Record Low Inventory Threatens Region’s Home Sales
Fourth quarter closings up 21% year-over-year.
A strong fourth quarter wrapped up yet another banner year of robust home sales for the Greater Sacramento region in spite of the pandemic interruption experienced most severely during the months of March through May.
Closed units from October through December were 21 percent higher than the same period last year. New open escrows logged for the quarter were 26 percent higher year-over-year, indicating that buyer enthusiasm remains unbridled. This market information was presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.
Conversely, the number of active and available homes on the market declined steadily in the second half of 2020. New listings posted in the fourth quarter were a significant 21 percent greater than those of last year but just could not keep pace with buyer demand. These seller and buyer metrics left the market with a sparse 1,255 homes active and available on the market at December 31. That is half of what was available last year at this time and a mere one third of the standing inventory remaining at the end of 2018.
“Inventory typically declines at year end due to holiday and weather-related seasonality,” says Pat Shea, president of Lyon Real Estate. “This, however, is uncharted territory. Our market remains in a very precarious place heading into 2021 as housing supply has reached its lowest mark in modern history.”
The average sales price for homes closed throughout the region continued a multi-year climb and hit a new market high of $542,000 for the fourth quarter. That number reflected a 15 percent increase year-over-year. Homes that closed escrow in the fourth quarter were on the market an average of 22 days, nearly 50 percent fewer that last year. Sellers averaged 100 percent of their original list price. The average price per square foot was $272, 11 percent higher than last year.
“Greater Sacramento is lovely, trending up and still affordable compared to other major population centers in California,” says Shea. “Resale housing inventory throughout the region remains at an all-time low with no relief in sight. Elevated migration from the congested coastal areas, a solid job market for the home-buying and selling public and the Federal Reserve’s commitment to bargain-basement interest rates will continue to fuel red hot buyer demand in 2021. Consequently, the region is likely to see another year of double-digit price appreciation. These conditions scream seller’s market and present the perfect opportunity for existing property owners to find their dream home, dream location and perhaps both. They may need to procure bridge financing or acquiesce to a double-move in order to achieve their goals. It will though, be well worth the effort.”
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.