Sacramento’s Mini Housing Bubble Just Burst!

Sacramento’s Mini Housing Bubble Just Burst! 

I really hate to be the bearer of BAD Sacramento area real estate news but I didn’t get where I am sugar coating things.  You may have seen recent real estate market reports which report that from July 2012-July 2013 Sacramento area home prices rose 39%.  Being in the thick of it, I totally agree.  Sacramento home prices rose quickly for a few reasons:

• Low Inventory: Bank Foreclosures were few and far between and there wasn’t enough equity for many homeowners to sell.  With few choices, buyers were competing for whatever homes were available.
• Investors: Large investor groups who hold and rent loved the Sacramento area and their low prices in 2012.  So many jumped in to buy, beating out traditional buyers, overbidding and driving prices up.
• Mortgage Rates:  With historically low mortgage rates in 2012, and talk of rising rates, buyers were sure THIS was the time to buy a new Sacramento Area Home.  They poured into the market, determined to buy, and aggressively made offers.

Now it’s October 2013 and the news media is SUPER excited to announce that Sacramento area real estate was up 39% in July.  What’s happened in the last 2 months? A lot has changed!  Home prices are down, inventory is up, the anxious buyers aren’t so excited anymore, and homes are pretty much just sitting on the market.   Home prices are too high for investors so they’ve stopped adding to their rental portfolio.  Homeowners, who’ve perhaps waited years for positive equity in order to sell, jumped in the market all at once with higher prices, giving buyers lots of options and eliminating all the competition and multiple offers.

As a top producing Sacramento area real estate agent for the last 14 years, I’m really in tune with the market, what’s happening, and when it’s changing.  We are entering a shift and a slow down.  It’s safe to say that Sacramento’s mini housing bubble has just burst.  There is however, a silver lining.  For buyers it’s more choices, less competition and sellers who are more willing to negotiate.  Typically, home buyers always get a better deal in the fall and winter.  Sacramento home buyers who were frustrated this last year will have a much easier time buying a house now.  If you are a homeowner, it’s hard to say how low prices will go.  They won’t be going back up anytime soon but if you have home equity, now may be your best bet to sell your Sacramento home.  Short sales are still a good alternative option if you don’t have equity and need to sell.  I’ve sold over 100 homes as short sales and most of my clients completely recover and are ready to buy again in 2-3 years.

As always, everyone’s buying and selling situation is unique.  Give me a call to talk about your specific situation: 916-205-2265.  This article was written 10/1/13 and real estate news may have changed if you reading this at a later date.

Sacramento’s Mini Housing Bubble Just Burst!