HOME SALES COASTING AT YEAR END

Standing inventory remains healthy, with ten percent increase year-over-year.

The number of active and available homes for sale throughout the Greater Sacramento Region dropped a notable 14 percent during the month of November. Standing inventory still rested 10 percent higher than last year at this time with 3,581 homes listed on the market. Just two years ago in November of 2023, there were fewer than 2,500 homes available for sale. The increase is really good news for prospective buyers, especially with the recent softening of mortgage interest rates.

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Many interpret the current state of the resale home market as hovering in a contemporary “state of balance” with approximately 2.5 months of supply based upon the pace of new listings vs. sales. Historically speaking, 4 to 6 months have often been viewed as a “balanced market”. That perspective has been lowered in recent years due to the nuances created by an extended period of exceptionally low mortgage interest rates followed by rapid and significant increases intended to curb inflation. 

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A total of 1,428 resale homes went under contract as new pending sales, while 1,301 were posted as sold and closed across the entire region for the month of November. These sales categories reflected 13 and 24 percent drops respectively compared to October. The fall off is not unusual but it is still somewhat steep for the season. The good news though is that new pending sales were 8 percent greater than those in November of last year and December closed units are expected to be higher as well. All of these key market metrics remain much lower than average due to the higher mortgage interest rates available over the past few years. A more relevant comparison to offer is that new sales and closed escrows track approximately 30 percent lower than those in pre-pandemic November of 2018 and 2019. 

According to Pat Shea, President of Windermere Signature Properties, “We experienced an extraordinary economic and real estate boom during the pandemic and now continue our journey through this protracted market correction. As mortgage rates continue to fall a bit more and inventory continues to rise a bit more, many prospective home sellers and buyers will return to the market.”

The average closed sales price came in at $665,000 and median sales price $585,000 for the region over the past three months. Both are within a percentage or two of last year’s numbers. “We witnessed some rapid and significant price jumps first up and then down during that volatile pandemic period,” says Shea. “This year our market has found a greater equilibrium. Home prices are following a gradual growth process more typical of what we deem normal in and around Greater Sacramento.”

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“Currently the only homeowners who have equity concerns are those that purchased and financed over the past few years,” Shea adds. “Yet most homeowners stay in their property for at least 7 years and can always refinance. Mortgage interest rates may soften a bit more and prices appear to be relatively stable. The Federal Reserve Bank has ceased their dreaded hikes and has been slowly and modestly decreasing the Funds Rate. This indirectly but eventually affects mortgage interest rates. The job market remains pretty solid and we are quite certain that plenty of people are eager to sell, buy or both. Early December returns indicate that although the typical seasonal slowdown will continue, all major real estate economists are forecasting a much-improved resale home market in 2026.” 

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