Sacramento Real Estate Market Update – September 2023

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Hello everyone! Welcome back to our Next Real Estate Group. Today, we have your monthly Sacramento real estate market update for September 2023. I always get asked “How’s The Market?” Well, it’s Good, It’s Bad and it’s Weird. We’ve got some interesting stats and trends to discuss, so let’s jump right in!

First up, let’s talk about the average home price in Sacramento.

[Average Home Price]

Based on the data we’ve gathered, the average home price for this month is $618,000. That’s an increase of 1.5% compared to last month and an increase of 2% from this same period last year.

[Average Price Per Square Foot]

“The average price per square foot in Sacramento is $323, showing an increase of 1.3% compared to August and up about the same amount from this time last year.

[Number of Homes Sold]

“In September, a total of 2,458 homes were sold, a decrease of 14.1% from August and down 22% from this time last year. We’re seeing the normal seasonal slowdown right now, but it feels slower than in years past. Keep in mind that our seasonal slowdown has not happened for the past 5+ years. So a return to “normal” feels slower, but isn’t out of the ordinary.

[Months of Inventory]

Looking at the inventory in the market also gives us a glimpse into the strength or weakness in the market. We currently have 2 months of inventory. This is up from just 1.6 months last year and down from the 2.3 months last year. This is statistically a Seller’s market.  A Buyer’s market: more than 6 months of inventory, A Seller’s market: less than 3 months of inventory and a Neutral market: 3 – 6 months of inventory.

[New Home Market Stats]

So what’s going on in the new home market?

New Homes continue to pick up the inventory gap in Sacramento. In August there were 573 new home sales in the region. This is up 44% from the previous month and up 154% from the same period last year. The fact sales have been robust throughout the year so far demonstrates the ongoing need for more homes to be built to meet the need, as well as the fact that builders are offering incentives to buyers that existing homeowners cannot match.

According to my friend Mike Strech, the CEO of the North State Building Industry Association,

“One reason sales remain much higher than usual for this time of year is the sharp decline in the number of existing homes on the market and the fact that builders can often offer below-market financing and other incentives to increase affordability,” Strech said.

[Mortgage Rate Stats]

And of course, we can’t forget about one of the most important factors that influences the real estate market – the mortgage rates.

According to our friends at Cross Country Mortgage rates for a Conventional loan is around 7.635%, Jumbo is at 7.25% and FHA is at 6.875 which is an increase of about .5% compared to last month.”

[Opinion]

Now, with all of these stats and numbers in mind, what does this mean for you? Is it a good time to buy or should you hold off?

Prices are still rising and homes are still selling but it’s definitely a challenging market for both Seller’s and Buyer’s. Rates are on everyone’s mind right now. We don’t have a crystal ball, but given the current national economic trends it appears we are nearing the top for rates. Now, here’s where it gets tricky for Sacramento. We are under supplied for the current demand. The rising rates have tempered large price increases given the solid demand. What happens when rates start to moderate and come back down? That means more people can qualify or like so many of you, you decide to stop waiting and make a decision. Well, if there’s more demand than supply, what happens to prices? Yep, they go up. If you’re ready, willing and able to purchase a home, now may the right time to buy. You can  always refinance to change your rate, but you can’t change the price as easily.

If you have any questions or need personalized advice, feel free to reach out. We’re here to help you navigate this market effectively to make smart decisions. Please make sure to like this video, subscribe, and hit the notification bell so you never miss a market update. I’m Christopher Brown with NEXT Real Estate Group and Next New Homes Group. See you next month![/vc_column_text][/vc_column][/vc_row]