Resale Home Sales Continue to Chill
Available inventory sits at only 2.5 months of supply.
During the month of October, 1,474 resale homes closed escrow throughout the Greater Sacramento region. That figure reflected a 20 percent fall off from an already moderate September and extended the now 5-month slide for monthly home sale totals. This meager number of closed sales also reflects nearly a 40 percent gap between numbers posted for October of 2018 and 2019. Sales metrics from those years are perceived to be more normal than the recent pandemic period.
“The good news is that a pretty solid number of homes are still moving each month,” says Pat Shea, CEO of Lyon Real Estate. “There is no doubt that a traditional seasonal slowdown is being markedly enhanced due to unfavorable mortgage interest rate movement. New open escrows for the month were down only 5 percent compared to September, yet were nearly 30 percent lower compared to October of 2019 and 2020.”
The number of active and available homes for sale at all price points at month-end stood at 3,761, a 5-percent drop since September. Inventory is also approximately 25 percent lower than the same time in 2018 and 2019. Shea said he believes this could add to the winter market softening as “willing buyers will have fewer opportunities and choices.”
“Based upon the current rate of sales, the region has approximately two-and-a-half months of available housing supply,” Shea said. “In this day and age, two to three months of supply is probably perceived as a balanced market. More inventory and choices for buyers at this time though would surely be better.”
The $1 million and above price point performed somewhat similar to the market as a whole in the month of October. Closed transaction figures as well as new open escrows both fell off approximately 15 percent versus September. Those metrics are also tracking approximately 15 percent lighter for the trailing three months combined, compared to the same period last year. Inventory rested at 514 properties available on October 31. That left approximately four to five months of supply in the upper-end, which is moderate in Greater Sacramento for this price range.
The average closed sales price when considering all properties decreased slightly over the past 3-4 months, yet averaged $630,000 in October. Even with the interest rate driven market reversion, this still left a 4 percent increase compared to the same month last year. The median price rested at $555,000 last month and was up less than 1 percent year over year. Typically, fewer listings and sales, especially in the upper-end, occur in the fall and winter. This leads to seasonal price softening that starts to rise again come spring.
New listings entering the market during the month fell off 19 percent versus September and were 30 percent below October of 2021.
“This is counter intuitive, as buyers are still out there looking and are serious about finding a home,” Shea added. “Others remain on the sidelines waiting to pounce as soon as any kind of drop in mortgage rates occurs. Any prospective seller who may be considering moving up, downsizing or changing locations sometime within the next year should think about it right now. Who knows what 2023 will bring.”
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.