Sacramento’s once hot housing market continued its cooling trend in July, with median prices dipping slightly in five of the six local counties.
The local numbers mirror those in the Bay Area, where sales numbers and prices have begun to flatten in recent months in what some observers say is a natural plateau. Price increases over the last seven years have left most households statewide unable to afford a median-priced home.
In Sacramento County, the median price for home sales, including used and new, dropped marginally in July to $360,000 from $362,000 in June, according to CoreLogic, a real estate analytics company.
The July $360,000 median price is, however, 4.8 percent higher than the Sacramento County median of $343,500 one year prior.
The recent flattening has fueled some speculation that home prices in Sacramento will face a dropoff, which would be welcome news to potential buyers who have struggled to find affordable homes.
Real estate watchers, however, point out that summer market doldrums are typical, and not necessarily a boon to buyers if the number of homes on the market remains tight, which continues to be the case.
Analyst Ryan Lundquist pointed out that total home sales in the Sacramento region between January and July were still slightly higher than last year, suggesting that overall the real estate market remains solid, though not booming.
“I’m not concerned at all about a change from June to July because that’s not really unexpected,” he said. “What I will be concerned about (is) if we start to see a big difference” in sales volume over the course of a full year.
Jordan Levine, an economist for the California Association of Realtors, said he sees a “market shift” toward a slower growth period, where home prices will continue to rise but at a more pedestrian rate.
On one hand, he said, mortgage interest rate increases can dampen buyer enthusiasm. But the economy overall remains solid. “We are at a 40-year low in unemployment and we are starting to see wage and income growth after a long hiatus.”
Builders in Sacramento, burned during the construction frenzy of the mid 2000s, remain cautious about adding new stock to the market.
Placer was the only local county that saw its median price increase, going from $495,000 in June to $498,000 in July. El Dorado County’s median price dipped as well from $499,000 to $485,000.
In the Bay Area, the median price dropped to $850,000 in July, down from the record high of $875,000 in May and June. The number of homes sold dipped 10.2 percent from the previous month.