is normal according to the seasonal nature of our market. Again, that’s 14.7% less inventory than we had in June of 2016.

At the same time, we saw a 14.9% increase in homes that went into escrow year over year. With 15% fewer homes on the market and 15% more buyers, that’s a 30% discrepancy, which is huge. It’s no wonder that buyers are having such a hard time out there!

You may never get another chance to buy a home for less than it takes to rent one.

Some of our buyers are getting really frustrated. I keep telling them to keep at it. After all, you may never have another chance where it makes more sense to buy a home than it does to rent. From month to month, your rent payment will be higher than a monthly mortgage payment for many homes in many parts of Sacramento.

This imbalance between low inventory and high demand has also put upward pressure on prices. Prices are up 9% year over year on average. Still, in higher price points, the market moves a little slower—depending on which neighborhood you are in. Overall, though, the bigger the home, the more expensive the upkeep, so of course the market is slower in those price points. Homebuyers are extra price-conscious these days, which could also explain why those higher-end homes are moving a bit slower.

That said, more homes are being added to the market as we speak. After the 4th of July, though, our market tends to slow down. So, no matter what price point you are in, it’s incredibly important that your home is priced right and in good condition so that they sell quickly and for top dollar.

In fact, if you don’t sell fast in this market, you won’t get top dollar.

If you overprice your home and it sits on the market for more than three or four weeks without going into escrow, buyers will start to wonder, “What’s wrong with that house? Why is it still for sale?” Those doubts take all the urgency away from your sale.

Now, I’ve gotten a lot of questions lately about the market. Will the market keep going up or will it crash? Is this pace sustainable or is the market too high? People are very concerned that we are headed for another big meltdown like the one we saw a few years ago.

However, I’ve examined this question from every angle and I do not believe we are not headed for another crash.

If you would like to talk more in-depth about the future of our market or want to know more about the current market in your specific neighborhood, just give me a call or send me an email. I would be happy to talk to you!

1 comment :

  1. Thanks for sharing, nice post!

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