Luxury Homes Sales Hold Their Own in 2023

Annual closed sales reflect the third-highest year on record.

(SACRAMENTO, CA) – Greater Sacramento area luxury home sales started out slowly in 2023, hit a steady pace in April through October, then settled into a typical seasonal slow down at year end. Even though the 1,488 closed units fell far short of the extraordinary numbers posted in 2020 and 2021, the region witnessed its third-best year in our market history.

The luxury space, like the market as a whole, remained steady but was constrained all year by elevated mortgage interest rate levels geared to fight inflation. This naturally created some pause for willing and able buyers. Would-be move-up sellers, understandably enamored with their existing low-rate mortgages, were also hesitant. During the fourth quarter alone, 292 closed luxury home sales were recorded throughout the region. This was nearly identical to the same period last year when the market started to cool. That number by historical standards would be viewed as quite respectable yet marked a steep 40 percent fall from the same period in “white hot” 2021.

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 8.5 percent of the homes sold in 2023 throughout Greater Sacramento fell into that luxury price range.

The current rate of new pending sales in the luxury price range indicates that 2024 could kick off at a much better pace than what the market experienced over the past few years. New pending sales for the entire fourth quarter finished an encouraging 27 percent higher than last year and at mid-month in January, sales are 26 percent higher than those of December.

Standing luxury-priced inventory remains in a positive place, too, with approximately 4.5 months available based upon the current rate of sales. This level of supply is viewed as quite balanced, meaning good for both buyers and sellers, especially in the upper-end market.

Luxury homes that closed during the fourth quarter were on the market for an average of 60 days from their original list date, up from 49 last year. They also received an average of 94 percent of their original list price, 1 percent higher than last year at this time. The average sales price for the fourth quarter was $1,435,000, an increase of 4.5 percent over last year. The average price per square foot came in at $417.46, which reflected a 4.3 increase over the same period.

Pat Shea, CEO of Lyon Real Estate, states, “Despite protracted market challenges fashioned by our currently elevated mortgage rates as well as lower rates on existing mortgages, you have to say that luxury home sales remain quite healthy in our region. Luxury sales in 2023 marked their third-best year on record. Luxury pending sales in the fourth quarter were on the rise compared to last year and have continued that track thus far in the new year. Solid employment numbers, favorable inventory levels and continued migration from other areas are keeping Sacramento in a bright spot, according to many state and national publications. Rates are already softening, and both buyers and sellers are tired of waiting. You can expect Greater Sacramento luxury home sales to flourish in 2024 and 2025.”

Homes for sale over $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.