Luxury Home Sales Remain “Relatively” Solid
Second-quarter closed sales more than double those of pre-pandemic 2019.
The Greater Sacramento region tallied a very respectable 501 closed luxury home sales throughout the second quarter of 2023. The reported number of transactions undoubtedly fell short of the blistering 758 posted in the second quarter of last year and 684 over the same time frame in 2021. The golden years though, were heavily fueled by extraordinarily low interest rates and the extended work from home phenomenon. This year’s second quarter numbers are more than double those of pre-pandemic 2019 and all prior years on record.
There is also good news in the fact that despite the doubling of mortgage interest rates over the past year, new pending sales are only 12-15 percent lower than second quarter totals for that metric in 2022 and 2021. Second quarter new pending sales were also more than double the number reported for the period in 2019.
Luxury Portfolio International recognizes home sales above $1,000,000 throughout the Greater Sacramento region as properties that map most accurately toward consumer expectations regarding luxury real estate. Approximately 8 percent of the homes sold year to date fall into the luxury price category.
This steady activity suggests that even with the protracted uncertainty around inflation and mortgage interest rate trajectories, Greater Sacramento will likely experience another solid year of luxury home sales totals. The average sales price for the second quarter rested at $1,458,000, a slight 2 percent increase versus last year. The luxury market is also considered to be reasonably balanced for both buyers and sellers with approximately 3 months of supply available at the current rate of sales. Luxury homes that successfully closed escrow in the second quarter did so at an average of 45 days and received 96 percent of the original list price. These metrics are considered very reasonable by historical standards.
“A persistent amount of activity and opportunity remains for luxury home buyers and sellers throughout Greater Sacramento regardless of the extended debate and maneuvering relating to national economic and monetary policy,” says Pat Shea, president of Lyon Real Estate. “The next few months will be interesting though, as both new pending sales and new listings entering the market in June were somewhat softer than those of May. It is not unusual to see stops and starts in any given month throughout the year. Thus, a look at the entire third quarter will be in order to determine where the market is headed for the remainder of 2023. There were never any illusions that luxury sales could maintain the ‘red-hot’ pace that surfaced in mid-2020 and persisted through early last year. The Northern California economy remains strong however and the interest rate situation will eventually sort itself out. One can certainly expect luxury home sales throughout Greater Sacramento to remain consistently solid for the foreseeable future.”
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.