August 2020 Sacramento Area Housing Market
August 2020 Sacramento area housing market report is an excellent and exciting blog and makes you think. Every buyer out there in Sacramento should read this report. Enjoy. — JaCi Wallace
Trends in real estate are ever fascinating. Just as a flock of birds in the sky suddenly move in a different direction altogether, seemingly for no reason. The momentum in real estate is too omnipresent. Some people think greed and emotion have always driven the markets and real life in general. I think the driving common denominator of the two is desire.
As much of the west coast is on fire right now, the Sacramento area real estate market is red hot, meaning multiple offers, sales prices over list price, and more. The August 2020 Sacramento area housing market is making eyes water, much like the horrible smoke that has filled the west coast skies for weeks. The fires burning over 2 million acres, which by the way, is about the size of 10 New York Cities. The desire of buyers and sellers to buy and sell is essentially an effort to better their situation they deem needs to be better.
The Law Of Supply And Demand
Look at the green graph above. For three months in a row, housing inventory (light green) in Sacramento County has been eclipsed by the solds (dark green). That is not supposed to happen. Imagine having 10 people in a store all trying to buy the last package of toilet paper. Wait, that actually happened. Well, you know what I mean. The law of supply and demand says that the price of that package of TP must increase if there is more TP demand than there is TP supply. Whoever desires it the most will get it. Prices either increase or the product runs completely out. Now I don’t think housing supply will run out, but the August 2020 Sacramento area housing market is suggesting a change could be coming. That change could be a reduction in prices OR a spike in the already record-breaking median home price of $425,000 that August gave us.
Median Home Prices
For three consecutive months, inventory was lower than closed sales. For those same three months, the median home price in Sacramento county broke records each month. The latest home price increase is 10% higher than the August 2019 median. We know that homeowners are hesitant to sell because even though many of them have tons of equity right now. The challenge sellers see they would be put into the buyer’s shoes and suffer the headache of trying to find a replacement home amongst all this crazy competition. If homeowners only knew that they could stay in their home until they closed escrow on a replacement home.
Another perc for a potential seller is that if they are 55 or older they could possibly take their base year tax level with them to a replacement home. This property tax adjustment could potentially save them up to thousands of dollars per year. Realtors that are in love with their career know these things and can help people navigate tough markets just as well as they can in more normal markets. The trick is cutting through the noise and gaining the trust of individuals who are looking for a Realtor to trust.
Average Days On Market
Look at the chart above. Trends usually tell us a lot about what to expect about the future, so when we are seeing the opposite happen, you know that change will follow change, for better or for worse. If you see what was happening last year with the Average Days On Market, homes were sitting on the market longer and longer as the months progressed from June 2019 through October 2019, which typically means price reductions.
There was a slight dip in November, but then the OMD (on market days) continued to climb through Jan. August 2020 saw a decline in OMD’s and an increase in the percent of the final sales price vs what the seller was originally asking. Some homes do sell for under asking, but that is because the seller was overpriced, to begin with. A top-producing real estate team can sniff these deals out and on the flip side, make sure your home sells quickly and maybe even over what the comparable homes in the neighborhood sold for.
Will Prices Go Even Higher?
The August 2020 Sacramento area housing market is raging. Will prices go even higher, or will it all fall apart? I think prices will continue to go up in our area, and neighborhoods will continue to change. I know that you don’t need me to tell you that a lot is going on in the world right now. But, don’t forget that Sacramento is two hours away from one of the wealthiest areas (Bay Area) in one of the wealthiest countries on earth.
The most successful businesses in history in the Bay Area have learned this year that many of their employees can work from home now. Why wouldn’t those top earners move to a place that is close enough to commute to work if needed, but far enough away to get what they deem as a bargain on a home?
To meet your home buying and home selling desires, call Weintraub & Wallace Realtors with RE/MAX Gold Real Estate. We have over 100 years of experience in the greater Sacramento four-county area real estate market. Call us today at 916-233-6759.
— Josh Amolsch