By Mike Hazlip—
Uncertainty among both buyers and sellers continues, as the months-long drop in home prices shows possible signs of leveling out.
Local real estate broker Cara Richey said prices in the Citrus Heights area have seen a downward trend for several months, with the average sold price now hovering in the mid to upper $400,000 range. For Sacramento County, the median price has seen a drop from $520,000 in January 2022 to $499,000 in January of this year.
Richey told The Sentinel that homes are selling for 95% percent of the original list price, a factor that is putting pressure on sellers.
For sellers currently entering the market, Richey says they are now often motivated by life events such as a change in family structure or jobs. Those on the sidelines, however, remain hesitant waiting to see where the market will go from here, she said.
“I see more people just ‘waiting’ in uncertainty due to interest rates, the declining market, and overall concerns about the future of our economy and the impact it will have on the housing market,” Richey said.
Comparison data with prior years show around 40% less new listings in Sacramento County, indicating sellers are sitting out of the market, according to Sacramento appraiser and blogger Ryan Lundquist. The appraiser said January 2023 was the “worst January ever” for new listings in the county.
The number of sales in Sacramento County have also plummeted compared to a year ago, with just 552 sales in January 2023 compared with 1,014 in January last year, according to data from Lundquist.
“[I]t’s not a shocker to still see subdued sales volume,” wrote Lundquist. “The truth is we will get more buyers back as affordability improves.”
The California Association of Realtors reported in a Feb. 9 press release that just 17 percent of households statewide could afford a single-family home with a median price of $790,020. Affordability in the Sacramento region is higher, where 28 percent of households are able to afford the median priced home, Lundquist says.
Although year-over-year numbers show a modest 5 percent dip from 2022, Lundquist says those stats don’t capture the full change in the market over the last nine months. The current median home price for the Sacramento region is about 15 percent lower than May of 2022.
Responding to questions of whether the market has seen a bottoming out, Lundquist says historical data from the last downturn shows the market could see two different low points. The first low could come in sales volume, with a second low in median price coming months or even years later.
“It took just over two years for volume to reach a bottom after the peak in 2005, but it took another fourteen months after the volume bottom for the price decline to slow way down in Sacramento County,” Lundquist wrote in his Feb. 14 blog.
Lundquist said in a Jan. 30 blog post that the region is currently seeing a seasonal spring pickup, with more pending listings, more multiple offers, and more new listings, but says “it seems premature to say the market is normal.”
“Everyone has ideas about the future, but let’s be cautious about interpreting spring seasonality as a bottom,” Lundquist writes. “Time will tell. Let’s keep watching by the week.”
