As of October 2025, the Sacramento housing market report shows we're still operating in what's generally considered a seller's market, though some signals suggest a slight shift in favor of buyers. This means conditions still favor those looking to sell, but a closer look at the numbers reveals nuances that savvy buyers can leverage. Let's break down what they really mean for you.
Sacramento Housing Market Update: What You Need to Know as a Buyer or Seller
Home Sales: A Slowdown in Transactions
Let's start with home sales. According to the Sacramento Association of REALTORS®, in October 2025, we saw 950 homes sold. This is a decrease of 9.6% compared to the same month last year, when 1,051 homes changed hands. Month over month, sales also dipped by 7%, going from 1,021 in September to 950 in October. While this might sound concerning, it's not entirely unexpected as we move into the later part of the year. Fewer sales often mean fewer listings are needed to meet demand.
However, on a more positive note for sellers, the number of homes that went under contract, or pended, actually saw a slight increase. There were 1,033 pended sales in October, up 1.2% from the previous month and a healthy 5.3% higher than the same period last year. This indicates that while closings might be a bit slower, there's still a good amount of buyer interest waiting to move forward.
Home Prices: Mixed Signals and Median Strength
When it comes to home prices, the picture is a bit more complex. The Average Sold Price per Square Foot is often a more reliable indicator of true value trends because it smooths out the impact of high-end or starter homes skewing the overall average. In October 2025, this metric was down 2.4% from the previous month ($327 per square foot) and down 4.1% compared to last year ($341 per square foot). This tells me that while buyers might not be overpaying on a per-square-foot basis, the market isn't seeing rapid price appreciation in that measure.
On the other hand, the Median Sold Price showed a slight increase, going up 1.9% from the previous month to $550,000. This is a key figure because it represents the middle point of all sales – half sold for more, half sold for less. The fact that it nudged upwards, even slightly, is a good sign for sellers. However, the Average Sold Price actually decreased by 2% from last month to $598,000.
Looking at the 6-month trend, the Average Sold Price is considered “Depreciating,” while the Median Sold Price is “Neutral.” This divergence suggests that while the overall market isn't seeing a consistent increase in average sale prices, the typical home is holding its value quite well. It’s a subtle but important distinction.
Housing Supply: More Options for Buyers
This section might be the most significant for potential buyers. The total number of homes for sale saw a notable increase. In October 2025, there were 2,260 homes on the market, which is a 20.9% jump compared to October of last year. This means buyers who waited have more choices available. While inventory did decrease slightly by 2.5% from the previous month (September), the year-over-year increase is a clear sign that more homes are becoming available.
The Months of Inventory is a critical metric for understanding market balance. It tells us how long it would take to sell all the homes currently on the market if no new ones were added.
- Based on Closed Sales, the Months of Inventory was 2.4 months. This is up 33.7% from last year.
- Based on Pended Sales, it was 2.2 months.
For context, a seller's market is typically defined as having less than 3 months of inventory. A buyer's market has more than 6 months, and a neutral market falls between 3 and 6 months. With 2.4 months of inventory, we are still firmly within a seller's market, but this increase from last year (where it was around 1.8 months) means the scales are tipping, albeit slowly, moving us more towards the neutral zone.
Average Days on Market: Homes Taking Longer to Sell
Another strong indicator pointing towards a slight shift is the Average Days on Market (DOM). In October 2025, the average property took 40 days to sell. This is up 8.1% from last month and a significant 33.3% increase compared to last year, when homes were selling in just 30 days on average.
An upward trend in DOM suggests that buyers have a little more time to consider their options and negotiate. This is a welcome change for many buyers who felt rushed in previous months. While 40 days is still relatively quick, the trend is what we're watching, and it's clearly moving upwards. This also impacts the Sold Price vs. Original List Price ratio. Sellers are still on average getting 97% of their original list price, but this is down 1% from last year, indicating that some price adjustments are being made to secure sales.
Buyer's Market or Seller's Market? The Verdict for Sacramento
So, based on the latest data from the Sacramento Association of REALTORS®, is it a buyer's or seller's market? My take is that October 2025 still leans towards a seller's market. The months of inventory remain below the 3-month threshold. However, buyers are seeing tangible benefits:
- More Choices: Increased inventory means less competition for individual homes.
- More Time: Homes are staying on the market longer, allowing for more thoughtful decision-making and negotiation.
- Price Stability: While not rapidly appreciating, prices are holding steady, and the average price per square foot has seen some softening, offering potential value.
For sellers, it’s still a market where you can likely get a good price, but you might need to be a bit more patient, and potentially more flexible on price or terms than you might have been a year ago. The days of bidding wars on every listing might be fading, replaced by more considered offers.
Sacramento Housing Market Forecast 2025-2026
Now that we’ve looked at the current trends, let’s peer into the crystal ball and see what the Sacramento housing market forecast looks like for the rest of 2025 and into 2026.
Sacramento's Near-Term Outlook (Late 2025)
According to Zillow's forecast, the average home value in the Sacramento–Roseville–Arden-Arcade area is currently around $574,751. This is down 2.2% over the past year. Homes are also pending in about 27 days, which is faster than the current trend of 38 days on market, suggesting a potential pickup in activity.
Zillow’s specific forecast for our region is as follows:
Table 2: Zillow's Sacramento Housing Market Forecast
| Timeframe | Expected Home Value Change |
|---|---|
| October 2025 | -0.1% |
| December 2025 | -0.4% |
| September 2026 (1-Year Forecast) | -0.6% |
What does this mean for Sacramento? It suggests that we might see a slight continued dip or flattening of home values through the end of 2025 and into early 2026. It’s not a dramatic crash, but rather a period of adjustment. This could be influenced by ongoing mortgage rates and the general economic climate.
Sacramento Compared to Other California Cities
It's always interesting to see how Sacramento stacks up against other major California cities. Zillow's forecast shows a bit of a mixed bag across the state:
Table 3: Zillow's California MSA Home Value Forecast Comparison
| RegionName | October 2025 | December 2025 | September 2026 (1-Year Forecast) |
|---|---|---|---|
| Sacramento, CA | -0.1% | -0.4% | -0.6% |
| Los Angeles, CA | 0.1% | 0.3% | 1.4% |
| San Francisco, CA | -0.1% | -0.6% | -2% |
| Riverside, CA | 0% | 0% | 1.8% |
| San Diego, CA | -0.1% | -0.5% | 1.6% |
| San Jose, CA | 0.3% | 0.6% | 1.4% |
| Fresno, CA | 0.2% | 0.5% | 1.8% |
| Bakersfield, CA | 0.1% | 0.4% | 2.5% |
As you can see, while Sacramento is projected to see a slight decrease in home values, many other parts of California, particularly Southern California and the Central Valley (like Fresno and Bakersfield), are expected to see modest growth. San Francisco, on the other hand, is forecasted to experience a more significant decline. This comparison suggests that Sacramento's market might be more stable than some of the priciest areas, but not as robust as certain growth markets.
National Housing Market Outlook (2025-2026)
Looking at the broader US market gives us more context. Both Zillow and the National Association of Realtors (NAR) have provided forecasts, and they generally paint a picture of recovery and gradual growth after a challenging period.
Zillow's Key Predictions for the US:
- Home Value Growth: After a flat period in late 2025, Zillow expects home value growth to recover in 2026, reaching a peak of nearly 1.9% by August 2026.
- Home Sales: The total number of home sales is predicted to end 2025 at 4.07 million, which is slightly better than 2024.
- Rents: Rental growth is expected to continue to cool down.
NAR Chief Economist Lawrence Yun's Key Predictions for the US:
NAR's Chief Economist, Lawrence Yun, is notably optimistic, suggesting “brighter days may be on the horizon.”
- Existing Home Sales: Expected to rise by 6% in 2025 and then accelerate by 11% in 2026. This signals a strong rebound in buyer activity.
- New Home Sales: Projected to climb by 10% in 2025 and another 5% in 2026. This growth is crucial for addressing the housing supply deficit.
- Median Home Prices: Forecasted to increase modestly, with a 3% rise in 2025 and 4% in 2026. This is a return to more sustainable price growth.
- Mortgage Rates: Anticipated to average 6.4% in the second half of 2025 and drop to 6.1% in 2026. Yun calls mortgage rates a “magic bullet” for the market, and a decrease in rates will significantly boost affordability and demand.
What This Means for Sacramento:
While Sacramento's short-term forecast might be a bit flatter than the national average, the national trends suggest that by late 2025 and into 2026, we should see a positive ripple effect. The expected decrease in mortgage rates nationally is a huge factor. As rates come down, more buyers will be able to afford homes, and this increased demand should help lift Sacramento’s market, too. The national increase in home sales also points towards a healthier overall real estate environment.
So, Will Home Prices Drop in Sacramento? Can it Crash?
Based on the current data and forecasts, a crash in Sacramento home prices is unlikely. The market is shifting from a red-hot seller’s market to a more balanced one, and home prices are expected to either stabilize or see very modest decreases in the short term.
Here’s my take:
- Short-term (Late 2025): We might see some continued downward pressure on prices, especially for homes that are overpriced or need work. However, the underlying demand in Sacramento, combined with a continued seller's market (low inventory), should prevent any drastic price drops. The Sold Price vs. Original List Price ratio of 97% suggests sellers are already adjusting.
- Mid-term (2026): As national trends show an uptick in home sales and a slight increase in home values, Sacramento is likely to follow suit. The projected drop in mortgage rates is a major catalyst. This could lead to a more active market with modest price appreciation, rather than a decline.
- Long-term (Early 2027): If the national trends of increasing sales and stable price growth continue, Sacramento should benefit. We might see a return to steady, sustainable home price appreciation in the low single digits, driven by ongoing demand and improving affordability due to potentially lower mortgage rates.
A “crash” usually implies a rapid and significant drop in prices, often due to major economic shocks or an oversupply of homes. While the market is correcting from its recent rapid run-up, the current data doesn't point to the conditions that typically cause a crash.
Possible Forecast for 2026 End and Early 2027
Looking ahead to the end of 2026 and early 2027, I anticipate the Sacramento housing market will be in a much healthier and more balanced state than it is right now.
- Home Sales: Expect more activity. With potentially lower mortgage rates and a more stable economic outlook, more buyers will likely enter the market. We could see a steady increase in both existing and new home sales, closer to or even exceeding national averages.
- Home Prices: We should see a return to modest, sustainable appreciation. Think along the lines of the 3-4% annual increases predicted nationally by NAR. This is a healthy level that allows homeowners to build equity without creating an unsustainable market. The Days on Market should start to decrease again as demand picks up.
- Housing Inventory: The housing inventory might increase slightly as more sellers feel confident listing their homes in a more stable market. However, it's unlikely to shift dramatically into a buyer's market, especially if demand continues to be strong.
- Buyer vs. Seller Market: The market will likely transition from the current Seller's market to a more balanced market by the end of 2026. This means that while sellers might still have some advantages, buyers will have more negotiating power and a better selection of homes.
In summary, the Sacramento housing market is navigating a period of transition. While September 2025 data showed a Seller's market with some signs of cooling, the forecasts for the coming year point towards stabilization and eventual modest growth. Keeping an eye on mortgage rates and economic news will be key to understanding how these trends play out.
Is Sacramento a Good Place to Buy a House?
The decision to buy a home is deeply personal and depends on individual financial situations, lifestyle preferences, and long-term goals. However, here are some factors that make Sacramento an appealing place to call home:
- Relatively Affordable: While not as affordable as it once was, Sacramento still offers a more attainable cost of living compared to the Bay Area and Southern California, especially in terms of housing.
- Strong Job Market: Sacramento boasts a diverse economy with job opportunities in government, healthcare, education, and technology. The presence of major employers like UC Davis and state government agencies provides stability.
- Quality of Life: Known for its sunny weather, access to outdoor recreation, and vibrant cultural scene, Sacramento offers a high quality of life that continues to attract new residents.
- Central Location: Situated within driving distance of the Bay Area, Lake Tahoe, and the Napa Valley, Sacramento provides convenient access to some of California's most desirable destinations.
Renting vs. Buying in Sacramento: Weighing Your Options
The age-old debate of renting versus buying is particularly relevant in a market like Sacramento, where affordability is a key consideration.
Renting:
- Flexibility: Renting provides flexibility, allowing you to move more easily without the commitment of homeownership.
- Lower Upfront Costs: Renting typically requires a lower upfront investment compared to buying, as you don't need a down payment or closing costs.
- No Maintenance Responsibilities: As a renter, you are generally not responsible for property maintenance or repairs.
Buying:
- Building Equity: Mortgage payments gradually build equity in your home, providing a potential return on investment over time.
- Tax Advantages: Homeownership offers potential tax deductions for mortgage interest and property taxes.
- Stability and Control: Owning a home provides stability, a sense of community, and the freedom to customize your living space.
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