sacramento 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
Sacramento May market housing trends 2019 show a continuing seller’s market dominance. There is 18% less inventory than 1 year ago at the same time. With a continuing 1.4 months of inventory with no sign of an inventory increase, The market will continue to squeeze the buyers over the summer. There is no visible trend that inventory is increasing.
Buyers better get realistic on clean offers and doing whatever it takes to win. This is a rude awakening to buyer’s agents. Buyers better get your real estate offer toolbelt on. Sharpen your tool belt and hold on, as it is going to be a rough and wild ride. Buyers who are looking for a deal, it is not going to happen.
Sacramento May Market is now rolling into June and let’s see what it brings. Buyers, stay tuned to this blog for an update soon on what’s to come. This is not a time to try and save a few bucks. This is a time where experience counts and you will need to pull a rabbit out of the hat to win in this competitive environment. Always hire knowledge and a competitive agent who lives to win for her clients and says “BRING IT.”
— JaCi Wallace
There seems to always be good news and bad news in a Sacramento real estate market update for single-family homes. The really bad news (because I always like to get the bad news out of the way first) is we have only 1,318 homes in Sacramento County for sale (not counting condos). That’s pitiful. It’s really low. The only thing that makes it worse is the fact we have so many interested buyers who would like to buy a home and there are not enough homes for sale to satisfy that demand. Which happens to be the good news: there are a lot of buyers out in the April market.
Our pending sales (in escrow, waiting to close) are 1,547 homes. The single-family homes that have sold in the month of March number 1,326. No matter how you look at these numbers, we have fewer single-family homes for sale than the number pending or the number sold last month, which means without new listings, we could shut down the real estate market in about 3 weeks. There’s your Sacramento real estate market update in a nutshell.
Tell me about it. I’ve been closing escrows left and right lately. I can’t keep a home on the market longer than a week to save my life, not that I would really want to make a seller wait any longer than necessary, but geez, I get attached to my listings and then they are gone. I have quite the large number of listings in my lineup right now that I’ve been working on, some for months.
One of my soon-to-be-on-the-market sellers asked me yesterday, how can you do my open house when you have so many properties to sell? What properties to sell? They have all sold. Every single one of them. Sold. S-O-L-D. I have not had zero listings in my inventory for maybe 10 years. OK, says the client, but you’re getting probably at least one a week. Yes, but then it sells. S-E-L-L-S. She was worried I would not have time for her.
You’re my sole focus, I assure her. Get that furniture out of the master bedroom, clean up the house and let’s sell it. She’s already done all the hard work and the repairs that were needed. Let’s get that baby on the market. If I have to be in twenty places at the same time, I can work that magic. Why, I can remember juggling 75 listings about 6 or 7 years ago. I’ve got all of this energy and no place to direct it.
If you’re looking to sell a home in Sacramento and would like to hire a top Sacramento Realtor with more than 40 years of experience, call Elizabeth Weintraub at 916.233.6759. Sellers should capitalize on this momentum.
Where is the Sacramento housing market headed? You might very well sing the answer. Where have all the houses gone, long time passing. Damn, if we couldn’t use a peace-loving force like Pete Seeger right now. I find it disturbing to read pieces by our trusted journalists because all of the articles are loaded with, well, news: Trump did this atrocious thing and Trump did this horrible thing and Trump did this other completely outrageous thing, and it’s disheartening, sad to the point of sobbing, miserable news. Lots of kudos, though, to those who are fighting the right fight, standing up, asking questions, demanding coherent answers, leading the way with progressive values.
But back to the Sacramento housing market. You didn’t come to my blog to listen to me rant, even though with our current state of affairs, it’s almost impossible not to. Our housing market is in big trouble with a capital T. I can’t get away from music today. At least it doesn’t stand for Trump. It’s a capital T that rhymes with C and stands for curtailed. Our housing inventory in Sacramento has been curtailed, diminished, reduced, cut, slashed and fallen off to the extent our pending sales are about to exceed the number of houses for sale.
You can see it clearly in the image above, copyrighted and used by permission from Trendgraphix. Our total number of houses for sale last month was 2,586. Not only is it the lowest number of homes for sale in Sacramento over the past 15 months, to give you a better comparison, it’s fallen about 80% from of our all-time high from August of 2005. Without any new listings, we could sell every house in Sacramento over the next 45 days. A month and a half. That’s tight inventory. So tight it squeaks. It’s a seller’s market.
Almost across the board, everything else is up. Pending sales (those homes that are in escrow but not yet closed) are up over last month by 17.6%; pending sales have increased over the same quarter a year ago, and same month a year ago. More homes closed in December than in January, but that’s because December’s closings were pending sales from October and November. December itself is seasonally a slow month. It’s why I take my annual wor-cation in Hawaii in December.
The second biggest story about the Sacramento housing market, apart from low inventory, is the whopping increased number of pending sales in the first two weeks of February. We are up 44.8% in pending sales over the first two weeks of January. That means demand is extremely high. Buyers are off the fences and ready to buy. Multiple offers are more the norm than not. Our inventory dropped another 8.5% since January 1. And prices are relatively stable at $208 per square foot, as it has been for the past half year.
If you’re looking to buy or sell a home in Sacramento, call the Elizabeth Weintraub Team at 916.233.6759. We can make sense of what’s going on and guide you.
We can talk about low inventory until the cows come home in Sacramento, but the biggest news in the Sacramento housing market report is that prices are slowly creeping up. You can clearly see this reflected in the average price per square foot above. What you don’t see is January 2017 average price per square foot, which is $203. Why is this relevant?
It’s important because we rarely see a price jump in January, usually it is the opposite, and January starts off a little bit slower. Our inventory is relatively the same in December as it was a year ago in December, standing at 1.1 months of inventory. This low inventory is so low if you were trying to dance the limbo under that bar, you would fall flat on the floor and likely break your back.
It’s a seller’s market in Sacramento real estate, in full fury.
This means if you are a seller, put your home on the market. Do not shuffle your feet. Get that lovely home into MLS as soon as you possibly can and start showings. Every new listing, even the ugly homes, is like tossing bird seed to starving pigeons in the park. Buyers come running from every direction to feast on table scraps. Elbowing each other.
We are seeing multiple offers on almost every listing as well. It’s not as crazy as it was at the bottom of the market, like in 2011, where we could receive 20 or 30 multiple offers on a single listing. I’m seeing more like 2 to 4 offers per listing. That seems much more manageable. If it’s a fixer property, the number of multiple offers tend to be higher.
But what difference does it really make how many offers a seller receives? As long as there are two offers, a seller can negotiate with the Seller Multiple Counter Offer, which has been known to bump up the price. Everybody wants what somebody else wants. And hey, bottom line, we only need one committed, strong and qualified buyer anyway. While it’s nice to tell your friends how many buyers fought over your house, it’s much better to say you got top dollar and no hassles.
If that’s your objective, call a top producer Sacramento Realtor with more than 40 years in the business. Call Elizabeth Weintraub at 916.233.6759.