The February 2020 Sacramento Area Housing Report
The February 2020 Sacramento Area Housing Report, everyone is talking about it. Wall Street is in meltdown, toilet paper doesn’t exist at Costco and my friend just in a panic bought three firearms. Whoa! The majority of us are handling this current COVID-19 virus pretty well. Others, are of course being impacted on a variety of levels. There will always be different ranges of reactions. When isolated, it is often challenging to know the reality of the housing market. This blog serves to be a source of information. So let’s talk about interest rates. Yes, they spiked up slightly (still under 4%) a week after they dropped to a record low 3.13%. This is in part to a backlog of loan applications (up 55%) that lenders cannot keep up with.
The only tool the lenders have to slow down the demand for refinancing and purchase loans is to raise their rates. This goes against the way it is supposed to work naturally. I took this past weekend to swim in a tub of coffee, scour housing reports and talk to resources to find out what is happening. These efforts are to provide you with the clearest picture of what is developing in the housing market. The verdict, demand is still very high and mortgage rates should fall back down to an extreme low once lenders get through these files and applications.
High demand for homes is still present. Sacramento is still in as much in demand as it has been over the last several years. This virus has not changed that. The housing market is absolutely on fire, not by opinion, but by the numbers. It was going strong before the COVID-19, but now, prices and demand shown below in the February 2020 Sacramento Housing Market Report are through the roof. The market is always good for someone. It is always prudent to hire the best real estate team and put a plan together whenever possible.
Real estate is historically a safe haven for investment during times of crisis and now even professional investors from abroad are putting money into US real estate to sidestep public markets, that are shedding value. These people watch their money very carefully and it is their daily job to monitor it. I think watching what they are doing is a good indicator of the overall health of the market. It is actually driving our market even harder!
This virus came on fast, and it is understandable that folks would be a little freaked out. But when the dust settles as systems are being put into place to defeat this situation, the humming of the housing market will return to that recognizable “hum.” There is just so much noise right now it may not be as easy to hear it. Based on the numbers, this is not a time to fear buying real estate; but of course, always be sure to have a great real estate team.
Life is not all flowers and banana’s, of course. Many people are suffering right now. Empathy is overflowing from our homes to all of those hurting right now. So many people will be keeping things moving, for the benefit of countless families and industries. We are so lacking in inventory. New listings are down 3.3% from last month and 3.5% from a year ago and sales are down a whopping 41.3%. I imagine some Realtors will be leaving the business this year based on the housing shortage and multiple offers making it a very competitive market. Did I mention we have over 100 years of experience, dozens of awards?
The picture is clear there were 14% more accepted offers in February 2020 over February 2019. This was a 10.8% increase in Median home prices from February 2019 to February 2020 in Sacramento County. That is a 5.3% increase from January to February alone. We don’t even know what the future holds, but owning a home is a part of the American dream for so many. Many first time buyers are choosing to buy instead of rent as it is more affordable in some cases. This is supply and demand, the same story we have been telling for years.
February 2020 is looking at the percentage of what sellers are getting vs what they ask at 99%. The spring market started last month, folks. A well oiled, well-connected machine like the Weintraub & Wallace real estate team is the best tool you can have in your tool belt, this year. When the gloves come off, your nails better look nice.
— Josh Amolsch