Housing Market Calming Yet Remains Steady
Prices show signs of stability though inventory remains low.
Last year, home sales throughout the entire country were accelerated due to extraordinary circumstances created by the pandemic. Consequently, Greater Sacramento has experienced an epic period of demand due to the work-from-home movement, coastal area migration, record low mortgage rates, strong employment numbers and upward pressure on wages.
Even though the resale housing market jumped out to another strong start in the first quarter, April soon saw a 12 percent drop in both new pending contracts and closed sales compared to the same, albeit red-hot, month in 2021. Standing inventory jumped 50 percent in April yet new listings entering the market were 9 percent lower than the same month last year.
“It is surely an evolving story,” says Pat Shea, president and CEO of Lyon Real Estate. “Keep in mind though, that there is still only one month of supply based upon the current rate of sales and there are still multiple offers, just not as many, on most properties.”
Other data points support that there is continued momentum in the market. Specifically, the number of days on the market for homes that closed escrow in April was 15, the lowest per month since July of last year. Sellers in April also received 103 percent of original list price, a metric among the highest since last July. The median sales price of $620,000 and average sold price of $696,000 in April both remained pretty consistent with those of March, which signal some price stability may be taking shape and that robust sales continue in all price points. The median price in April was 17 percent higher and the average sold price was 16 percent higher than those of last year.
“Greater Sacramento has seen a record setting period of home sales and price acceleration,” says Shea. “Upward movement in mortgage interest rates is certainly impacting but not collapsing the market. All other factors that have influenced the high volume of sales in the past few years remain in play. Year to date figures on May 15 show only an 8 percent drop in both new pending contracts and closed sales compared to 2021. The 3 percent fall off in new listings taken indicates a flood of inventory is not very likely. Many homeowners who have purchased or refinanced at extremely low interest rates are unlikely to place their home on the market soon.
“The average mortgage interest rate over the past 50 years, according to Freddie Mac, is 7.78 percent and we remain well below that at around 5 percent. The median family income over the same period has risen consistently. Prices will continue to move upward in Greater Sacramento and perhaps mortgage interest rates as well but hopefully, at a modest rate. Thus, now is still a very good time to purchase a home or move-up in Northern California.”
This market information was presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.
About Lyon Real Estate
Lyon Real Estate is the leading independent real estate brokerage company in Greater Sacramento (Sacramento Business Journal). We are proud to be homegrown, privately owned, and internationally known. Lyon has served the area for over 75 years. Last year, the company closed a total of 6,039 transactions and $3.39 billion in sales volume. Lyon Real Estate has over 800 agents in 17 offices located throughout the region. The company is a member of the Leading Real Estate Companies of the World®, the largest network of premier locally branded firms, as well as LeadingRE’s Luxury Portfolio International® program. In addition to its real estate services, Lyon Real Estate offers RELO Direct, a global relocation program. Since 2015, the Lyon Cares Foundation has contributed more than $1,017,900 to local nonprofits.
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.