Sacramento Real Estate 2017 Report: Market Trends
Sacramento real estate is on the rise. Home prices are increasing steadily, and properties--especially those priced on the lower end of the market--often receive multiple offers when they hit the market. Rising prices aren’t necessarily bad news for buyers—the recovery means that buyers are now entering a more stable housing market that is still among the most affordable in California. Sacramento real estate market trends point toward a hot market and increased competition. In fact, Redfin predicted Sacramento to be among the hottest real estate markets in the entire United States in 2017, and is so far the city is living up to to that measure.
If you’re thinking of buying in Sacramento this year, here’s what you need to know about the state of the market right now.
Cheap Homes are Harder to Find
Home values in Sacramento County have risen nearly 10% over the past year to hit a median value of $330,300 in July, according to Zillow. Prices officially crossed their peak levels from 2006 back in 2016, and have now soared beyond that mark. But this time around, price growth is driven primarily by low supply—new housing starts in the area have been extremely slow over the past few years—and prices are increasing at a measured rate compared to the rapid growth of the housing bubble. Zillow predicts the prices will rise another 5% in the next 12 months.
There are fewer homes for sale now than there have been over the past few years, with active listings down 23% from the same time in 2016. Buyers at the lower end of the market are seeing the highest levels of competition, with starter homes drawing scores of buyers. However, there are still neighborhoods where first-time buyers can get a toehold in the market. Local real estate agency Lyon Real Estate recommends areas like the Natomas, College Greens, Elk Grove, and Rosemont.
Buyers Should Come Prepared
So what does all of this mean for buyers? It’s still very possible to buy a great--and affordable—home in Phoenix, but the market is much more competitive than it was a few years ago. That means that buyers can to see expect multiple offers on properties, and homes will sell much more quickly than they may have a few years ago. Within city limits, homes are receiving an average of 3 offers each, according to recent Redfin statistics, and are selling for 101% of list price on average. Buyers should be prepared to move quickly if they see something they love on the market in Sacramento right now.
In a competitive market, it’s important to get a pre-approval letter before putting in any offers on homes. Buyers who have a fully underwritten pre-approval letter are preferred by sellers because their financing has an initial stamp of approval.
Be Prepared to be Flexible
Buyers should also come into the hot Sacramento market with a willingness to be flexible on their home requirements. Some neighborhoods and suburbs are shooting up faster than others, while pockets of more affordable homes continue to exist in the metro area. And while you may have to compromise on some of your home wishlist items to stay within your price range, it’s still very possible to find a great house for a reasonable price in Sacramento.