Early Winter Sneaking Up on Resale Home Market
Available inventory rests at merely two months of supply.
(Sacramento, CA) During the month of October, 1,355 resale homes closed escrow throughout the Greater Sacramento region. That figure reflected a 9 percent fall off from an already moderate September and marked the lowest number of monthly closed home sales since February. This marginal number of closed sales also reflects nearly a 40 percent gap between numbers posted for October of 2018 and 2019. Sales metrics from those years are perceived to be more normal than those of recent years that were substantially impacted by mortgage interest rate driven, highs and lows.
“The good news is that a pretty solid number of homes are still moving each month,” says Pat Shea, CEO of Lyon Real Estate. “There is no doubt that the traditional seasonal regression has arrived a little early due to our unfavorable mortgage interest rate levels. New open escrows at 1,364 for the month, were down only 2 percent compared to September and approximately 4 percent versus October of last year. They were of course, approximately 35 percent lower than October of 2018 and 2019.”
The number of active and available homes for sale in all price points at month-end stood at 2,671, a modest 4 percent drop since September. Inventory is also, however, 30 percent lower than last year at this time. Shea believes this likely will add to the winter market softening as “Willing buyers will have fewer opportunities and choices. Based upon the current rate of sales, the region has approximately 2 months of available housing supply. In this day and age, 2 to 3 months of supply is probably perceived as a balanced market. More inventory and choices for prospective buyers at this time, though, would surely be optimal.”
The upper-end, or one million dollar and above price point, softened a little bit more than the market in the month of October. Closed transaction figures as well as new open escrows both fell off approximately 16 percent versus September. New open escrows for the trailing 3 months combined were actually identical at 365 compared to the same period last year. Closed sales for that 3-month period however, were 9 percent lighter. Inventory rested at 495 properties available on October 31st. That left less than 5 months of supply in the upper-end, which is pretty moderate in Greater Sacramento for this price range.
The average closed sales price, when considering all price points over the past 3 months, landed at $630,000. Even with our interest rate driven market reversion, low inventory provided upward price pressure and consequently a 4 percent increase compared to last year.
New listings entering the market during the month fell off 13 percent versus September and were 13 percent below October of 2022 as well. Shea added, “Here in lays part of the problem. We know that some buyers are still out there looking and are serious about finding a home once mortgage rates fall. We also know that some sellers are waiting for the very same thing. Other prospective sellers and buyers are choosing to move forward with their life plans and know they can refinance once rates fall. Thus, the market will likely remain a bit slower but steady through the Holiday season.”
Download the Oct.2023 Lyon Market Update.
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 $1,368,365 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.