Housing Inventory Falls Backward
New pending sales far outpace new listings entering the market.
Forty-five percent fewer listings entered the market in February compared to last year at this time. Thus, even though the rate of sales also remains much lower, standing inventory across the Greater Sacramento resale housing market fell to a meager 1,808 properties available for sale at month’s end. That maps to approximately 1.5 months of housing supply based on the current rate of sales.
More buyers, however, have crept back into the market in spite of higher-than-desired mortgage interest rates. Last month, 1,504 homes were placed under contract, a healthy 23 percent increase versus January. Due to the continued scarcity of new listings, though, pending sales are currently tracking only 3 percent higher in mid-March versus mid-February. New pending sales year to date at mid-March are nearly 30 percent below last year at this time. The early trends in these key metrics all reflect that the housing market will struggle in 2023 to produce numbers seen typically even in average years.
“Greater Sacramento is still a favorable place to be in Northern California since the pandemic launched the get-more-space and work-from-home movements,” says Pat Shea, president and CEO of Lyon Real Estate. “Buyers seem to be adjusting to current mortgage rates armed with the knowledge that they can refinance if rates start to fall or simply buy down their rate at the onset.”
The number of closed sales in February was up 29 percent versus a miserable January, yet down 33 percent compared to a solid February of last year. At mid-March, total closings year to date are tracking a hefty 40 percent below last year at this time. The market did, however, start out quite strong in 2022 and trailed off considerably as mortgage rates rose swiftly throughout the year.
The average sales price across the region for the month of February rested at $604,000. That number was a notable 7 percent drop compared to the same month last year. The past 3-month average sales price of $594,000 reflected a 6 percent decrease year over year. Prices typically soften over the winter months, but the current economic climate has certainly applied more downward pressure than normal. Price stability and appreciation are likely to bounce back as the spring market takes shape, considering the low inventory issue and the apparent willingness of buyers to find their way. Homes that closed escrow in February received an average of 95 percent of the original list price and were on the market for an average of 56 days.
According to Shea, “the much slower start to closed unit numbers is surely a byproduct of lower inventory available for purchase during the months of December and January along with buyer hopes that mortgage rates would eventually improve. The market will likely warm up over the next few months, though, as fully employed buyers choose to move forward with their life plans. It will also be a great time for sellers who are willing to do the same, as competition for excellent homes will be stiff all across Greater Sacramento in 2023.”
This market information was presented by Lyon Real Estate based on 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.