2025 Greater Sacramento Real Estate Predictions: What Buyers, Sellers, and Agents Need to Know

As we prepare to step into 2025, the Greater Sacramento real estate market is set for another exciting year. Whether you’re a real estate agent navigating the ever-evolving industry or a client considering buying or selling a home, staying informed about market trends is essential. While many industry experts have shared their forecasts for the coming year, we know from experience that nothing is ever certain. Staying informed and working with a trusted, professional real estate agent remains your best strategy. Here are a few predictions we believe will resonate in our region!

1. Home Prices Will Stabilize

After years of fluctuating prices and unpredictable market trends, 2025 is shaping up to bring much-needed stability to the Sacramento housing market. While some areas may experience modest price increases, the rapid escalations that characterized recent years are expected to taper off, paving the way for a more balanced and sustainable environment for both buyers and sellers. This shift marks a significant turning point, allowing for greater predictability and a more measured approach to real estate transactions.

“Following the volatility brought on by the pandemic, we’re finally seeing home prices stabilize,” says Pat Shea, President of Windermere Signature Properties. “2025 is ushering in a new era of gradual, sustainable price growth, which is essential for the health of the Greater Sacramento market. Buyers can make more confident decisions without fear of skyrocketing prices, while sellers benefit from a more predictable and reliable market environment. This balance fosters a stronger, more resilient housing market that will support our region’s growth well into the future.”

Read the latest Sacramento Market Update Here

2. Inventory Levels to Gradually Improve

Low inventory has been a persistent challenge in recent years, but 2025 may bring a gradual increase in available homes. New construction projects in suburban and semi-rural areas are expected to boost inventory, providing buyers with more options. For sellers, this highlights the importance of pricing homes competitively to attract interest. Between December 1st and December 25th, the luxury market (Luxury Portfolio Interternaon recognizes homes priced above $1,000,000) reported an inventory of 4 months. This reflects steady progress in the right direction, showing only a slight decrease from the same period last year, which recorded a 4.3-month supply.

Take a look at the Greater Sacramento Luxury Market’s current inventory

3. Suburban Demand Remains Strong

The pandemic-driven shift towards suburban living continues to influence buying trends. Areas like Folsom, Lincoln, and Elk Grove are expected to see strong demand, particularly from families seeking more space and excellent school districts. Real estate agents should focus on these areas to cater to motivated buyers.

Looking to move to Folsom? Find your next home today!

4. Interest Rates Stay Relatively High

While the Federal Reserve’s rate hikes may taper, mortgage rates are expected to remain higher than pre-pandemic levels. Buyers should budget accordingly, and agents can assist by connecting clients with experienced mortgage professionals to navigate financing options. 

“While rates remain higher than the historic lows of 2020-2021, we’ve seen signs of stabilization, making it easier for clients to plan their next steps. Even small changes in rates can significantly affect affordability and monthly payments”, says Dave Waldschmidt, Scenic Oaks Funding Mortgage Advisor & Sales Manager. 

5. Increased Use of Technology in Transactions

The digital transformation in real estate continues to gain momentum. Virtual tours, online transactions, and AI-powered tools are becoming the industry standard. For agents, embracing the latest technology is essential to remain competitive. Clients should prioritize working with tech-savvy agents who can simplify the buying or selling process. Similarly, agents should seek out brokerages that not only provide a robust technology package but also offer comprehensive training to help them excel in an ever-evolving digital landscape.

The Greater Sacramento region offers a wealth of opportunities for buyers, sellers, and agents alike. By staying informed and proactive, you can make 2025 a successful year in real estate. If you’re ready to take the next step, connect with your trusted real estate professional to guide you through the journey.