Thursday, August 10, 2017

July 2017 Sacramento County Real Estate Statistics...

This summer has pretty much flown by and candidly, I can't believe that the kids are going back to school this week, and that the 90 degree days are a welcome relief from the scorching hot temperatures we had in July. Pleasantries aside, the Sacramento real estate market, just like the weather, seasonally changes a bit this time of year and 2017 seems to be no exception.

Inventory has increased! Thank goodness, because the market sorely needs it. Though by increased, I mean it went from about 1 month of inventory for sale, to 1.4 months of inventory for sale. 1.4 months of inventory is still super low. It is still a seller's market for homes priced correctly...multiple offers abound. A balanced market where neither buyer nor seller have an advantage is between 4-6 months of inventory for sale.

A seasonal increase in inventory is typical. If you compare this to the market dynamics from July 2016, you will see it looks remarkably similar.  I expect things will be much the same this year.

The July 2017 Sacramento County single family median home price climbed to $355,000...if typical trends for this time of year hold true, the median price should bump along for the rest of the year and not change too dramatically.

The market is still far from our peak median home price, which per Trendgraphix was $395,000 from August 2005. Adjusted for inflation to today's dollars, that median value would have to reach $492,653 (using the US Department of Labor Consumer Price Index Inflation Calculator) to be equivalent to our previous peak.

I see A LOT of demand for purchasing Sacramento homes. My buyer clients face lots of competition from other buyers, and my sellers enjoy the multiple offers. For one, Sacramento rent prices have increased quite a bit, and with that many renters who can afford to buy are looking to purchase to stabilize their monthly housing expense. Additionally, there are many people looking at Sacramento as a less expensive alternative to the bay area where median home prices are more than double and triple those in Sacramento (my most recent closed sale just last week was for a family relocating to Sacramento from Oakland). And then there is the fact that during the decline, fewer homes were built in the greater Sacramento area - so we did not increase the amount of housing stock to keep up with people creating households in the area. We are seeing some new development in Sacramento though not nearly enough.

So with that, the low supply coupled with the high demand and strong underlying economic conditions should keep the Sacramento real estate market on its current trajectory for a while...

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