The latest news from our market has just come in, and today I’d like to share with you what this data means for buyers and sellers.
People ask me on a near-daily basis whether sellers still have the upper hand in our market. While the answer a few months ago would have been a resounding “yes,” conditions have shifted as we progress into this new year. Now, we’re in a much more neutral market than we were in 2018.
Contingencies that may have previously been a deal-breaker are now back on the table, and buyers have regained a lot of leverage. Part of the reason for this is the recent increase in supply. That said, this increase is not as significant as some have reported. The current level of supply, approximately 2.1 months’ worth of homes, is still relatively low.
Moving on, interest rates have also played a major role in the current state of our market. Rates are currently at a nine-month low, according to the Wall Street Journal. This means that now is a very favorable moment for buyers looking to make a move—especially given that rates are projected to reach 5% by the end of 2019.
You may be wondering what these conditions mean, overall. For sellers, the most important point to take away from this is that you must have an aggressive strategy for success moving forward. You will need to partner with a strong, experienced agent in order to secure a great deal.
Buyers, on the other hand, are in for greater opportunities than have been available to them in over three years.
The bottom line is that 2019 holds benefits for buyers and sellers alike, and I would be happy to help you make the most of these advantages.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
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Good afternoon, Sacramento and friends! Thank you for joining me today. Justin Vierra here with the Vierra Group at Keller Williams Realty in Sacramento, checking in with you as we do every month for your Sacramento real estate update. This month, my goal is to deliver to you what I believe is the one most powerful thing you really need to know about real estate today. But, before I get into that, we'll jump into the stats really quick.
If you've been following our conversation or listen to any media outlets about real estate, whether it be national or local, you know that a big part of the conversation is dominated about the market cooling off or slowing down or potential problems. But, I think what you should really know is that yes, the market is expanding. Month-over-month, we are listing more homes in general than we are selling, however, the homes that were selling are the same number of homes month-over-month as we have in the past. So, sales are the same; it's just that there are more homes coming on to the market than there have been in the past. If you think about it, in the recent past, there was almost nothing on the market. So, yeah, the market is expanding, but we're talking month-over-month 1/10 of 1%, so it's not that massive of an increase and we're still selling the same amount of sales, so keep that in mind.
When you look month-over-month, the average price is a little bit lower, $3,000-5,000 on average. However, if you look year-over-year, 6% increase in real estate for Sacramento. So, still a healthy market, but an expanding market, so it's really important to understand that dynamic. But, the most powerful thing I think you really need to know is just "be really careful about applying generalized information into your specific scenario". I can tell you from experience in Sacramento, working with clients in the $300,000-$400,000 price range in high demand areas: if you think that the market's really cool, you're going to miss an opportunity on a home that you really like. Then, at the same time, you can't necessarily apply that to the conversation at maybe $600,000-700,000, so you have to be really careful. Of course, neighborhood is really specific in how that price inflection works for you.
So, buyers in the market, my note that I have for you here is: definitely understand that the market's expanding. You've got more homes to choose from, but be careful to overthink that the world is on sale or in real estate, the seller's going to jump on a below-ask offer, $25,000 below ask, or something like that. We're just not seeing that. Sellers have a lot of equity in their homes and they're not necessarily desperate to sell. They would like to sell, but keep in mind, they're going to be a buyer themselves too because we see a lot of move-up buyers.
Sellers: my sellers out there. Be sure you're pricing your home right. Pricing right is going to do everything for you to make sure that your home sells within 30 days. If you're not pricing right, buyers are very sensitive to price and they're going to hold off until you make a move probably first, so you'll see your home sit on the market a little longer. That leads me into being patient as your second tip for sellers. You've got to be a little bit more patient. We might not necessarily sell your home in the first week, but keep in mind, it's probably going to happen in the second to fourth week. Right now, I have 74% of all homes in Sacramento selling inside of 30 days, and I think that sounds like a really strong market in a lot of regards.
So, that's the Sacramento real estate market update and the top tips that I have for you this month. I really appreciate you tuning in every month, subscribing, sharing any comments or questions that you might have, and we'll see you soon. Thanks a lot!
Good day, Sacramento! Justin Vierra here with the Vierra Group at Keller Williams Realty coming to you with your monthly market update for the Sacramento real estate market update as we do every month delivering you the most valuable and important information in today's market. This month, I want to bring you the two most important features of today's market that are affecting every buyer and seller in this market. So, let's jump right into it! The big, number one thing is inventory. Inventory is up month-over-month 8% and it's up 20% year-over-year. So, that means increased competition amongst sellers for those buyers in the market. That's one of the reasons you're seeing some of those price reductions, homes sitting on the market just a little bit longer than a couple days. Now it might take a couple weeks to sell your home, assuming it's priced and presented very well. So, inventory is a key feature of today's real estate market. I think though, it's probably more of an effect rather than a cause. The cause of the increased inventory is because of feature number two that is very very important for every home buyer and seller, and that's understanding affordability, or the lack thereof, really. There's a lot of pressure on affordability whether it's increased home prices, or on the buyer side, increased cost of purchasing a home, whether it be mortgage financing or the cost of the home itself. So, what you see are home prices going up, sellers recognizing that opportunity, inventory going up because it's a good time to sell. Then, because of the higher cost to acquire the home through the price or the financing there, you see the market expanding in time just a little bit more than it had in the earlier part of the year. That's why you see a little bit of a market slow down here, so I think the cause is affordability and the effect of the increased inventory. What does this mean for you? Well, if you're a seller, you have to remember that you're in a competition. Earlier in the year when there was very little competition, your margin for error was pretty low and with increased competition, your margin becomes much higher. So, it's super important for you to understand that you're entering into a competition and you also want to understand your pricing strategy really, really well, your marketing strategy really well. The number one thing you have to do as a seller is not take any shortcuts: no shortcuts on marketing, preparing your home for sale. Those Investments are really key to standing out amongst competition in your market in order to get your home sold well. Of course, remember, if it's not compelling, it's not selling. For my buyers, now might be one of the best times of the year to buy a home because there are more homes to choose from and the sellers are competing with one another for your offer. So, you have less competition going in amongst other buyers and you have more homes to choose from, which is nice. By more homes, I mean maybe 5 to 10, whereas earlier in the year, I was lucky if I could show you a home or maybe show you one to three homes that really met your criteria and were actual, viable options for you. So those are the two most important features of today's market: inventory and affordability. The keys to success as a seller are preparing your home for sale very well with that marketing strategy and doing all the things that you need to do to clean it up and present it very well. For my buyers, get out there in the market because there are more homes to choose from than there have been in quite a while. I'm Justin Vierra; thanks for tuning in. I really appreciate all the comments and feedback. Last month, I had a lot of phone calls, texts, and emails about the market update, and I'm happy to go further in-depth on any of these topics and support you in your real estate needs. So, thanks a lot for tuning in and your feedback. Much appreciated; see you soon!