Resale Housing in the Greater Sacramento Area Goes Out With a Whimper at Year-End
The average sales price still reflects a 6 percent increase versus 2017
Greater Sacramento home sales started strong in 2018 with four straight months of increased closed sales compared to the same period in 2017. The numbers began to steadily soften mid-year and finally went out with a whimper, with fourth quarter closed units falling 15 percent short of the prior year. This market information was presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.
The number of new listings entering the market in the latter part of the year remained steady while sales quietly declined. This resulted in 3,632 homes left active and available on the market on December 31st, nearly 30 percent higher than last year at this time. “Trade war commotion, wild stock market fluctuations, mid-term elections, interest rate movements, tax considerations and general market fatigue all likely contributed to sales tapering off at year-end,” says Pat Shea, president of Lyon Real Estate.
The average sales price for homes throughout the region continued a multi-year climb in the first half of 2018 and hit a new market high of $474,000 in May. Subsequently, a relaxing of that metric ensued with the fourth quarter average much closer to $450,000. That number however, still reflected a 6 percent increase in the fourth quarter average sales price year-over-year.
Shea expects a very similar sales pattern once again in 2019. “Continued job growth and upward pressure on employee compensation appear to remain in play for the foreseeable future in Northern California. Mortgage interest rates are still toggling between 4 – 4.5%, regardless of potentially adverse news on the national economic front and from the Federal Reserve. From a long view historical perspective, mortgage rates remain incredibly favorable.”
Shea also considers the increase in housing inventory a good thing. “It was way too scarce for far too long,” he added. “Buyers have jobs, money, financing and choices. The current 2.5 to 3 months of standing inventory is still widely considered a seller’s market. One can reasonably expect appreciation to fall into the 4 – 6% range once again this year.”
“Study after study suggests that a sizable number of people are highly interested in migrating from the San Francisco Bay area toward Sacramento and for a variety of reasons,” Shea said. “Those with equity elsewhere can sell and find tremendous home values in our region. They can often place residual equity in additional investments for a more secure retirement. Many others are seeking employment in Sacramento or are willing to commute, tele-commute, etc. to have an opportunity for home ownership. Population growth will continue throughout the Greater Sacramento region and housing will be challenged to keep up, consequently prices will continue to rise. We recommend that people buy or move-up while affordability remains.”
About TrendGraphix, Inc.
TrendGraphix, Inc. is a real estate reporting company based in Sacramento that uses local Multiple Listing Service (MLS) data to provide highly-visual market statistical graphs to real estate brokers, agents, and MLS/Realtor associations across the country. TrendGraphix’s programs are currently used by tens of thousands of agents in more than 250 brokerages in 48 states. For more information about TrendGraphix, visit www.trendgraphix.com.