Greater Sacramento Luxury Market Update
Luxury Homes Keep Moving
New open sales nearly identical year over year in the third quarter.
(SACRAMENTO, CA) – The Greater Sacramento region continues to enjoy a fairly steady rate of luxury home sales in spite of persistent economic headwinds stressing both the local and national landscape. Our market benefits from persistent move-up activity and residual migration from other areas of California. Upward pressure in average sales prices across the state in large metropolitan areas over the past few years has turned eyes in our direction. That, combined with other quality-of-life issues, has made Greater Sacramento a favorable destination for luxury home buyers.
Closed escrows year-to-date at mid-October, are down a precipitous 30 percent compared to the same time last year. The 452 sold and closed sales in the third quarter did, however, mark only a 9 percent drop versus those of last year at this time. Closed sales for the month of September alone were only 6 percent shy of last year. This signals the market may have paused its slide for the time being.
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. Slightly more than 9 percent of the homes sold year to date throughout Greater Sacramento fall into that luxury price range.
Successful luxury home sellers received an average of 96 percent of their original list price in the third quarter. This was up just a bit from 95 percent last year and slightly better than 94 percent for the same period in pre-pandemic, 2019. The average time on the market for luxury-priced properties that closed escrow in the third quarter rested at 39 days, compared to 34 in the third quarter of last year. The combined average sales price for July, August, and September landed at $1,452,000 which reflected a 4 percent increase versus the same period last year.
New open escrows during the third quarter of 2023 held steady as 427 luxury-priced properties were placed under contract. That figure was nearly identical to the third quarter of last year and more than double those that were posted in the third quarter of pre-pandemic 2019. September’s new open escrows alone, although 8 percent fewer than those of August, were 15 percent greater than September of last year.
Luxury home buyers are fortunate to still enjoy an ample number of active and available luxury-priced listings offered on the market. On September 30th there were 483 properties listed, just 8 percent fewer than last year. That number is quite reasonable based upon the steady rate of sales. A balanced market, especially in the upper end, typically is considered to have 4 to 6 months of supply. Present market metrics reflect that we are currently hovering at just below 4. For comparison, in 2019 the market was north of 6 months.
“New luxury priced listings entering the market were approximately 11 percent fewer in the third quarter than those posted last year,” says Pat Shea, CEO of Lyon Real Estate. “The good news is that new listings are keeping just the right pace with our current buyer demand,” Positive employment figures are pervasive throughout Northern California, and many people are willing and capable of purchasing luxury properties. One day, mortgage interest rates will start to retract. When that time arrives, rest assured that once again luxury homes will sell like hot cakes. It may be a better idea to secure your dream home now and refinance later.”
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 700 agents in 16 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.