Sacramento Projected as #1 Market in CA for 2021
With all the information out there about the housing market, it can be easy to get overwhelmed about when the right time to buy will be in 2021. Every day new articles arrive in the Sacramento Business Journal, Wall Street Journal, and my favorite appraisal blog by Ryan Lundquist, with their predictions of the real estate market and what it’s doing to housing prices and interest rates.
If you’re looking at buying this year, indicators all point to one thing - the sooner you start looking, the better.
The current state of the Sacramento real estate market
We are currently at an interesting point in the Sacramento real estate market, as interest rates remain historically low…but so does inventory. We have been seeing homes selling in the first week with multiple offers to choose from and sale prices over list price. Currently, in the greater Sacramento area, we're seeing an average of 21 days on market and sales prices on average are 100% of list price.
When comparing December 2020 to December 2019:
Sacramento county homes are averaging $491k, a 13.7% increase over the same month last year, 17 days on market, and 101% of list price.
Placer county homes are averaging $652k, a 20.1% increase over the same month last year, 25 days on market, and 99% of list price.
What does this mean for you as a buyer?
Some buyers have been postponing their purchase in hopes that prices might drop, but that doesn’t seem to be on the horizon any time soon. The greater Sacramento are is experiencing a shortage of homes, very few active listings, and an increased buyer demand due to COVID19. In mid-December, interest rates dropped to the lowest level (2.67% for a 30 year fixed rate mortgage) since Freddie Mac began tracking them in 1971. A year ago in 2019, the average was 3.73%…this is a huge decrease!
Why buy in Q1?
Seasonally, the Sacramento real estate market gets busier as we head into spring and summer, which means more competition for you as you search for the best homes in your desired neighborhoods. February and March’s rainy seasons are a prime time to beat all those warm-weather buyers to the punch, as you’ll be able to take advantage of the current softer prices and interest rates. Experts anticipate a flatter rate of appreciation this year but are still expecting prices to increase statewide by 8.1%, which means that buying earlier in the year will yield better opportunities compared to later in the year.
Worried you don’t have enough money saved yet?
If you think you don't have enough money for a down payment and closing costs, reach out to me and I’ll put you in touch with a lender who offers special programs. There are programs and strategies out there to help that they can find for you and waiting until later in the year could actually end up costing you more in the end.
For example, let's say you're in the market for a $400K home but you want to put more money down than you already have. If values increase by 5%, the future list price would be $420K, costing you $20k in price plus higher property taxes and closing costs. In this situation, if you aren't setting aside $1,700 per month, you're moving backward and losing money!
Working with a Sacramento realtor is the quickest way to find insider information into the market. Contact me today for a customized experience and a plan to purchase your next home.