Sacramento Real Estate Summary
Sacramento Real Estate Year Over Year
Overall, the last year in the Sacramento has had a good real estate wise. While sales have declined slightly year over year, the average sales price has gone up and that means fewer and fewer underwater homeowners.
Correspondingly, there has been an increase lately in home equity loans which points to home improvement which is a good thing from an local economy perspective as well.
When homeowners spend money on their homes, it puts people back to work. Contractors, handymen & women, home improvement stores all benefit from an uptick in homeowners taking out loans to improve their homes.
While the information below is rather general, it does point to healthy real estate markets in Sacramento County.
Average Sales Price Increases in Sacramento County
From April of 2013 to April of 2014, homes have appreciated almost 20%. Depending on the area of Sacramento County you live in, this could be higher or lower. Notice that this has been a gradual, steady appreciative cycle over the last year. A very good sign.
Another item of note: The listing to sold prices have gotten narrower since the fall. This is also a good sign as sellers are getting realistic about home values and this keeps the market moving.
Obviously, for this trend to continue, we’ll need incomes to increase and the local unemployment rate to continue to decline. We could be approaching a point where the difference between incomes and housing prices gets too far apart. This occurred in 2004/2005 and slowed the market down significantly to the crash of 2006/2007.
If mortgage credit stays as tight as it has for the last couple of years, the market will adjust as a reflection of activity rather than a reaction to “too easy to get” mortgages.
The average sales prices in virtually every city in Sacramento County has seen increases of 7% to 40% over the last year.
Sacramento County Real Estate Sales Decline
I’ve been reading that real estate sales have declined nationwide in April and such was the case in Sacramento County. Sales declined just over 11% year over year but with pending sales being much higher than they were a year ago, it just looks like the market got a late start on the buying season and we’ll see higher than last year sales for May and June.
While sales in Sacramento county have declined overall some cities within Sacramento County have increased year over year. The table below are some of the cities/areas in Sacramento County where sales have increased over the last year:
|
City / Area |
% Sales Increase |
|
Midtown Sacramento |
111% |
|
Mather |
50% |
|
North Highlands |
36% |
|
Rosemont |
32% |
|
South East Sac / Tahoe Park |
31% |
|
Rio Linda |
22% |
|
|
19% |
|
Foothill Farms / North Highlands |
18% |
Sacramento Real Estate Summary
Sales being down overall points to affordability and the absence of first time home buyers in the market right now. Many of those who have graduated from college over the last 10 years have been affected by the economy and unable to get jobs that would afford them the opportunity to buy a home. School loans and other debt are holding them back from moving out of mom & dad’s home much less buying a home of their own.
This will change over time of course. The good news is that while there might not be the demand for homes, the inventory of homes for sale isn’t going up as one would expect from “slumping” sales over the region. While, yes, home values have come up significantly over the last 2 years, there are still many home owners out there who would like to sell and move but still can’t afford to due to being underwater on their mortgages or just underwater enough to not be able pay the costs of selling.
We have a lot to be grateful for in our market now. We’re in the top markets nationwide for good reasons rather than being known is the sister city of the foreclosure capitol of the U.S. I thought that would never end but I’m glad that, essentially, the housing downturn is over and we’re posting value gains again. Now all we need is another year or so to get the economy on more stable footing and we should be in great shape.
Have questions? Please don’t hesitate to post in the comments section or just shoot me an email.
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