Sacramento County has been slow to recover from the 2008 recession. In California, it was one of the last areas to see pre-recession job recovery. Much of its issues circled around a dependence on local and state government jobs that did not return as quickly as other sectors.
As a result, it is still trying to keep up with population gains with slow job growth. There has also been a stall in sales volume and construction, but the good news is that homeownership has finally started to see peaks.
However, it is clear a new recession is on the horizon due to COVID-19. This has buyers thinking prices will drop and some experts worrying there is potential for a full real estate market crash. Homeowners wondering should I sell my Sacramento home this year, will have to wait out the virus.
In January and February, housing prices rose in Sacramento along with San Francisco, San Diego, Oakland and Los Angeles despite the fact California’s economy has not done so well. Overall, it was predicted housing sales could drop by as much as 35 percent. However, it is more likely what will happen due to the pandemic is that housing sales will simply freeze. As a result, prices will drop. Of course, right now it is impossible to put listings up for sales because showings are out of the question in the current state of the pandemic.
The pandemic hasn’t kept buyers from searching for homes online, with expectations the virus will have to pass eventually. The entire situation points to prices dropping making homes more affordable. Combine this with highly desirable mortgage rates and all signs point to a sacramento home buyers, not a good time for sellers.
Since buyers will be primed to look for deals, they should keep in mind that despite forecasts prices will drop, they are not expected to drop drastically. However, if the pandemic carries on for months and months, people could begin to default on their mortgages. As well, new construction, which was doing well, is going to slow considerably due to the outbreak.
China Returning to Life Before the Virus
Hope is on the horizon as China sees the virus finally coming under control with symptom-free people being given the green light to return to work. As long as the U.S. is able to follow suit in flattening the curve of the virus spread, they could be just a month away from the virus running its course. Unfortunately, this is just too difficult to call.
California has seen some economic issues, which was evident with the drop in house prices below the $600,000 mark. Statewide prices are on the rise, but when you drill down, many areas are seeing prices drop at an alarming rate such as the Bay Area, while San Francisco saw price increases. It is a very fickle market that often is contradictory from area to area. In general, it was houses in the affordable house range that dropped statewide.
Unfortunately, demand for homes is down which means prices will continue to drop. Looking at the latest report available from the Sacramento Association of Realtors, January saw a decrease in sales of 24.1 percent from December and the median sales price decreased by 2.6 percent to $375,000. However, this also represents an increase year over year of 6.5 percent.
As well, in Metro Sacramento homes tended to sell slightly above asking which means there is a demand for homes and california family home buyers are willing to negotiate to get their hands on a home. As always, this is dependent on the area. For example, in Sacramento–Roseville–Arden-Arcade where housing prices are higher, they tended to sell below asking. This area had a median average price of $435,941 in February, whereas Sacramento’s median price was $356,830.
Price Ranges in Sacramento
When looking at housing prices in Sacramento’s popular neighborhoods prices varied quite a bit:
- East Sacramento: $532,400
- River Park: $522,600
- Elmhurst: $390,500
- Campus Commons: $390,400
- Medical Center: $371,200
- North Oak Park: $324,900
- Tahoe Park South: $323,100
- Colonial Heights: $276,300
The unfortunate truth is that we are in uncharted lands due to the coronavirus so we can only rely on statistics before the virus hits California.
Relying on the Pandemic to End
It is only logical that the virus will continue to slow all markets affected by the pandemic that will drop demand and in turn housing prices. Because California has had to put a focus on containment, it will suffer more from an economic standpoint. The state is also suffering from more disruptions and higher unemployment due to the virus. All of these things point to home price declines.
This is not the time to consider buying or selling. Instead, it is time to focus on health and safety. However, while most people are stuck at home wondering what to do, planning for the future is never a bad thing. When we look at the market before the pandemic reached America, homeowners were feeling good in California and Sacramento.
If you were considering selling before this virus hit, you can still look to the future to do so. It will just take longer for you to find the right time to list your home. Once buyers begin to overcome the shock from the entire situation, life will slowly get back to normal and so too should the market.
Waiting for Life as Usual
People will want to resume “normalcy” as soon as the pandemic ends but will also be faced with potential financial hardship. If people are forced to sell as a result of their own financial struggles, they should be doing so before they face foreclosure. An easy solution to overcome loss is to look at selling to investors who can pay cash for the home at a fair price.
As long as owners have equity in their homes, they might be able to ride out the storm with a cash sale that will provide them with the funds they need to get back on their feet. They can then downsize, ride things out a little longer and look to getting back into homeownership once their incomes are stabilized.
Selling your Sacramento home this year could end up being far more complex than in previous years. We understand how you feel and will help you work through the details, so you get a fair price. Get in touch with us today at 916-990-7374 or check out our instant offer calculator.