April Housing Update and Why People Are Moving

What's the Forecast for the Sacramento Real Estate Market for into April 2024

Current overview of the housing market in Sacramento

As of March 2024, we are in a sellers market. Listings have increased by 25% compared to last year and inventory is up 15% compared to Februrary.  However the number of homes sold has gone down by almost 14% year over year.  Though it has increased by 10% from Februrary.

How have the prices changed recently particularly the sold price per square footage?

The average price per square foot was $322 in March which is up almost 2% from February. and over 6% from last year.

This shows us that homes values are going up which is a great sign for sellers and something really important for buyers to think about.

What do these inventory changes mean for the market?

The increase in inventory shows more options for buyers which great news for first time home buyers and those looking to get into the housing market.  However the market remains competitive which means much of the new inventory is being sold really quickly.

Average Days on Market for March

The average days on market for March was 3 days which is down almost 23% from last year.  

This tells us that homes are selling faster.

Sales Price To List Price Ratio

Sellers are getting closer to the list price at almost 99% which proves how competitive the Sacramento Real Estate Market is., however on average it is still not being hit due to the following factors:

  • There are less buyers on the market
  • Unrealistic expectations from homeowners putting their house on the market as they are wanting more than it is worth.

Housing update stats

How does the current market compare to the same period last year?

There are listings and greater choices for the buyers in comparison to last year.  However we have to remember that despite the low inventory it is still very much a sellers market but alot more opportunites for buyers.

The Impact of Interest Rates on the Sacramento Real Estate Market

Interest Rates are a huge factor as to how much buyers can afford.  Although higher rates can slow the demand, people still want to move to Sacramento keeping the market more fluid.

mortgage rates

Home sizes and home type trends in Sacramento

Smaller homes and condos are selling pretty quickly due to first time homebuyers and people looking to downsize.

Larger homes do have a steady demand but do take longer to sell simply due to the higher price point.

California Housing Landscape

There has been a dynamic change in the California Housing Landscape since January.  Interest Rates have played a major factor in the Sacramento Housing Market.

The increase in the interest rates has resulted in hestitation from homeowners to put their homes on the market.  Eg if you purchased your home for $400,000 at a rate of 2.5% and now looking at upgrading to a home with an extra bedroom for the kids, you are not only looking at price increase of around a 100K but at a new interest rate of around 7.5%, that is making the purchase of new home simply inaffordable.

Unfortuately there is no room for negotiation between the buyer and the seller in a situation where the interest rate is the culprit.  How do you afford to pay twice the amount for a house that is marginally bigger or better?

house prices

Median House Prices in Sacramento

The main cause of the decline in the median house prices is due to the following reasons:

  •  Increase in the interest rates
  • The seasonality of the market disappeared during COVID.  However it is now back, and when you celebrating the holidays and spending money on gifts under the tree moving, you are hard pressed to move house.

Single Family Homes

Single family homes are currently showing a downward trend in the Sacramento market.

Which suburbs experienced the most home sales in Sacramento over the last couple of months

Midtown and East Sacramento are always desirable.  However areas in the outer suburbs have slower sales which proves peole want to be closer to the city.

The suburbs that experienced the most home sales, are those with the lower average price point.  Areas like North Highlands and Del Paso Heights is affordable by a normal working class family. 

Up and coming suburbs like Plymouth Lakes which is surrounded by newer houses.  However the main reason buyers could start flocking to the area is regardless of the 30 min commute from mid Sacramento to the outskirts which is approximately 30 mins away, the housing is much more affordable and reasonbley priced.

This makes it a great choice for first home buyers especially those who have the option to work remotely.

housing in california

Are there enough homes in Sacramento to meet buyer demand?

There is approximately only 6 weeks worth of inventory when compared to buyer demand.  There simply aren't enough affordable homes.  California has experienced a housing shortage and building new homes over the years.  Sacramento's new construction market is stuck, thus making bidding on a home much more difficult which is pushing price up and out of range for many home buyers.

Are we likely to see an increase in new builds in 2024?

This depends on whether the govt is willing to give buyers incentives. Until things like high taxes and labour prices are rectified, new construction in Sacramento is very unlikely to flood the market.

Sacramento Housing Market challenges

  • Interest Rates
  • Lack of Inventory

Overall Sacramento has a solid infrastructure. It is not has expensive and traffic heavy  as Los Angeles and the Bay Area. The job marekt is  decent and so is the healthcare.  Bottom line it comes down to affordability and with the increase in the cost of living and inflation, if you are trying to save a 20% deposit for an average house at 500K, it is really really difficult to come up with a 100K as a down payment on a house.

Condo Living

The median house prices for condos has drastically increased over the last couple of years. Plus many condos have HOA fees which end up being almost the same as owning a larger home. Many investors look at getting cheap deals on them which pushes the prices up.  The average price of a condo is around 225K.  So althought it sounds good, with a 400-500 HOA you may still be stuck.

Condo living

Home Prices

Home prices are likely to move up in 2024.  They have continued to rise by approximately 7% each year due to the lack of inventory and home buyers willing to pay closer to the list price due to this shortage.

Many people are leaving California to  more affordable states like Idaho and Arizona.  

So What Does All This Means for You:

Well, Sacramento is still considered a seller's market. Sellers are enjoying a market with less competition listings and strong pricing. Home buyers might face more competitive conditions, but there are always great opportunities and plenty of deals available.

Sellers

  • Make sure to declutter your home and do any repairs prior to hitting the market.
  • Home staging and professional professional photography will increase curb appeal. 
  • Make sure your property is marketed correctly to bring in the biggest pool of buyers, both digitally and traditionally. 

Buyers

  • Work with an experienced agent who can understand your needs.
  • Make sure your agent exhausts every resource to find you homes, not just what's on the MLS.

As we navigate this dynamic market, Big Block Realty North is here with the expertise to guide you, whether you’re selling your home or searching for your dream property.

Remember, every market has opportunities, and our team is dedicated to helping you find them. Let's make 2024 a year of great real estate achievements!

I hope you found this information valuable. If there is anything we can do to support you personally in these changing times or if you have any further questions about real estate, please feel free to reach out to me. I would be happy to help you. We love being Sacramento’s real estate resource. 

Till next time!

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