Resale Home Market Bounces Off Bottom
January new pending sales jump 32 percent from December.
The Greater Sacramento resale housing market looked to be heading back on track during the month of January as new pending sales saw a healthy 32 percent lift versus those posted in a brutally weak December. The new sales reported were still however, approximately 25 percent lower than those recorded in January of 2022 when the market was still enjoying a record run.
Fortunately, 1,232 new resale listings also came to market in January across the four-county area. This marked a 29 percent increase in new listings versus an anemic December yet fell a massive 39 percent shy of January 2022, when move-up activity was reaching its peak. Regardless, the region still held only 2 months of standing inventory based upon current buyer demand. That number is widely considered low regardless of other market metrics.
The region’s average price for closed sales in January landed at $590,000, relatively flat versus December yet still a significant 6 percent drop from one year ago. More notably, average and median prices have dropped quite steadily since May of last year but perhaps things are starting to change.
“Sales activity and prices typically soften over the winter months but this year those trends were much more dramatic,” states Pat Shea, CEO of Lyon Real Estate. “The swift and steady increases to mortgage interest rates throughout the second half of 2022 and record rainfall this January really pumped the brakes on our market. You can expect a continued rebound in sales yet lower than average inventory and more stability with prices this year.”
The entry level – properties below $500,000 – remained the tightest on January 31 with 23 percent fewer properties in standing inventory compared to those at year end. The rate of new sales in recent months has consistently met or exceeded the number of new listings entering the market.
“More opportunities for first-time buyers are mission critical for a healthy market. Entry-level and move-up buyers are the driving force for our entire housing ecosystem,” says Shea.
Market activity in the new month and as of February 11 continues to reflect that buyers and sellers alike are now choosing to power through and get on with accomplishing their housing goals. New listings month-to-date are up 12 percent versus this time in January and new pending sales are nearly double. This naturally is placing a strain on standing inventory that will likely remain throughout 2023.
“It certainly feels like resale market activity is ratcheting back up and the ongoing struggles with inventory, prices and mortgage interest rates are ready to resume,” says Shea. “These market conditions will not change dramatically anytime soon. Prices will resume their climb and interest rates are quite unlikely to fall again to those recent and rare lows. Waiting will surely cause you to get less of a home than you wanted or perhaps push you out of the opportunity altogether. Soon to be home sellers should also consider hitting the market now, as inventory still remains quite low and buyer activity is clearly rebounding.
“You still want to price reasonably, prepare for excellent showing condition, and select a very good agent in order to negotiate your highest and best contract.”
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 4,236 transactions and $2.55 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 $1,209,365 to local nonprofits.
About TrendGraphix, Inc.
TrendGraphix, Inc. is a real estate data analytics company based in Sacramento that uses local Multiple Listing Service (MLS) data. Trendgraphix provides highly-visual performance and 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 brokers and agents in more than 300 brokerages across the nation. For more information about TrendGraphix, visit www.trendgraphix.com.