There are some things in the real estate market Sacramento home sellers need to watch:
- Mortgage rates are rising. They used to be in the upper 3% range. Now they're in the mid 4% range. Just a 1/2% rise may mean higher monthly payments, sometimes in the hundreds of dollars per month. If mortgage rates continue to rise, this will take the air out of the price rise balloon as fewer people can afford to buy these pricey homes. Sellers may be forced to lower their asking prices to make their homes more desirable to home buyers. This alone is reason to sell your house now while there's still a strong market for it.
- Inventory of homes for sale remains low. While this on the surface may be good for home prices and home sellers, note that the National Association of REALTORS(r) blamed a recent year over year sales drop of almost 5% on the lack of inventory and...
- Rising home prices. The REALTORS(r) say that, nationwide, home prices have risen almost 6% over the past year. This further eliminates the number of home buyers.
- Months of inventory, how long it takes to sell the whole inventory of houses for sale at the current sales pace has been rising from about a one month inventory in Spring 2017, to about 1.4 months in January, 2018 here in the general Sacramento area. This is a small indicator of a market where sellers have less dominance. Although, let's be clear, it's still a seller's market.
- Average days on the market in Sacramento has risen from only 19 days in July of last year to 37 days today. This is an indicator that maybe asking prices are too high and that sellers have to be more moderate in what they ask for their homes.
- The number of Sacramento area houses sold and closed at 1,080 in January, 2018 is way down from the 1,820 homes sold in June of last year. This more than likely is due to lower inventory, some 1,382 for sale today vs. 2,500 homes for sale last September.
- The median price of a Sacramento home continues to climb to $349,950 as of December 2017 compared to $315,000 one year previously. That's an 11% increase in only one year. NOTE that the median price of a home in May, 2006 was $379,000 before the big readjustment. We're getting close to that figure! We've been pointing this out to home sellers since last year. Watch THIS video to see.
- The return of low down payment loans. I recently heard from a lender that they are now offering 100% loans, no down payment. Some lenders offer stated income loans where they accept what you tell them you make. These loans were around before the market readjustment in 2008 and they're now available again.
So here's the big question I hear from potential home sellers: If I sell today where will I go? We recommend selling your home and finding another place to live, maybe with relatives, or renting an apartment while you go about finding another replacement home to buy. One of my clients sold their home and are now renting waiting for an opportunity to buy a more affordable home. Some of my clients buy their next home first, then sell their existing home. These are far more stress-free scenarios than buying your next home contingent upon the sale of your existing home. Since real estate is an art, not a science, you're asking for heartache if you gamble too hard on buying another home contingent upon the sale of yours. The exception might be buying from a builder. Some builders will allow you to market your home while waiting for theirs to be built, maybe a 6 month wait.
Bottom line? Even if you're just thinking about selling please call us at 916.682.6454 to hear our suggestions. We've been doing this for 35+ years and have seen almost everything in real estate. These days, you have to have a very strong motive and desire to move. Are you serious about considering the sale of your home? Please call us today and let's talk about it.
David Jurewicz, REALTOR(r) (00661096) RE/MAX Gold 916.682.6454