Tuesday, July 14, 2020
How's the Sacramento real estate market during the pandemic?
How's the Sacramento real estate market during the pandemic? I answer this question every day. In short: the market is crazy. Multiple offers abound, homes selling for more than listing price, prices increasing. I know: this is contrary to what you were probably thinking. But if you dig into the dynamics and data it makes a lot of sense.
Inventory is scarce. The graph above is a brilliant visual illustration of what is happening currently in the market. We have far fewer homes actively for sale than are currently pending sale (in contract with buyers) and that have closed escrow (sold). This is a HUGE change from last year, and candidly, all of my last 15 years as a realtor. I think as the pandemic has unfolded there are many people who had planned to sell their homes who have hunkered down, deciding not to sell yet. I personally have several would-be seller clients who were ready to list their homes before COVID19 hit who are staying put for now. I am still listing plenty of properties -- folks still need to move, whether relocating out of state, or moving to different school districts, or moving closer to work, or upsizing to have a home office, or downsizing after the kids move out, or selling an empty home in an estate, etc. But many are holding off to see what happens.
With that though, literally none of my buyer clients have suspended their home searches. And thus we have an imbalance of supply and demand. And prices are increasing.
From the conversations I am having with my buyer clients, for those unaffected by job loss or furlough, MANY people are motivated to purchase homes right now. Some have told me that because we now must spend so much time at home, it has caused them to re-evaluate what is important in their home. Renters are very much wanting to buy. And I am working with several bay area buyers -- which itself is not new -- but several who have been told by their employers that they will now be permanently working from home so they are choosing to buy in Sacramento where they can afford a nicer home. The median home price in Sacramento County, which in June 2020 was $415,000, is SUBSTANTIALLY LESS than bay area counties where the median home price can be well over $1,000,000. Let's not forget that interest rates are also insanely low: One of my clients just locked a 30-year fixed conventional loan under 3%.
So as my good friend Ryan Lundquist always says: the market is always moving.