Sacramento Housing Market Report
While I did not expect to be named the #1 agent at Lyon Real Estate last month, it’s still gratifying to know the Elizabeth Weintraub Team is continuing to perform as a dominant force in the Sacramento housing market. I looked at the fact I spent a week visiting my sister in Minneapolis and a little over two weeks in Hawaii between June and July, but I never stop working regardless of where I may physically have been. That means the production we pumped out for July is pretty incredible, I suppose, given the circumstances. My team members were also visiting Europe, the East Coast and the Bay Area as well, so we all managed to get in a few trips while keeping track of Sacramento real estate.
When I look at the Trendgraphix numbers for the Sacramento June Housing Market report, I am astounded. How quickly we jumped from a median price in the 7-county-region of $389K to $400,000. Prices are continuing to climb; buyers are clawing tooth and nail to buy a home, and interest rates are increasing as well. Where will it stop? At what point will people say they don’t want to move to Sacramento or they will take a job elsewhere?
Of course, in California, where else are they gonna go that’s an affordable metro area? Or will we turn into a state of tenants paying rent to foreign investors?
This is the housing supply for our country today, from May of last year through April of 2017, courtesy of the National Association of Realtors. We are not an island in Sacramento. Low inventory is a factor in just about every major metropolitan city in America.
You know how Facebook and Photos, to mention a couple of places, shows you stuff from years ago as a blast from the past? Well, I’ve been yakking about the Sacramento real estate market inventory and how dire it is right now, often comparing it to 2005. Then it occurred to me that to properly put things into perspective, I should pull the charts.
When you see Sacramento’s median housing price rose to $317,000 for April, you might wonder what you can buy for that and where can you buy it? Some of you might question whether we’re headed for a bubble, but that’s unlikely. Our median housing price was $374,000 at the height of the market in the summer of 2005. We’re a ways from that. Plus, lending is too restrictive now and many buyers are paying cash. If you’re thinking “bubble” forget those thoughts. Can’t blame the bubble.
Many sellers are holding back listing homes in Sacramento right now for a huge variety of reasons, some valid and some not. For at least one seller, the sales price is an issue. That seller bought in 2005, so while she is not underwater, she won’t recoup her investment and can’t sell at the price she bought. This is a tough concept for some sellers to understand. They see sales prices going up and buyers lining up at open houses, and wonder why they can’t get their sales price.
The problem is we have not recovered, our economy has not bounced back to 2005 levels. We just aren’t there. We are barely covering the sales prices from 2008, and are not near the high price levels of 2005. We probably won’t be at that price point for a long time. You remember those times, right? It wasn’t that long ago that people could buy a house, move into it, decide the place doesn’t fit right anymore, sell it, make a bundle of money and go buy something else, all in the course of a summer.