2023 Housing Market Goes Out Like a Lamb
January 17, 2024

2023 Housing Market Goes Out Like a Lamb

There is under 2 months of supply based upon current listings and sales.

Greater Sacramento closed out 2023 with 1,971 homes posted as active and available for sale in the four-county area on December 31st. This limited amount of supply represented an extreme 25 percent decrease when compared to the already malnourished market last year at this time. The regression actually resembled the historically low inventory levels experienced in pandemic influenced years of 2020 and 2021. Total active inventory also rested 54 percent and 37 percent lower respectively, than 2018 and 2019. These years are viewed as more “normal” or “balanced” from a historical perspective.

New listings entering the market during the fourth quarter were 9 percent fewer than those of last year and certainly helped keep a lid on standing inventory. More importantly, December’s new listings fell 39 percent short of November’s implying that prospective sellers were definitely holding off until 2024. There were slightly less than 2 months of resale housing supply available on January 1st based upon the current rate of sales. A balanced market for both buyers and sellers would typically be closer to 4 months.

“Inventory typically declines at year-end due to holiday and weather-related seasonality,” says Pat Shea, CEO of Lyon Real Estate. “The magnitude of this protracted regression though, is one hundred percent driven by our less attractive mortgage interest rate landscape. Most economic analysts and forecasters predict rates to slide in a more favorable direction sometime early in the New Year. The slowly moving yet still balanced market is expected to revitalize accordingly as there is a high volume of both buyers and sellers waiting to make their move.” 

New open escrows, the other key metric for market momentum, further emphasized the current market lethargy. New opens posted for the month of December were a modest 1,064. Although this was a better result than December of last year, it was still the lowest number posted in any given month for all of 2023.

The median price for the month of December rested at $570,000, up 7 percent over last year. The average sold price came in at $640,000, 9 percent higher than the $586,000 posted last year. The median sold price back in December of 2019 was $425,000 and the average sold price was $467,000. 

Homes that closed escrow in December were on the market for an average of 41 days versus 49 last year. Successful sellers also averaged 96 percent of their original list price compared to 93% last year. Both metrics reflect a positive trajectory for sellers and are influenced heavily by the low inventory situation.

“We are much closer to a major lift in market activity than we were a year ago,” says Shea. “Winter showers and falling mortgage rates will bring spring flowers, more new listings and more new sales. Rates are sure to slide and in fact, have already started. The Greater Sacramento region remains in high demand and is still very affordable compared to other major population centers in California. Federal, state, and local employment numbers remain very strong and in the big picture, there is a shortage of both resale and new construction supply. Greater Sacramento continues to be recognized as one of the best places to live in California. Stay tuned, the local housing market future is bright for both buyers and sellers.” 

Download the MarketUpdate_December2023.

Homes for sale under $1 million

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 3,191 transactions and $1.85 billion in sales volume. Lyon Real Estate has over 750 agents in 15 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.

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