Real Estate Analysis and Commentary

California Home Sales Rise From Year-Ago as Median Home Price Breaks a New Record in May

• Existing, single-family home sales increased 5.1 percent year over year to 268,810 in May on a seasonally adjusted, annualized basis and were down 3.1 percent from 277,360 in April.
  
  
• The statewide median home price reached a record high for the second straight month to $930,260, up 2.3 percent from April’s downwardly revised price of $909,410 and up 3.1% from $902,040 in May 2025.
  
  
• Year-to-date sales increased 1.2 percent through the first five months of 2026.

SACRAMENTO (June 17) – California home sales increased from the previous year in May for the second consecutive month, while a shift in sales of higher-priced properties buoyed California’s median home price to another historic high as housing supply tightens, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

Infographic: https://www.car.org/Global/Infographics/2026-05-Sales-and-Price

With home sales increasing at a year-over-year growth pace of 5.1 percent to a seasonally adjusted annualized rate of 268,810 homes, the California housing market experienced the strongest annual gain in eight months, according to data collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. On a month-over-month basis, home sales dipped 3.1 percent from April’s upwardly revised 277,360 units. The statewide annualized sales figure represents what would be the total number of homes sold during 2026 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

May’s statewide sales remained below the 300,000-unit benchmark for the 44th consecutive month. Despite the month-to-month pullback, May’s stronger-than-expected performance pushed sales up 1.2 percent through the first five months of 2026, an indication that homebuying activity has picked up as geopolitical tensions showed signs of easing in recent weeks.

“California’s home sales softened in May as broader economic uncertainty continued to weigh on consumer confidence and homebuying sentiment,” said C.A.R. President Tamara Suminski, a Southern California broker and REALTOR®. “Even so, the recent easing in mortgage rates is an encouraging development, and if that trend continues, it could help bring more buyers and sellers back into the market and support a gradual improvement in housing conditions beginning in the third quarter.”

Driven by continued sales gains in the higher-priced segment, California’s median home price reached a new record high of $930,260 in May. The home price rose 2.3 percent from April’s downwardly revised price of $909,410. The monthly gain was more than double the historical average typically observed between April and May over the past 30 years. The median price climbed 3.1 percent year over year, marking the strongest annual gain since March 2025. The increase was enough to push the statewide median above $900,000 for the second time in 2026.

A record share of million-dollar home sales in May continued to shift the statewide sales mix toward higher-priced properties. Sales of homes priced between $1 million and $2 million surged 8.2 percent from a year earlier, while sales above $2 million soared 8.5 percent. By comparison, sales in the $500,000 to $1 million range declined 3.4 percent, underscoring the affordability challenges facing middle-income buyers. Strong equity market performance over the past two months supported higher-end housing demand. The growing concentration of activity in the higher-end segment was also reflected in the share of million-dollar home sales, which reached a record-high 38.5 percent of all transactions.

“Housing supply has remained constrained in recent months as the lock-in effect continued to put many would-be sellers on the sidelines, intensifying competition and placing upward pressure on home prices,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “While the statewide median price typically reaches its seasonal peak in May, the recent easing of tensions in the Middle East could bring more buyers back into the market and keep price pressures up at the start of the third quarter.”

Other key points from C.A.R.’s May 2026 resale housing report include:

• Four of California’s five major regions recorded year-over-year increases in non-seasonally adjusted home sales in May, although the pace of growth varied considerably across the state. The Central Coast led all regions with a robust 21.4 percent increase from a year earlier, while the San Francisco Bay Area (5.5 percent) and the Central Valley (0.1 percent) also posted a more moderate gain from last year. Southern California (-0.4 percent) and the Far North region (0.4 percent) both recorded an annual decline in sales but the dips were attributed primarily to fewer days of transactions in May 2026 compared to the same month last year.
  
  
• At the county level, 32 of the 53 counties tracked by C.A.R. recorded year-over-year sales gains in May, with half (16) posting double-digit increases from a year earlier. Glenn led all counties with a 54.5 percent surge in sales, followed by Monterey (41.2 percent) and Amador (39.5 percent). Meanwhile, 18 counties experienced annual sales declines, including 9 that fell by more than 10 percent. Trinity posted the steepest drop (-72.7 percent), while Del Norte (-50.0 percent) and Plumas (-31.0 percent) recorded the second- and third-largest declines, respectively. C.A.R. notes these dramatic fluctuations are largely due to small transaction sizes and shifting sales mixes rather than actual home-value depreciation.
  
  
• Housing inventory remained relatively tight in May, slipping further below its year-ago level despite edging up from April. The Unsold Inventory Index (UII) increased 3.0 percent from April to May but declined 10.5 percent on a year-over-year basis. While total active listings followed their typical seasonal pattern and continued to rise month-to-month, they fell below year-ago levels for the fourth consecutive month and posted their largest annual decline since December 2023. Elevated mortgage rates, persistent inflation concerns, and ongoing geopolitical uncertainty may discourage some homeowners from entering the market, particularly those reluctant to give up existing low-rate mortgages. As a result, inventory constraints are likely to remain a challenge during the peak homebuying season and could prevent inventory conditions from improving during the remainder of the buying season.
   
• Total active listings declined on a year-over-year basis in 40 of the 53 counties tracked by C.A.R., reflecting improving housing demand and a tightening supply environment in many parts of the state in May. San Francisco recorded the steepest decline, with active listings plunging 42 percent from May 2025, followed by Marin (-31.2 percent) and Nevada (-31.1 percent). Another 19 counties posted double-digit declines in active inventory, suggesting that buyer demand has strengthened faster than new supply has entered the market. Meanwhile, 13 counties recorded year-over-year increases in active listings, led by Mono (47.8 percent), Calaveras (28.8 percent), and Tulare (23.9 percent). The widespread decline in active listings reinforces the broader statewide trend of tightening supply conditions heading into the summer months.

   

• The median number of days it took to sell a California single-family home was 22 days in May, unchanged from a year ago.
  
  
• The statewide sales-price-to-list-price ratio* has remained consistent for a few months at 100.0 percent, mirroring both last month and last year’s numbers.
  
  
• The median price per square foot** for an existing California single-family home increased from $439 in May 2025 to $447 this May.
  
  
• The monthly average 30-year fixed-rate mortgage rose to 6.44 percent in May, up from 6.33 percent last month, but down from the 6.82 percent average recorded in May 2025.

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state and represent statistics of existing single-family detached homes only. County sales data is not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower end or the upper end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its original list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 53 counties.

California passes sweeping reform to expedite new housing 

This week, California Gov. Gavin Newsom signed into law a sweeping set of housing and infrastructure reforms as part of California's 2025-2026 state budget, delivering the state's biggest environmental review and permitting rollbacks in decades, the governor's office said.  

The move — via Assembly Bill 130 and Senate Bill 131 — overhauls the state's environmental law, the California Environmental Quality Act (CEQA), and expands other housing-related acts in an effort to reduce the barriers, timelines and costs of new housing across the state.

What the new changes mean: In addition to infrastructure, the new law focuses on infill development, which is desperately needed in California — a state that was already facing a dire housing crisis even before the historic wildfires that destroyed thousands of homes earlier this year. 

An important provision of the landmark reform is the exemption of local rezoning efforts from CEQA review for infill housing in areas that are already prepared or well-suited for development and housing. However, protections for natural and protected "sensitive lands" will be maintained.

The new effort also freezes residential building standards through 2031, which will help provide consistency and predictability for new home builders and developers in the immediate future. 

What supporters said: "No longer will CEQA be leveraged to stall critical county wildfire, water and housing projects. This legislation will make California more affordable for families by helping to alleviate our housing crisis and, in turn, reducing homelessness," California State Association of Counties President and Inyo County Supervisor Jeff Griffiths said in the announcement.

"This is one of the biggest wins for housing in a generation," said Brian Hanlon, CEO of California YIMBY — a special interest group that is part of a larger national effort to tackle restrictive local zoning and push a housing "abundance" agenda. The legislation "makes it crystal clear: building infill housing is not a threat to the environment — it's how we save it."

Are environmental regulations taking too much blame? California's Planning and Conservation League and its PCL Foundation, which were involved in the original effort to draft and pass CEQA in the early 1970s, suggest that environmental review and regulations are being "unfairly scapegoated."

Infill "is a complex issue, with many factors combining to limit our ability to rethink and rebuild California's urban cores," the group wrote in a blog post. "Moreover, based on the evidence we do have, it appears that CEQA receives a disproportionate share of blame and attention when it comes to infill."

In the wake of the devastating Eaton and Palisades wildfires, some economic and housing experts told Real Estate News that environmental protections should be the top consideration for rebuilding — and questioned whether some areas should be rebuilt at all.  

"We need to allow nature to regenerate and rejuvenate the environment," Seydina Fall, a senior finance lecturer at Johns Hopkins Carey School of Business, told Real Estate News in January. "I mean, to me, it's just very obvious what's happening — it's nature rebelling against us. We maxed out the credit card."

Nestled in the Central Valley region of California, Sacramento County boasts a thriving and dynamic housing market. As one of the most populous counties in the state, it offers a diverse range of opportunities for homebuyers and investors alike. The Sacramento housing market currently leans slightly towards sellers, given the positive month-to-month and year-over-year changes in median sold prices.

However, the decrease in sales from the previous year suggests that buyers may have more negotiating power compared to the previous year. While the statewide median home price in California experienced a modest decline in December, Sacramento County bucks the trend with an upward trajectory. The month-to-month increase in median sold price indicates a local market that remains resilient to broader statewide trends.

How is the Sacramento housing market doing currently?

Sacramento County is a vibrant and bustling area that serves as the heart of the Central Valley region. With its rich history, vibrant culture, and strong economy, it has attracted an influx of residents seeking a high quality of life and excellent opportunities. The county's strategic location, excellent transportation links, and numerous amenities have contributed to its popularity among both local and out-of-state homebuyers.

In December, the California housing market experienced a period of stagnation, as reported by the California Association of Realtors (C.A.R.). The existing, single-family home sales totaled 224,000, maintaining a flat trajectory from November but reflecting a 7.1 percent decline compared to December 2022.

The median home price in California for December 2023 stood at $819,740. This figure represents a marginal 0.3 percent decrease from November but demonstrates a robust 6.4 percent increase when compared to the same month in 2022.

Sacramento County Real Estate Snapshot

Zooming into the Sacramento County housing market, let's delve into the specifics of December 2023:

• Median Sold Price: The median sold price of existing single-family homes in Sacramento County reached $535,000, showing a noteworthy increase from $522,290 in November.
• Sales Metrics: While the sales price experienced a 2.4 percent month-to-month growth, the year-over-year change was a remarkable 9.2 percent, underlining the market's upward momentum.
• Comparative Regional Analysis: Sacramento County outperformed the Central Valley region, with a higher median sold price and a more favorable year-over-year sales percentage change.

Is Now a Good Time to Buy a House in Sacramento?

For potential homebuyers in Sacramento, the current scenario presents a mixed picture. The increasing median sold prices suggest a competitive market, favoring sellers. However, the dip in year-over-year sales may provide buyers with opportunities for negotiation. As always, individual circumstances and long-term goals should guide the decision-making process.

Central Valley Median Sold Price and Sales Data

December 2023 provided valuable insights into the real estate market in the Central Valley region. Let's break down the data:

• Median Sold Price: In December, the median sold price of existing single-family homes in the Central Valley was $462,000. This reflects a decline from the November figure of $474,800.
• Sales Metrics: Despite the dip in median sold price, the sales metrics indicate resilience. The month-to-month change in sales saw a modest increase of 4.0%, showcasing stability in the market.
• Price Year-to-Year Change: The year-over-year change in median sold price for December 2023 was positive, standing at 5.5%. This indicates a healthy appreciation in property values over the twelve-month period.
• Sales Year-to-Year Change: While the month-to-month change in sales was positive, the year-over-year change showed a decline of 14.8%. This suggests a slowdown in sales compared to the previous year.

The Central Valley real estate market appears to be navigating a nuanced landscape. The slight decrease in median sold price from November, combined with a positive year-over-year change, underscores the dynamic nature of the market. The month-to-month increase in sales further indicates a level of resilience, although the year-over-year decline warrants attention.

For buyers, the current scenario in the Central Valley may present opportunities for negotiation, particularly with the month-to-month increase in sales. Sellers, on the other hand, should consider the positive year-over-year change in median sold price as a sign of long-term market appreciation.

Sacramento Single-Family Housing Market Data

Let's take a closer look at the key statistics provided by the Sacramento Association of REALTORS®.

Sales Volume:

November witnessed a 16.7% decrease in sales volume compared to October, with 697 closed sales, reflecting a significant shift in market dynamics. In a year-over-year comparison, there was an 11.2% decline from November 2022, signaling a shift in buyer activity. Notably, conventional financing dominated the market, accounting for 59.3% of sales, while cash and FHA constituted 19.8% and 13.6%, respectively.

Sales Price Fluctuations:

The median sales price experienced a 4.2% decrease from $548,000 to $525,000, indicating a shift in pricing trends. However, compared to November 2022, there was a 2.9% increase in the median sales price, reaching $510,000. This data emphasizes the importance of understanding the dynamic nature of the market, where prices can vary based on multiple factors.

Listing Inventory and Months of Inventory:

The listing inventory declined by 9.8% from October to November, dropping from 1,437 units to 1,296. In a year-over-year perspective, the inventory showed a substantial 30.7% decrease from November 2022 (1,871). The Months of Inventory, a key metric indicating the time it would take to deplete the current listing inventory at the current sales rate, increased from 1.7 to 1.9 months. This rise suggests a potential shift in the balance between supply and demand in the market.

Days on Market:

The median Days on Market (DOM) increased from 12 to 14, although it remained significantly lower than the 23 days recorded in November 2022. Of the 697 sales in November 2023, 74% were on the market for 30 days or less, while a substantial 91.1% spent 60 days or less on the market. These figures highlight the continued brisk pace of the Sacramento single-family housing market, with the majority of homes selling within a relatively short timeframe.

Sacramento Housing Market Forecast for 2024

The Sacramento housing market has experienced fluctuations over the past year, with changes in home values, market forecasts, and key market indicators. Let's explore the current state of the market and the forecast for the near future.

According to Zillow, the average home value in the Sacramento–Roseville–Arden-Arcade area stands at $555,739, experiencing a marginal decrease of 0.6% over the past year. Homes in this region typically go pending in around 18 days – a crucial metric that reflects the market's pace and demand.

Key Metrics as of December 31, 2023

• 1.5% 1-year Market Forecast: The market is projected to experience a moderate 1.5% growth by December 31, 2023.
• For Sale Inventory: As of December 31, 2023, there are 4,124 homes available for sale, providing options for potential buyers.
• New Listings: A total of 1,271 new listings have been added, contributing to the overall inventory.
• Median Sale to List Ratio: With a 1.000 ratio as of November 30, 2023, sellers are effectively fetching the listed prices for their properties.
• Median Sale Price: The median sale price, as of November 30, 2023, is $546,167.
• Median List Price: The median list price, recorded on December 31, 2023, is $598,667.
• Percent of Sales Over List Price: A notable 41.6% of sales surpass the list price, showcasing the competitive nature of the market.
• Percent of Sales Under List Price: Approximately 43.0% of sales are recorded under the list price, indicating room for negotiation.

Are Home Prices Dropping in Sacramento?

While the average home value has experienced a slight decrease of 0.6% over the past year, it does not necessarily indicate a widespread trend of dropping prices. The market remains dynamic, and fluctuations are common. It is advisable to monitor future trends for a more accurate assessment.

As of the current data and the 1.5% 1-year market forecast, there is no indication of an imminent housing market crash in Sacramento. However, real estate markets are influenced by various factors, and continuous monitoring is crucial for staying informed about any potential shifts.

Is Buying a House in Sacramento a Good Investment?

When considering whether buying a house in Sacramento is a good investment, it's crucial to examine various factors that contribute to the real estate market's attractiveness. Let's delve into the key aspects to help you make an informed decision.

Sacramento Rental Property Market

One of the key indicators of a strong real estate market is the demand for rental properties. In Sacramento, the rental property market has been robust, with a growing number of individuals and families looking for quality housing. This demand is driven by various factors, including the city's growing job market and its appeal as a place to live.

Investing in a rental property in Sacramento can provide a steady income stream, especially if you choose the right location and property type. It's essential to research neighborhoods and assess rental rates to ensure your investment is profitable.

Sacramento's Cost of Living & Quality of Life

Sacramento boasts a relatively lower cost of living compared to many other major California cities. This makes it an attractive destination for individuals and families looking for affordable housing options and a good quality of life.

The city offers a diverse range of amenities, including parks, cultural attractions, and a vibrant culinary scene. Sacramento's pleasant climate and proximity to outdoor recreational activities also contribute to its high quality of life.

These factors not only make it an attractive place to live but can also drive property value appreciation over time, enhancing the potential for a return on your investment.

Sacramento's Diverse Job Market & Economic Growth

Sacramento's job market has shown considerable growth in recent years. The city is home to a diverse range of industries, including healthcare, government, technology, and education. The presence of government agencies, such as the California State Government, further stabilizes the job market.

A strong and diverse job market can positively impact the demand for housing. Job opportunities attract professionals and families to the area, driving both rental and home purchase markets.

Population Growth of the Sacramento Metro Area

Population growth is a significant factor in the real estate market's health. The Sacramento metropolitan area has been experiencing steady population growth, driven by its economic opportunities and quality of life. An increasing population can lead to higher demand for housing, potentially driving property values upward.

Real Estate Appreciation Trends

One of the primary reasons why buying a house in Sacramento may be a good investment is the city's history of real estate appreciation. Over the past decade, Sacramento has experienced consistent and significant property value appreciation. This trend can be attributed to several factors, including an increase in demand for housing, a limited housing supply, and Sacramento's growing appeal as a desirable place to live.

Investors and homeowners who purchased properties in Sacramento a few years ago have witnessed substantial gains in their property values. While past performance does not guarantee future results, this trend is a positive indicator for potential real estate investors.

Investment Property Tax Benefits

Investing in real estate in Sacramento can offer tax benefits that make it an even more attractive investment. These benefits can include deductions for mortgage interest, property taxes, and depreciation. Be sure to consult with a tax advisor to understand how these deductions can positively impact your overall financial picture.

Resilience in Economic Downturns

During economic downturns, real estate in Sacramento has demonstrated resilience. While property values may experience fluctuations, the city's diversified economy and government stability have often shielded it from severe declines seen in other areas. This stability can provide a sense of security for investors concerned about economic uncertainties.

Other Factors

Other factors that contribute to the attractiveness of Sacramento's real estate market include:

• Transportation Infrastructure: Sacramento benefits from a well-developed transportation infrastructure, including highways and an international airport, making it accessible to residents and businesses.
• Education: The city is home to reputable educational institutions, including universities and colleges, making it an appealing location for students and academics.
• Cultural and Recreational Opportunities: Sacramento offers a rich cultural scene, with museums, theaters, and historic landmarks, providing diverse recreational opportunities for residents.

Consulting Real Estate Professionals

To make a well-informed decision, it's highly recommended to consult with real estate professionals who are knowledgeable about the Sacramento market. Real estate agents, appraisers, and property managers can provide insights into current market conditions, trends, and specific investment opportunities.

Housing Market California

The California Association of Realtors has forecast a significant increase in home sales next year of 22.9% to 327,100 units. And they predict a home price growth of 6.2% in 2024 to $860,300.

They believe the severity of the housing shortage will push prices up.  However, mortgage rates might fall a little in 2024, it likely won’t be enough to encourage homeowners to sell.

Homeowners may have to wait until 2025, before rates fall significantly and when that occurs, the California economy will surge and more buyers will be buying. Lofty home prices and high mortgage payments are the key stopping point and that in turn feeds higher rent prices which fuels inflation.

“With the economy expected to soften in 2024, the Federal Reserve Bank will begin loosening its monetary policy next year. Mortgage rates will trend down throughout 2024, and the average 30-year fixed rate mortgage could reach the mid-5% range by the end of next year,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine.

CAR’s data shows strong upward pressure on prices this year with active listings on the decline. High mortgage rates for longer means many homeowners will choose to avoid selling and face much higher mortgage payments, which are increasingly an issue for the inflation-weary.

House Price Growth in California all type. Screenshot courtesy of CAR.

Consistent with that theme, the August home sales report, perhaps surprisingly, reflects CAR’s suggested outlook for 2024. Homeowners are asking high, but now only 44% are receiving that price offer.

Home Prices Rise Again in August

Home prices in California rose again in August, the biggest increase in 14 months. Single family home prices rose 3.3% while sales dropped by 5.3% vs July.

The Bay Area, infamous for high home prices and stiff competition for housing, is unique in California’s housing landscape. Of course, it’s relatively expensive and difficult to be a homebuyer almost anywhere in California, but these complications are multiplied exponentially in the Bay Area, leading to what many have deemed a housing crisis.

But have high home prices and competition finally reached their tipping point? Signs across the Bay Area point to: yes.

The Bay Area’s housing market is cooling in more ways than one, according to a recent Trulia report.

The average days on market has increased across the Bay Area in 2018. This increase has been most significant in the:

• Napa neighborhoods:
  • Springwood Estates, from 57 days on market in 2017 to 79 days in 2018;
  • Fuller Park, from 66 days on market in 2017 to 83 days in 2018;
  • Westwood, from 44 days on market in 2017 to 55 days in 2018;
• San Francisco neighborhoods:
  • Russian Hill, from 45 days on market in 2017 to 56 days in 2018;
  • Telegraph Hill, from 46 days on market in 2017 to 57 days in 2018;
• Richmond neighborhoods:
  • Hilltop Green, from 49 days on market in 2017 to 60 days in 2018;
  • Coronado, from 59 days on market in 2017 to 67 days in 2018; and
• Mill Valley neighborhood, Cascade Canyon, from 75 days on market in 2017 to 97 days in 2018.

As homes have sat longer on the market, the share of listings receiving a price cut has also increased in cities across the Bay Area, including in the:

• Richmond neighborhoods:
  • Southwest Annex, from 4.9% of listings in 2017 to 28.0% in 2018;
  • Atchison Village, from 7.7% of listings in 2017 to 19.2% in 2018;
  • Santa Fe, from 1.6% of listings in 2017 to 11.6% in 2018;
• Napa neighborhoods:
  • Sheveland Ranch, from 6.1% of listings in 2017 to 24.6% in 2018;
  • Shurtleff, from 12.6% of listings in 2017 to 23.8% in 2018;
• Oakland neighborhoods:
  • Rancho San Antonio, from 2.2% of listings in 2017 to 17.4% in 2018;
  • Toler Heights, from 2.2% of listings in 2017 to 14.7% in 2018; and
• San Rafael neighborhood, Glenwood, from 4.7% of listings in 2017 to 17.3% in 2018.

Prices to follow next

After nearly seven years of consistently rising home prices and competition for limited inventory, Bay Area homebuyers are finally beginning to see some relief. But for sellers and real estate professionals, a slower market can be problematic.

As homes have begun to sit longer and more price cuts have occurred, home prices are starting to decline. In fact, mid-tier prices in San Francisco have experienced a decline each month since June 2018.

This may be news to our readers, as most media reports choose to focus on annual gains — after all, prices can be volatile on a month-to-month basis, and mid-tier home prices are still 9% above a year earlier in San Francisco due to gains experienced earlier in the year. But first tuesday is confident that the decline in home prices in the latter half of 2018 is only the start of a longer trend.

This forecast is based on three criteria:

• home sales volume is declining across the state, contributing to longer days on market and more price cuts;
• mortgage interest rates are increasing, decreasing buyer purchasing power and discouraging homebuyers; and
• the economic indicator, the yield spread, is quickly approaching zero, indicating an economic recession is imminent 12 months hence, likely in 2020.

What are real estate professionals to do with this information?

Armed with knowledge of a coming slowdown, real estate professionals can prepare today by:

• increasing marketing efforts to homebuyers, who will have the most to gain in the coming buyer’s market;
• expanding their skillset by becoming a broker, short sale specialist or property manager to increase their profits;
• partnering with like-minded individuals to invest in property once the recession takes hold and prices have hit their bottom; and
• saving their earnings for the rainy days ahead.