Region’s Home Sales Hit the Brakes, Then Accelerate
Monthly new open escrows 55% higher at May 15 versus April 15
Like every other sector of our economy, greater Sacramento home sales were hampered in historical fashion during the month of April. By mid-May however, sales already appear to be on the rebound.
Since the unexpected market interruption actually commenced mid-March, nearly every resale housing metric reflected dramatic year over year fall off during the month of April. Specifically, closed sales were down 35%, new open escrows down 31%, new listings down 38%, and standing inventory down 25%. It did appear to be a very symmetrical ratcheting down of listing and sales activity as the level of inventory and rate of buyer demand kept the market at a very familiar two months of supply.
The journey through this unprecedented period has been circuitous at best. There were differing interpretations of “essential business sectors” as well as variances in both the stated restrictions and effective timelines related to local community “shelter in place” guidelines. Since our region is largely comprised of four counties, facilitating transactions for those that truly needed or wanted to buy or sell was extremely complicated.
Fortunately, there has been positive news and progress on the national, state and local health and safety front. Consequently, the first few weeks of May are clearly demonstrating that the greater Sacramento housing market is getting back on track. Compared to mid-April, reported new open escrows at May 15 were up 55%, new listings up 5% and standing inventory up 5%. Closed escrows for May will assuredly fall dramatically short of last year. That fact however, is due to the significantly reduced open escrow numbers logged during the period between late March and April 30.
Regardless of the 2020 market trauma, the year to date average sales price for the four-county area rested at $479,000 on April 30. That number reflects a 4.6% increase compared to the same period last year. Closed escrows recorded in May thus far have an average sales price of $475,000. Thus, price stability is expected to be maintained.
Greater Sacramento was forecasted by a number of national economists to be one of the first major market areas to get back on track after the national health crisis began to wane. There is certainly evidence to suggest that the expedition is currently underway. The process of getting people back to work has begun. Buyers have already re-engaged as they choose to take advantage of the mortgage interest rate phenomenon and affordability of our region. New listings are also steadily increasing as sellers gain confidence that best showing practices make it safer to proceed. Additionally, migration to greater Sacramento from higher priced and higher density population areas is expected to increase as employers continue to convert employees to permanent Work From Home (WFH) status.
Finally, I am pleased to announce Coldwell Banker is the first brokerage in the industry to employ a written COVID-19 Plan. I am proud to deliver, with expertise, state-of-art protocols and procedures designed to keep you and your real estate transaction healthy and safe. If you or someone you know is considering a move in the next couple of years, I would love to connect and share some of the concepts one should consider as they enter the "new normal" real estate market. If you would like to watch a three minute video where I discuss this topic, please click here.
As always, it is my pleasure to serve you and your referrals and I look forward to hearing from you soon!