Sacramento’s housing market is in a modest deceleration, particularly in sales volume, according to realtor.com.
Trends emerging in the last few months in residential real estate are likely to continue in 2019, according to a forecast from realtor.com.
The online arm of the National Association of Realtors released its official prediction for sales prices and volume Wednesday. Here is more from that and a chat with realtor.com’s director of economic research, Javier Vivas.
1. Sacramento should see 2.3 percent growth in average sales price in 2019, while the actual number of sales will drop by 1 percent. Nationally the figure is 2.2 percent for price appreciation, while sales will drop by 2 percent.
2. Vivas said Sacramento’s housing market is in a modest deceleration, particularly in sales volume. A lack of affordability both locally and in the Bay Area has pushed many would-be buyers to gear back, with the Bay Area market causing fewer people to sell homes and head east for cheaper options.
3. In addition to affordability, Vivas said, Sacramento isn’t poised to see as much job growth in the future, taking away a reason for people to migrate here. And while millennials are expected to be the main driver in housing in most markets even through the next recession, he said, a slightly older demographic of 35- to 44-year olds is likely to be a bigger sales force locally, he said.
4. A slowdown in growth doesn't mean housing is headed into negative territory, Vivas said. “It’s still very much a seller’s market in many places,” he said. But buyer confidence in the economy overall is actually higher than it is in housing, he added.
5. If buyer sentiment is having a strong effect anywhere, it’s in entry-level homes, where inventory is scarce. Vivas said those buyers have seen prices, and more recently interest rates, rising to levels they can’t afford, leading them to delay buying at all.