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The local housing market is hot again, but it’s not what you think

By Mike Hazlip—
The Sacramento region’s housing market has gotten competitive again, but a local real estate expert says it’s far from normal.

Whereas a normal spring season would see many more buyers and many more sellers,  Sacramento real estate appraiser and blogger Ryan Lundquist says low demand meeting low supply during a typical seasonal uptick in the market is what’s behind the increasing competition this year.

“The issue today is we’ve had lower demand since buyers have stepped back from the market due to affordability,” Lundquist said in an April 5 post on his blog, Sacramento Appraisal Blog. “But now sellers have also stepped back, and it’s caused low demand and low supply to meet.”

“If we had a normal number of listings right now, the market would feel way different,” Lundquist said. “It’s frankly striking to see competition like this in the midst of a market with so many missing buyers.”

Lundquist says volume has been worse than 2007 in the Sacramento region. Currently, he says there are more pending sales than active listings and there is less than one month of housing supply in Sacramento County. Historically, the National Association of Realtor’s says a six month’s supply is typically associated with moderate price appreciation, whereas lower levels of supply “tend to push prices up more rapidly.”

A Sentinel review of current real estate listings in Citrus Heights shows around 30 single-family home listings, ranging from $389,000 for a three-bedroom home on a quarter-acre lot, to $797,000 for a 3,200-square-foot home on nearly three-quarters of an acre on Highland Avenue.

What does all this mean for the trend of home prices in 2023? As always, Lundquist says he doesn’t have a crystal ball and focuses on the data he can see.

“All that said, one thing I’m hoping to communicate here is the importance of recognizing that intense competition doesn’t automatically mean early 2022 rapid appreciation,” the appraiser said. “We are in such a weird market right now with subdued supply and subdued demand, and we’re going to have to wait to see what happens with prices.”

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