Wondering How Much to Offer to Buy a Home in Sacramento Today?
One of the hardest decisions for a home buyer is how much to offer to buy a home in Sacramento. Buyers see the list price but it doesn’t mean much to them. Not being in the real estate business, many buyers look to their agents for advice while others soak up bad information on cable TV. All real estate is local. That means only one thing: The only advice that matters is that which pertains to the Sacramento real estate market. Not Los Angeles or Miami or Chicago.
A seller’s market persists in Sacramento. See my Sacramento Housing Market Report for February 2018. We’ve been in the midst of a seller’s market for a long time now. We have very few homes for sale. High demand. Remember your high school classes about the laws of supply and demand? When supply is low, demand goes up. When supply is high, demand goes down. Supply = house for sale. Demand = qualified, ready, willing and able home buyers.
For example, to help to determine how much to offer to buy a home in Sacramento, you should first look at our local real estate market. Today, for instance, we have 1,822 residential listings in Sacramento (versus over 10,000 homes from the height of 2005). We have 1,501 pending listings. A tight market exists. Many listings receive multiple offers. The starting point for most purchase offers in Sacramento happens to be list price.
Interestingly, more than 72% of all listings sold within the first 30 days in Sacramento (over the 30 days). The list-price-to-sales-price average ratio for all of these listings? 100.55%. Obviously, the more desirable the home, the higher over list price a buyer needs to go. Swamped open houses and many buyers ooh-ing and ah-ing tends to result in a lot of offers bubbling up on the horizon.
Unfortunately, comparable sales won’t help much in our seller’s market. You need to rely on your agent’s advice now more than ever, especially if you do not have access to accurate information about the local market. Zillow can’t really help you, either. I’ve seen it incorrectly tag certain neighborhoods as buyer’s markets.
So, to figure out an offer price for a Sacramento home today, especially newer listings, buyers may need to begin at list price. Then, determine the number of competing offers and plan accordingly.