Admin

Sacramento Housing Market

By
Real Estate Broker/Owner with Lotus Real Estate Services CalBRE 01725627

The Sacramento housing market is hot.   We have seen increases of 30% in some areas of our market; the median price in Placer County in June 2013 was $370K up from $340K in May.  In Sacramento county the median price in June was $246K up 2.5% from May.  El Dorado county median home price was $340 off from May's high of $350K.

So what's going on and what does it mean to you?

Sacramento Tri County Real Estate Trends

Let's take a look at a bit more market information as part of answering that question:

This chart shows the number of homes for sale (light bars), the number of homes sold ( darker bars), the number that are pending sale (red trend line) and the number of new listings added per month (blue trend line).

Notice how the light green bars are starting to get taller from Feb 2013 to June 2013.  That is increased inventory.

In June, the number sold was substantially less than the number available.  This could slow the overly hot increases in prices.

 

Let's peel the onion back a bit farther and look at what happened in June in different price ranges.

Sacramento Tri county Sales by price range

Here we are looking at the number of homes for sale (blue bars) and the number of homes sold (red bars) by price range, in the Tri County Sacramento market for the month of June 2013.

There were roughly the same number of homes sold in in the price ranges from 0 to $300K  as there were from $300K and up.

Looking at this another way, there is less than a month's supply of homes below $300K.  Those of you looking to buy in this price range know this all to well.  Multiple offers well over asking price within a few days are the norm.  The market in this price range is white hot.

And for those of you fortunate enough to have homes in the upper price ranges, the months of supply has dropped from years, to about 8 months for $1M+ homes and about 4 months for homes in the $750K to $1M price range.  

Another dimension of the market that is important to understand is the price per square foot trend.  In the depths of the housing depression, all prices were lower across all price ranges and there was not a lot of difference among them.  That has changed.

Tri county price per square foot by price range

As you can see, homes in the 1M+ price range had an average price per square foot of $302, while homes in the 0 to $100K price range had an average price per square foot o $79.

Now before all of you with high end homes get too jubilant, I have to remind you these are averages across all three counties and there is quite a bit of variation from location to location. (if you'd like help understanding the market value of your high end home, we can certainly help, and we can show you how we get upper end homes sold quickly and at good prices)

The good news for all of us is the market appears to be returning to some semblance of "normal"

 

So what's likely to happen the rest of this year?

In my opinion, the number of houses for sale will continue to increase for several reasons.  Just drive around and you will see lots and land that have sat dormant for years being prepared by builders for new home construction.   And of course, as prices rise, more people who wanted to sell but could not, now can.

Prices increases will slow down. Affordability and availability of money for mortgages is another huge factor in moderating price increases. Mortgage rates have gone up, essentially reducing a family's purchasing power by about 10%.  Slowing house price appreciation is a really good thing; it is not possible to sustain 30% + per year increases without creating another bubble.

Last but certainly not least, employment drives much of our economy.  We are bringing our service people home, and finding them good jobs that they deserve is already being advertised on TV and radio.  The increase in housing will add a great deal of jobs, not just in construction, but in the materials, home improvement, landscaping, painting, and a myriad of other professions and services.

Hang on , it's going to be a lot more fun than it's been for quite a while.

Posted by

Show All Comments Sort:
Richard Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Yes to this post...However, I am still monitoring this to see if it holds up over time...

Jul 14, 2013 12:08 AM
John Pusa
Glendale, CA

Byron - You are right some markets increased up to 30%, but how long the increase will continue. Thanks for the excellent information about Sacramento, California housing market.

Jul 14, 2013 03:37 AM