Gains remain strong in the Sacramento market, despite falling values.
As we enter the holiday season, the question on everybody’s mind is, “Are home values going down?” We’ve got all of the latest data for you to help answer that question.
As we’ve predicted, we’ve seen prices level off and come down to accommodate higher payments. From October 2021 to October 2022, we’ve seen the average median price in Sacramento come down by 40%. That means that home values which were up $100,000 year over year, are now only up by $50,000, significantly reducing the pandemic gains. This is entirely due to the higher cost of a 30-year fixed mortgage, but it is not a dramatic crash of the real estate market.
Low interest rates and payments drove a spike in demand that shot home prices up, but since we saw 35% gains and gave 10% to 15% of that back, we are still in a very good equity position. It would be like going to a casino with $1,500 and leaving with $2,500, even though you were up at one point by $5,000.
You’re still ahead of the game, but you could have walked away with more if you had been disciplined.
The key takeaway here is that if you are a homeowner looking to sell in the next 24 months, now is the time to do it. It would be wise to sell within the next 90 days because I predict we will see 7% to 9% rates by the end of the year, and 10% rates by January, which will further suppress home prices.
This is also the best time to look at buying, for much the same reason: We are going to see higher rates in the coming year. Ownership remains a better option than renting, and even if we see a dip in values, we can still expect appreciation in the long term, and interest rates won’t remain at 10% forever.
So if you are considering either buying or selling a home, now is the time to reach out to us and get a consultation. We are available by phone or email; you can even get a free price estimate on our website. We’d be happy to help you.