Sacramento’s median home price pierced $300,000 last month for the first time in nearly nine years.
A shortage of homes on the market continues to drive prices higher, although they remain well below their pre-recession peak of August 2005, when the median price for an existing home in Sacramento County was $374,000, said Andrew LePage, an analyst with real estate tracker CoreLogic.
The Irvine company said the May median price of $305,000 for a resale home in Sacramento County was up nearly 10 percent from $278,091 in May 2015.
LePage said the inventory of houses for sale appears “relatively tight in a lot of neighborhoods” while sales are strong. Buyers are willing to match or exceed asking prices.
Earlier this month, Coldwell Banker Residential Brokerage in Sacramento stated that “a shortage of homes in the greater Sacramento area” was pushing home prices higher. The brokerage firm calculated a median price of $345,000 for all homes sold in May in Sacramento, El Dorado and Placer counties. That was up about 7.5 percent from a median of $321,000 in May 2015. Sacramento was the most affordable of the three counties.
Coldwell said active inventory in the tri-county region last month totaled 4,474 listings, down 27 percent from a year ago. The biggest drop was in Sacramento County, which had a 33 percent decline in homes for sale last month.
“Lack of inventory to meet the strong demand from buyers continues to be the story of the local housing market,” said Terri Briggs, regional vice president for the Sacramento-Tahoe region of Coldwell Banker. “We’ve been hoping for more listings to come on the market, but inventory actually went down slightly from April to May, and it’s running well below where it was a year ago.”
The story was the same in the Bay Area, where the tight market has produced eye-popping prices.
LePage said the median price for a home in the Bay Area hit an all-time high for a second consecutive month, with May’s $700,000 surpassing $690,000 reported in April. Prior to that, the all-time high was $665,000 in July 2007.
“The tight supply of homes on the (Bay Area) market continues to constrain sales, while low mortgage rates and job growth help fuel healthy demand. This results in a pressure cooker effect, and the market’s traditional pressure release valve, new home construction, isn’t helping much, given that new home sales are running more than 40 percent below historically normal levels,” LePage said.
The new home construction market in the Sacramento region posted its strongest sales in eight years in May, but Sacramento’s growth engine remains relatively idle compared with the days when it produced thousands of new housing units each year.
CoreLogic said there were 186 new homes sold in Sacramento County last month, three less than in April this year but a 50 percent increase over 124 in May 2015. The median sale price of the new homes purchased in May was $393,750, down 6.3 percent from $420,000 last year.
LePage said there were 860 new home sales in Sacramento County in the first five months of 2016, the best showing in eight years for that period. He added, however, that new home sales are running more than 50 percent off the long-term historical average.
In addition to tight inventory, Sacramento-area housing experts pointed to surges in the high-end category throughout the region, a trend that is pushing home sale medians higher.
Luxury sales in the region have been on the upswing in 2016. In this year’s first quarter, Lyon Real Estate said that it logged 101 luxury home sales, a 65 percent increase over the first quarter of 2015. The company defines luxury as homes that sell for $900,000 or more in Sacramento, Placer, El Dorado and Yolo counties.
Lyon said the average price of active luxury homes listings in the Sacramento region in this year’s first quarter was slightly more than $1.5 million, and closed sales averaged $1.21 million.
While area home prices remain far below their peak in August 2005, they have recovered much of the ground lost in the housing market collapse. Sacramento County home prices hit bottom in late 2011 and early 2012, when the median was $155,000.
May home sales