Selling a home in the Sacramento region? Here’s advice from local real estate experts

Homebuyers in the Sacramento region suddenly have a lot more leverage. Prices are flat, fewer homes are attracting bidding wars and the inventory of homes on the market is on the rise.

Is the sellers market starting to fade?

Spiking mortgage rates have cut into the buying power for those looking to buy a home, increasing monthly payments and forcing many to be more conservative in their homebuying pursuits. Sacramento region real estate experts say that as buyers become more patient and picky, sellers will need to adjust their expectations. It may take a few more days for your home to sell and you are likely to get offers close to the listing price.

Ryan Lundquist, a Sacramento real estate analyst and appraiser, said “sellers need to recognize there’s been a temperature change and price (their homes) accordingly.”

“You have to start negotiating more,” he said. “Buyers are starting to be more sensitive to price and location and condition. If buyers are paying $500 more a month (due to mortgage rate increases), it means they are ready to cut bait as soon as the seller starts playing games.”

The first few months of the year were defined by wild stories of homes receiving a dozen or more bids and selling for $100,000 above the asking price. However, the number of homes receiving multiple bids appears to be on the decline; 72% of homes sold in April had multiple offers, but that number stood at 58% during the final week of the month, according to Lundquist’s data.

“We’re seeing the start of the sellers’ market softening a tiny bit,” said Sacramento realtor Tim Collom. “We have to educate sellers that they’re not going to get $200,000 above the asking price and that was their expectation. If the price is right, they’re getting full price offers.”

Sellers can take advantage of home equity

The percentage of homes that sold below the list price inched up between March and April, Lundquist said. Meanwhile, the number of available homes is approaching a two-year high, meaning buyers have more options.

Collom said sellers should avoid being greedy with their listings. He said he knew of a transaction in which a bid $100,000 over the list price was accepted before the buyer backed out.

“Pick the qualified buyer, not just the one who has the most money,” he said.

With prices flattening, it might be time for some sellers who have been holding off listing their homes to jump into the market. If prices remain flat – or even go down a bit this summer – sellers should consider taking advantage of the equity they’ve amassed.

“If people are looking to make a move, right now is a good time because there’s huge equity,” Collom said.

With mortgage rates expected to climb even more, sellers might also be motivated to list their homes now if they plan to purchase a different home.

“If they’re going to be buying after they sell, they’re going to be in the same boat (as other homebuyers),” said LeAnn Yang, a Sacramento-based realtor with Flyhomes.

Sellers will need to adjust their expectations when settling on a list price. That requires a detailed look at what comparable homes are selling for now – not what the market was doing earlier this year.

“You can’t price your house based on what you think the market was two or three months ago,” Collom said. “You have to price it based on what’s happening right now.”

This story was originally published May 13, 2022 at 5:00 AM.