GREATER SACRAMENTO HOUSING MARKET HEATS BACK UP
New pending sales above $750,000 jump 65% over last year
Potential home sellers and buyers alike – throughout the entire Greater Sacramento – face a golden opportunity to make their moves in 2018. Buyers continue to snap up homes at a rapid pace while available inventory has improved in all price points compared to this time last year.
Greater Sacramento Has Low Inventory
Market-wide, inventory at the end of February reflected 2,895 homes active and available for sale. This number was 13 percent higher than one year ago and left inventory at its highest level since November.
Homes Priced Below $400,000: There is currently 1.3 months of inventory below $400,000 across the entire region based upon the current rate of closed sales.
Homes priced $400,000-$750,000: The move up market — homes priced between $400,000 and $750,000 — isn’t much better, with only 1.8 months of inventory.
Homes priced above $750,000: Homes priced above $750,000 have rested at just over 6 months of stock over the past few months.
The number of properties available for sale however, is only one metric in the equation.
Greater Sacramento Pending (In Contract) Sales
The current rate of new pending sales is the other part of determining the health of the market. And currently, this is significant.
Below $400,000, February enjoyed 1,206 new pending sales, a 19 percent increase in sales compared to January. This also marked an 8 percent increase compared to February of 2017.
The move-up market placed 908 homes into escrow last month which represented a 15 percent increase compared to January and a notable 32 percent increase versus February, 2017.
Properties above $750,000 across the region joined the race last month in a big way as 172 new pending sales were posted. This activity represented an extraordinary 41 percent increase compared to January and a 65 percent leap over February of last year. It was also the highest count for any month since August.
The average sales price across the region for the month of February was $425,000. Regardless of the recent activity, the average price has maintained relative stability as it has consistently fluctuated between $418,000 and $437,000 over the past 10 months. Over the past few months, homes have sold for approximately 98 percent of original list price in just over 40 days on the market.
What’s coming to the Greater Sacramento Real Estate Market
Interest rates are expected to continue to rise this year; so are the number of people coming from the Bay Area. Prices have gone up and will continue to do so. Not even the impact of recent tax law changes have put a damper on the Greater Sacramento Market.
If you’re going to sell your Greater Sacramento home, do it before summer. During the summer is slow and your house is likely to sit on the market. If you wait until summer goes by, don’t wait too long! You’ll end up in the holiday market which is not the best either.
Bay Area Housing Market
This isn’t a scientific, calculated bit of information. Just my opinion so take it as you like.
I think the Bay Area has hit its peak. It’s not in for a landslide and it’s definitely not a bubble. But the news is reporting that tech companies are going out of the state to establish new offices. They won’t continue to pay such high salaries that are required to live in the Bay Area. Especially since $400,000 yearly is considered middle class. Once info hits the media, it’s been happening – whatever it is – for a while. In other words, news takes time to get around. So I don’t think tech companies going on tours of others cities is new.
As interest rates rise, without the mortgage deduction of the past, and prices continuing to skyrocket, I think we’ll start to see a leveling off of the Bay Area real estate market. Predicting when that will happen is another story; but my take on it is that we’ll start to see it summer of 2019, when we look back on the beginning of the year’s stats.
I’m still really surprised when I see the home prices here in the Greater Sacramento market. Shocked, really. I saw a beautiful house today on a private golf course in Roseville. 3266 square feet for $645,000. In the Bay Area, you’d need to add a zero.
I posted a photo of a house on instagram and one of my peers from the Bay Area said, “But then you have to live in Roseville.” It’s more about the housing costs – although that’s a huge reason. Roseville gives people a new lifestyle – not one of working to pay the mortgage; but time to spend with family, going out to dinner, enjoy the rivers, lakes and mountains here. There’s a lot of outdoor activities. It’s different here. I keep saying that, but it is. And I love it.
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