Resale Housing Market Sees Spring Bloom
New pending sales in April jump 14 percent.
Last year, the resale housing market jumped out to another strong start in the first quarter. Soon though, the month of April saw a 12 percent drop in both new pending contracts and closed sales compared to the same month in 2021. Standing inventory jumped a massive 50 percent in April yet new listings entering the market were only 9 percent lower than the same month in 2021. This is where a 12 month and very rapid cooling of the market began.
Resale housing metrics in April of 2023 however, showed signs that current trends may be pointing toward more stability and perhaps a rebound across the Greater Sacramento region. New pending sales in April were 14 percent higher than those of March and marked the fourth straight month of increased sales activity. New listings entering the market also increased steadily over the past 4 months with a 10 percent lift in April versus March. These key market levers left standing inventory 18 percent higher at month-end compared to March.
“The spring market is surely an evolving story,” says Pat Shea, president and CEO of Lyon Real Estate. “The number of buyers and sellers entering the market seem to be mirroring each other and cautiously testing the waters. Even though an elevated number of both continue to transact, there is still only one month of supply based upon the current rate of sales. Interesting as well is that there are often multiple offers, just not as numerous, on many properties.”
Other data points support that there is continued momentum in the resale market. Specifically, the number of days on the market for homes that closed escrow in April was 41 and improved for the second straight month. Sellers in April also received 98 percent of their original list price with this metric now representing four continuous months of improvement. The median sales price of $566,000 and average sold price of $660,000 in April both reflect numbers not seen since late last summer and also continued a 4-month climb.
Thus far at mid-May, new listings, new sales, closed sales and standing inventory are all up double-digit percentages compared to those of April. This indicates the spring bloom and perhaps total market recovery may indeed be more than a phase.
“Greater Sacramento experienced a once in lifetime record setting period of home sales and price acceleration from the summer of 2020 until spring of 2022,” says Shea. “Subsequently over the following 12 months, the Federal Reserve Bank took swift and decisive action to curb inflation and it worked. Prospective buyers and sellers alike are now getting used to the fact that mortgage interest rates may indeed retreat but not likely down to 3 percent again. Home prices are already rebounding and will continue to move upward in Greater Sacramento. Historically speaking, mortgage interest rates are not all that bad. New mortgage holders can always refinance if interest rates further improve much like they did when rates trended down during our recent market boom. Employment numbers are still solid in Northern California and many sellers and buyers are choosing to get busy with their life plans.”
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.