As the second quarter of 2015 comes near to a close, the local high end real estate market shows only minimal clues about where it will be moving this year. The general trend has been positive as the real estate market continues to grow as the economy strengthens. Although the market has been strong overall, there have been some localized and seasonal ups and downs. This is more indicative of a slower more normal real estate market.
Apart from luxury homes, the other sections of the market appear stable and continue a positive trend. Entry level homes are still selling very well. That section of the market has slowed slightly, but remains mostly consistent. The move-up and mid level homes have also slowed. This section of the Sacramento real estate market shows more variation. Some homes are sitting much longer, while other homes that appear similar are selling within days or weeks. Buyer’s are taking their time when committing to a property, and are cautiously searching for the best value. I expect to see this trend continue for possibly another 18-24 months.
The high end real estate market in Placer County (Roseville, Rocklin, Granite Bay, Loomis and more) is constantly fluctuating. The local market has been very seasonally sensitive and this year has been no exception. While the number of sales has been fairly consistent, the amount of available inventory has spiked since December. There is currently a surplus of luxury homes available. This is increasing sales times, and creating a large amount of competition for those that are thinking about selling a home in Granite Bay or other local communities.
Thankfully sales prices have remained fairly stable overall. The graph below shows median and average sales prices over the last 14 months. Although the graph shows major variations between months, the trend is fairly flat year over year. The decline in the “For Sale” pricing indicates that sellers are adjusting their list price to be more realistic with actual sales prices in the area. If this trend continues we should see an increase in the percentage of sale price vs list price as homes sell closer to their reduced listing prices.
Rates appear to be stable, the local economy is doing well, and the foreclosure wave is fading in the rear view mirror. I expect the high end real estate market to remain stable for the foreseeable future. The strong Bay Area market will continue to drive buyers to areas like Sacramento. This is forecast to continue the local demand for quality homes in desirable school districts.
A quality listing strategy, professional advertising, and an accurate listing price will be very necessary in the coming 24 months. As more sellers take advantage of the value increases in high end real estate the available inventory will continue to increase. Seller and listings will need to set themselves apart from the rest if they hope to sell in less than 3 to 6 months.
Overall my outlook is positive, but measured for our local real estate market during the next 18-24 months.