Nestled in the Central Valley region of California, Sacramento County boasts a thriving and dynamic housing market. As one of the most populous counties in the state, it offers a diverse range of opportunities for homebuyers and investors alike. Considering the data, the current market conditions in Sacramento lean toward a buyer's market. The decline in median sold prices and the notable decrease in sales volume suggest that buyers may find favorable conditions to negotiate and secure their ideal homes.
How is the Sacramento housing market doing currently?
Sacramento County is a vibrant and bustling area that serves as the heart of the Central Valley region. With its rich history, vibrant culture, and strong economy, it has attracted an influx of residents seeking a high quality of life and excellent opportunities. The county's strategic location, excellent transportation links, and numerous amenities have contributed to its popularity among both local and out-of-state homebuyers.
In January 2024, existing, single-family home sales in California demonstrated a robust performance, totaling 256,160 on a seasonally adjusted annualized rate. This marked a significant increase of 14.4 percent from the previous month, where sales were at 224,000. Compared to January 2023, the sales figures showed a notable uptick of 5.9 percent from 241,920 homes.
The statewide median home price for January 2024 stood at $788,940. While this represented a slight decrease of 3.8 percent from December, it showcased a positive growth of 5.0 percent from January 2023 when the median price was $751,700.
Sacramento County Housing Market Performance
Zooming in on the Sacramento County housing market, let's delve into the specific data for January 2024:
- Median Sold Price: The median sold price for existing single-family homes in Sacramento was $515,000. Comparatively, this reflected a decline from $535,000 in December 2023, translating to a month-to-month decrease of 3.7%. However, on a year-over-year basis, the median price experienced a positive change of 3.2% from January 2023's figure of $499,000.
- Sales Volume: In terms of sales volume, January 2024 witnessed a significant month-to-month decrease of 10.8%, with the number of sales dropping from $535,000 in December 2023 to $515,000. However, on a year-over-year basis, the market displayed resilience with a 5.5% increase from January 2023.
Central Valley Housing Market Insights for January 2024
Expanding our analysis to the Central Valley, let's explore the key data points for the region's housing market in January 2024:
- Median Sold Price: In January 2024, the median sold price for existing single-family homes in the Central Valley was $460,000. This reflected a marginal month-to-month decrease of 0.4% from December 2023 when the median price stood at $462,000. However, on a year-over-year basis, the region experienced a noteworthy increase of 6.8% from January 2023's figure of $430,750.
- Sales Volume: The sales volume for January 2024 in the Central Valley demonstrated a month-to-month decrease of 9.2%, with the number of sales dropping from an observed $462,000 in December 2023. Despite this decline, the market exhibited resilience on a year-over-year basis, showing a substantial increase of 12.5% from January 2023.
Comparative Analysis: Sacramento vs. Central Valley
Now, let's draw a comparison between the housing markets of Sacramento and the Central Valley to discern distinctive trends and patterns:
- Median Sold Price: While both regions experienced a slight month-to-month decline in median sold prices, Sacramento's decrease was more pronounced at 3.7% compared to Central Valley's marginal 0.4%. On a year-over-year basis, both regions exhibited positive growth, with Sacramento at 3.2% and Central Valley leading at 6.8%.
- Sales Volume: Sacramento and Central Valley both faced a month-to-month decrease in sales volume, with Sacramento experiencing a 10.8% decline and Central Valley at 9.2%. However, on a year-over-year basis, Central Valley showcased higher resilience with a 12.5% increase compared to Sacramento's 5.5%.
Sacramento Single-Family Housing Market Data
Let's take a closer look at the key statistics provided by the Sacramento Association of REALTORS®.
Sales Volume Trends:
Despite a promising start in January 2023, the Sacramento housing market experienced a 13% decrease in sales volume, closing with 610 sales. However, compared to the same period last year, there was a 6.6% increase in sales, showcasing the market's resilience. Notably, conventional financing dominated with a 62.5% share, while cash and FHA constituted 13.3% and 17.2%, respectively.
Sales Price Dynamics:
The median sales price exhibited a 3.7% dip from $535,000 to $515,000, reflecting a nuanced market scenario. Interestingly, this still marked a 3.2% increase from January 2023, emphasizing the overall upward trend. The median sales price, a pivotal metric, delineates the equilibrium point, with half of the monthly sales surpassing and half falling below this figure.
Listing Inventory and Months of Inventory:
January saw a modest 2.7% rise in listing inventory, reaching 1,113 units from 1,084 in December. However, compared to January 2023, there was a 14.4% decline, with inventory standing at 1,300 units. The Months of Inventory, a critical indicator, increased from 1.5 to 1.8 months. This metric signifies the duration it would take to exhaust the current listing inventory based on the prevailing sales rate.
Days on Market:
The median Days on Market (DOM) increased marginally from 19 to 21, a significant improvement from 29 in January 2023. Out of the 701 sales in January, 61% were on the market for 30 days or less, while a substantial 81.7% had a market presence of 60 days or less, indicating a faster pace in property turnover.
Sacramento Housing Market Forecast for 2024 and 2025
Sacramento–Roseville–Arden-Arcade, a vibrant region in California, has witnessed noteworthy trends in its housing market. This article delves into various housing metrics, providing a detailed overview and forecast for prospective homebuyers and sellers. The data utilized in this analysis is sourced from Zillow, a reputable real estate platform.
As of January 31, 2024, the average home value in the Sacramento area stands at $559,243, reflecting a 0.8% increase over the past year. Homes in this region typically go pending in around 19 days. The 1-year Market Forecast suggests a positive growth rate of +3.2% (Data through January 31, 2024).
Housing Metrics Demystified
- For Sale Inventory: As of January 31, 2024, there are 3,719 properties available for sale in the Sacramento area.
- New Listings: The region has seen 1,162 new listings as of January 31, 2024, indicating dynamic activity in the housing market.
- Median Sale to List Ratio (December 31, 2023): The ratio stands at 0.999, suggesting a balanced relationship between listed and sold prices.
- Median Sale Price (December 31, 2023): The median sale price for homes in the Sacramento area was $542,083 as of December 31, 2023.
- Median List Price (January 31, 2024): The current median list price is $598,333, indicating the average asking price for homes on the market.
- Percent of Sales Over List Price (December 31, 2023): A significant 37.5% of sales were closed above the list price by the end of December 31, 2023.
- Percent of Sales Under List Price (December 31, 2023): Conversely, 46.6% of sales were concluded below the list price as of December 31, 2023.
The term MSA stands for Metropolitan Statistical Area. In the context of Sacramento, it encompasses the broader urban region, including Roseville and Arden-Arcade. The housing market's scope extends across various counties, creating a diverse real estate landscape.
The Sacramento housing market, with its substantial 3,719 properties for sale and $559,243 average home value, demonstrates its significance. The continuous influx of new listings and the positive 1-year Market Forecast of +3.2% underline the resilience and potential for growth in this dynamic real estate market.
Are Home Prices Dropping in Sacramento?
The current data does not indicate a significant drop in home prices. The average home value in the Sacramento area has experienced a modest increase of 0.8% over the past year. However, it's essential to monitor market trends regularly to assess any potential shifts in pricing dynamics.
Will the Sacramento Housing Market Crash?
Based on the available data and the positive growth forecast, there is no immediate indication of a housing market crash in Sacramento. Real estate markets are influenced by various factors, and while the current trends suggest stability, it's crucial to stay informed and be aware of external influences that may impact the market.
Is Now a Good Time to Buy a House in Sacramento?
Considering the current housing metrics and the forecasted growth, now could be a favorable time for prospective buyers in the Sacramento area. The relatively short 19 days on average for homes to go pending and the positive market forecast may provide opportunities for those looking to make a purchase. However, individual circumstances and preferences should also be taken into account.
It's recommended for potential homebuyers and sellers to consult with real estate professionals, stay updated on market trends, and assess personal financial situations before making any significant decisions in the real estate market.
Is Buying a House in Sacramento a Good Investment?
When considering whether buying a house in Sacramento is a good investment, it's crucial to examine various factors that contribute to the real estate market's attractiveness. Let's delve into the key aspects to help you make an informed decision.
Sacramento Rental Property Market
One of the key indicators of a strong real estate market is the demand for rental properties. In Sacramento, the rental property market has been robust, with a growing number of individuals and families looking for quality housing. This demand is driven by various factors, including the city's growing job market and its appeal as a place to live.
Investing in a rental property in Sacramento can provide a steady income stream, especially if you choose the right location and property type. It's essential to research neighborhoods and assess rental rates to ensure your investment is profitable.
Sacramento's Cost of Living & Quality of Life
Sacramento boasts a relatively lower cost of living compared to many other major California cities. This makes it an attractive destination for individuals and families looking for affordable housing options and a good quality of life.
The city offers a diverse range of amenities, including parks, cultural attractions, and a vibrant culinary scene. Sacramento's pleasant climate and proximity to outdoor recreational activities also contribute to its high quality of life.
These factors not only make it an attractive place to live but can also drive property value appreciation over time, enhancing the potential for a return on your investment.
Sacramento's Diverse Job Market & Economic Growth
Sacramento's job market has shown considerable growth in recent years. The city is home to a diverse range of industries, including healthcare, government, technology, and education. The presence of government agencies, such as the California State Government, further stabilizes the job market.
A strong and diverse job market can positively impact the demand for housing. Job opportunities attract professionals and families to the area, driving both rental and home purchase markets.
Population Growth of the Sacramento Metro Area
Population growth is a significant factor in the real estate market's health. The Sacramento metropolitan area has been experiencing steady population growth, driven by its economic opportunities and quality of life. An increasing population can lead to higher demand for housing, potentially driving property values upward.
Real Estate Appreciation Trends
One of the primary reasons why buying a house in Sacramento may be a good investment is the city's history of real estate appreciation. Over the past decade, Sacramento has experienced consistent and significant property value appreciation. This trend can be attributed to several factors, including an increase in demand for housing, a limited housing supply, and Sacramento's growing appeal as a desirable place to live.
Investors and homeowners who purchased properties in Sacramento a few years ago have witnessed substantial gains in their property values. While past performance does not guarantee future results, this trend is a positive indicator for potential real estate investors.
Investment Property Tax Benefits
Investing in real estate in Sacramento can offer tax benefits that make it an even more attractive investment. These benefits can include deductions for mortgage interest, property taxes, and depreciation. Be sure to consult with a tax advisor to understand how these deductions can positively impact your overall financial picture.
Resilience in Economic Downturns
During economic downturns, real estate in Sacramento has demonstrated resilience. While property values may experience fluctuations, the city's diversified economy and government stability have often shielded it from severe declines seen in other areas. This stability can provide a sense of security for investors concerned about economic uncertainties.
Other Factors
Other factors that contribute to the attractiveness of Sacramento's real estate market include:
- Transportation Infrastructure: Sacramento benefits from a well-developed transportation infrastructure, including highways and an international airport, making it accessible to residents and businesses.
- Education: The city is home to reputable educational institutions, including universities and colleges, making it an appealing location for students and academics.
- Cultural and Recreational Opportunities: Sacramento offers a rich cultural scene, with museums, theaters, and historic landmarks, providing diverse recreational opportunities for residents.
Consulting Real Estate Professionals
To make a well-informed decision, it's highly recommended to consult with real estate professionals who are knowledgeable about the Sacramento market. Real estate agents, appraisers, and property managers can provide insights into current market conditions, trends, and specific investment opportunities.
References:
- https://www.car.org/
- https://www.sacrealtor.org/consumers/housing-statistics
- https://www.zillow.com/sacramento-ca/home-values
- https://www.realtor.com/realestateandhomes-search/Sacramento_CA/overview