Home Prices Increase as Sales Decline
By Julie Jalone
October 2, 2019
After reading several reports and surveys it is clear low interest rates are not driving the local housing market. Buyers are cautious right now and many are reluctant to jump in because of economic and market uncertainty. At our company, MagnumOne Realty in Roseville, we are working with quite a few clients who are ready to sell and buy but can’t seem to “pull the trigger” or outright change their minds and decide to stay where they are. We are also seeing more sellers reluctant to accept offers, especially if they don’t have replacement property. I am convinced this cautious behavior is moderating the low interest rates which would normally spur sales.
Here are the numbers for Placer County. The median price of homes has increased over the past year from $475,000 in July 2018 to $500,000 for this August. This is a year over year increase of over 5 percent. During this same time the number of sales declined 2.3 percent.
For Sacramento County the same trends are happening. The median price increased 4.3 percent to $386,000, during the July to August year while the number of sales declined by more than 5 percent.
So, what does this all mean for next year. Based on the Housing Forecast recently produced by the California Association of Realtors, pretty much a repeat of 2019. Interest rates are being projected to remain low, going down to even 3.7 percent. The median sales price is projected to increase 2.5 percent and sale levels remain about the same.
One element of the forecast from CAR which may have positive impact on our local Placer/Sacramento market is the changing migration patterns. As buyers search for more affordable housing markets, particularly first-time buyers, who are the hardest hit, moving out of state or to more affordable locations within California is happening.
If you have comments or questions about buying or selling in the current market, please contact me at the MagnumOne Realty office in Roseville (916-899-6571) or send me an email at firstname.lastname@example.org.