Spring is in the Air for Housing Market

New listings and available inventory are finally on the rise.

Last year at this time, painfully low standing inventory and a shortage of new listings entering the market throughout the Greater Sacramento region greatly restricted the opportunity for sustainable market momentum. These conditions were driven by persistent upward pressure on interest rates as well as quantitative tightening steps by the Federal Reserve Bank geared to fight inflation. Much attention was rightfully directed toward buyer hesitancy due to challenges with financing and affordability. Potential move-up sellers, however, were also impacted and reluctant to leave their existing lower-rate mortgages.

Currently, new sellers and buyers alike are showing signs that they are unwilling to wait as favorable mortgage rate movement remains elusive. Specifically, 2200 homes were listed as active and available on March 31st. That number represented a 29 percent increase year-over-year. New listings entering the market in March were also up 23 percent compared to last year. “These metrics indicate that sellers are tired of waiting and are ready to move forward with their life plans,” says Pat Shea, President and CEO of Lyon Real Estate. “This year, we will most likely see a steady climb back to a normal and balanced market.” 

See homes that are currently listed as active and available in the Greater Sacramento region

The resale market did start out rather slowly in the first quarter and consequently, only 3,630 homes successfully closed escrow. This was nearly identical to last year but things appear to be changing. New open escrows for the quarter were up 5 percent year-over-year with March alone, up 12 percent versus last year. March opens were also 30 percent higher than February which reflects a different type of momentum may be underway.

Even with the evidence of increased seller and buyer enthusiasm, standing inventory and new listing activity are largely just keeping pace with sales. These combined market metrics left the market with approximately 1.5 months of supply. This remains quite low by historical standards as 3 to 4 months are considered more healthy and balanced.

The average sales price for homes that closed in March rested at $667,000. This metric was up approximately 6 percent year over year and 3 percent versus February. Sellers that closed escrow in March received an average of 99 percent of the original list price and were on the market an average of 37 days. “These numbers also improved compared to those of recent months and further suggest the market is indeed gaining momentum,” says Shea.

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Shea offers that: “Most market analysts expect that home sales will continue to rebound throughout Greater Sacramento with typical seasonality likely to surface again at year-end. Do not be surprised, however, if lower rates eventually materialize and the year finishes much stronger than normal. Multiple offers are still occurring on many properties and cash buyers are also out and about. New mortgage holders can always refinance if interest rates further improve much like they did when rates trended down during our recent market boom. A reputable, real estate professional is more important than ever to help people comfortably achieve their home ownership and lifestyle goals.”

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This market information was presented by Lyon Real Estate based upon data provided by Trendgraphix Inc., a Sacramento-based reporting company.

About Lyon Real Estate

Lyon Real Estate is the leading independent real estate brokerage company in Greater Sacramento (Sacramento Business Journal). We are proud to be homegrown, privately owned, and internationally known. Lyon has served the area for over 75 years. Last year, the company closed a total of 3,191 transactions and $1.85 billion in sales volume. Lyon Real Estate has over 750 agents in 15 offices located throughout the region. The company is a member of the Leading Real Estate Companies of the World®, the largest network of premier locally branded firms, as well as LeadingRE’s Luxury Portfolio International® program. In addition to its real estate services, Lyon Real Estate offers RELO Direct, a global relocation program. Since 2015, the Lyon Cares Foundation has contributed more than $1,368,365 to local nonprofits.

About TrendGraphix, Inc.

TrendGraphix, Inc. is a real estate data analytics company based in Sacramento that uses local Multiple Listing Service (MLS) data. TrendGraphix provides highly visual performance and market statistical graphs to real estate brokers, agents, and MLS/Realtor associations across the country. TrendGraphix’s programs are currently used by tens of thousands of brokers and agents in more than 300 brokerages across the nation. For more information about TrendGraphix, visit www.trendgraphix.com.