There are some serious things happening in the Sacramento real estate market right now. Inventory has seen a huge drop, and with fewer homes listed for sale there’s been a resulting humongous spike in median list prices. For sellers this is great news as homes have risen by more than seventy percent, but it’s not so great for buyers, especially those who are new to home buying and don’t have a property to sell.
Inventory Drops Through the Floor
Sacramento is finding itself in a similar trend to many of the other large cities in the United States right now, though in Sacramento things are even worse. The city has seen a mammoth drop in inventory over the past year, and in fact the trend in this city has been continuing for the last 5 years. The number of homes listed for sale has plummeted during this period, and if we compare figures between today and May last year you can really see what a difference there is. Last year – although the inventory was lower than in previous years – there was still a relatively healthy 2,570 homes listed. Today that figure is 62 percent lower with less than a thousand homes listed for sale in a city with a population of nearly 478,000. Only 981 homes were listed, though at least this is an improvement over last month when that figure was 3 percent lower at 950.
Prices Through the Roof
Although median list prices in Sacramento had been leveling out across the last few years this stable trend has now been broken. With so fewer homes listed for sale demand for those homes that are listed becomes that much higher. Most buyers would be advised to stay put in a market that is heavily swayed towards sellers, but this isn’t always possible and moves can be forced due to changes in jobs or personal circumstances. But if you’re hoping to sit this out there’s no telling how long this particular trend will continue – will homes continue to rise at the rates they are, and how long will they take to go back down once inventory starts to recover?
The median list price is up a shocking 77 percent from this time last year when the median was $129,900. Now that figure is $229,900 which is a 4 percent rise from just last month when that figure was $222,000.
The median price per square foot, which could be considered a more accurate indicator of changing house prices, is showing the same kind of levels – it has risen 69 percent from last year’s figure of $89 per square foot to $150 per square foot now, and that also is a 3 percent increase from last month’s $146 per square foot.
How long Sacramento can sustain these kind of increases is unknown, but it’s becoming increasingly difficult for first time home buyers to get their foot on the ladder.
Mortgages Rates Not Helping
Of course if mortgage rates were staying at their recent low levels news would be a little bit more helpful for first time home buyers, but they’re not. From their low point at the end of 2012 mortgage rates have been steadily climbing in California, as they have been in the rest of the country. Today California’s mortgage rate remained stable at 3.77 percent which is exactly the same as the national average.
