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The home sales market this spring is not the booming business it once was in the Golden State. But new sales data comes as a relief: The market did not turn into the collapsing house of cards some feared it would.
Spring data from CoreLogic and other sources indicate sales numbers are among the lowest in years. March in Sacramento was the slowest in four years. But buyers have returned to the market and prices are either holding steady or, in the case of the Capital City, creeping upward again.
Word on the street suggests the Sacramento market has been picking up since February as rains abate, flowers bloom, and buyers and sellers come out of hibernation.
Realtor Erin Stumpf of Coldwell Banker said she and clients are finding themselves in multiple-offer situations again on mid-range priced homes – similar to last spring. A client recently outbid a dozen others for a modest Elk Grove home, paying more than the asking price.
Other brokers report a similar sense that the market has rekindled after a notably dead winter. “It was crazy this time last year; it’s not quite as nuts now, but I’m getting aggressive multiple offers in my listings,” Stumpf said.
Sales of new homes, in particular, are up in Sacramento County compared to early spring last year.
Notably, the city was among the state’s leaders over the past year in new home construction, adding 2,400 dwelling units, most of them single-family detached houses. That in turn has fueled population growth locally. Sacramento’s population gain last year, though modest at 1.5 percent, was the highest among the state’s top 10 cities.
Greg Paquin, who tracks the Sacramento new home market for builders, says that population growth, mortgage interest reductions and economic optimism are keeping the local market stable.
“People are ... not necessarily worried about a recession this year or next,” he said. “This together results in greater consumer confidence and a greater willingness to purchase a home and more importantly, greater buying power.”
The local market stability comes as a relief to real estate watchers who watched over the summer and winter as buyers disappeared after a multi-year run-up in prices dramatically reduced the percentage of California and Sacramento residents who could afford a median-priced home.
“The market right now feels profoundly different than it did during the last two quarters of 2018,” said Ryan Lundquist, a Sacramento real estate analyst. “The market was very dull during that time period, but now it actually feels fairly normal for a spring season.”
CoreLogic, a national real estate data source, reports the median price for all homes sold in March in Sacramento was $355,000, up only slightly from the same month the previous year, when the median was $350,000.
There are some signs that sales prices have tilted up in the last few weeks. If that continues and interest rates rise, houses may sit on the market longer, real estate watchers say, leading to similar stagnation as last year.