Sacramento Housing Market Report
January has barely left us, and the snapshot of the Sacramento housing market for January 2018 mirrors pretty much what I have been experiencing. Some of you know, of course, that I spent the months of December and January working from my house in Hawaii. Not on Hawaii real estate as some incorrectly assume. I am not licensed to sell real estate in Hawaii. No, no, no, I am a Sacramento Realtor, and I work on Sacramento real estate from our vacation house.
I do such a bang-up job of it that I placed as the #1 Agent at Lyon Real Estate for January, and I wasn’t even in town. To put this into perspective, we have around 1,000 agents at Lyon.
Welcome to the December 2017 Sacramento Housing Report. The first thing that strikes me about the numbers for last month is the fact the pending sales have increased over the same month a year ago. The pending sales for this December are up by 14% over December of last year. This indicates a much stronger demand at the end of the year than the demand that existed a year ago.
The second thing I noticed is inventory dropped in December by 24% over November. But most of that is people saying, what the heck, I want to spend Thanksgiving and Christmas without people traipsing through my house. It’s seasonal and typically more people take their homes off the market over the holidays.
The Sacramento housing market trends November 2017 shows the underlying story in Sacramento real estate. You have to dig around a little bit to find this chart, but this shows the last 15 months of average square-foot prices in Sacramento County. Over the past year, those prices have increased 11.4%. People are quick to jump on bubble theories, but that’s only because they don’t really understand what happened when the market crashed. They equate rising prices to the market crash, and that would be an untrue and unfair assessment.
It is only a matter of time before our rising California home prices will reach our record high set in 2007, says C.A.R. Chief Economist Leslie Appleton-Young. In fact, Appleton-Young says our homes prices will surpass that pinnacle during the next 3 to 5 years. We are still sitting with low inventory and fewer numbers of buyers who can afford to buy a home. According to C.A.R., almost 3 out 4 buyers cannot afford to buy a home in California. That’s staggering to think about. Not to mention, any little jump in interest rates could further dampen enthusiasm to buy a home in Sacramento.
Everybody and their uncle has a story to tell you about the September 2017 housing report for Sacramento. But the one place you can always count on to give you accurate information is Trendgraphix. However you decipher it is up to you. I’m sure there are agents out there who will look at the square-foot-cost chart in Sacramento and predict a bubble, and I’d say they are crazy because the conditions that created a bubble do not exist today. We don’t have a plethora of 100% financing, and a little over half of all transactions are conventional, with the rest about 12% cash, 25% FHA loans. Our qualification guidelines are stringent.