Houses in the Greater Sacramento area have been selling left and right for months, but new data from the Sacramento Association of Realtors shows things have slowed down.

According to the statistics from this past July, there was an 8.6% decrease in sales from June. Median sales prices also dropped almost 2% from $520,000 to $510,000.

The data also shows that July’s bidding-war rate was the lowest since January, according to Redfin, a technology-powered real estate broker.

These recent headlines have many buyers and sellers wondering if the market will finally cool down this fall?!

ARE WE HEADED FOR A CRASH?

While we are seeing a bit of slowdown, this is 100% normal for the late summer/fall months. Typically as the kids head back to school and people wrap up their summer travel plans the market shifts a bit.  Although real estate took off and has not slowed own since fall 2020, this is not the norm. The market is still extremely competitive, homeowners have a lot of equity, inventory is limited and mortgage rates are extremely low, which are all factors that will prevent the market from a crash in the near future.  Even if things do cool a bit over the coming months, homes are expected to continue to appreciate through the rest of the year and we are still very much in a seller’s market.

BUT PEOPLE SAID THE SAME THINGS BEFORE THE 2008 CRASH, RIGHT? 

Here’s the difference: financially, we’re in a very different place. The root cause of the 2008 crash was bad lending practices, such as offering predatory subprime mortgage products. Since then, the federal government has put stricter lending regulations in place, and lenders are doing more due diligence to make sure they lend to qualified buyers. 

When forbearance and foreclosure protections end, it’s possible that we’ll see another flood of foreclosures on the market like we did in 2008. However, with the number of qualified homebuyers on the market, it’s likely that any foreclosed homes will sell quickly. 

WHAT DOES THIS MEAN FOR BUYERS?

Bring your A game if you want to buy the home of your dreams this year. Although you may only be competing with 5-6 other offers this fall (instead of 25), you will still be up against some competition. But don’t worry—there’s a bright side for buyers too.

If you’re getting a mortgage, rates are still looking as good. In 2021, the annual average interest rate for a 15-year, fixed-rate mortgage hit an all-time low at 2.29%.21 The way things are looking, rates seem like they’ll stay pretty low through the end of the year and into 2022.

That means you’ll probably still have a good chance of locking in a lower-than-average mortgage rate. And for the record, lower rates are a good thing because they mean a lower monthly payment and less of your money going toward interest over the life of the loan. Woo-hoo!

WHAT DOES THIS MEAN FOR SELLERS?

Sellers out there can feel pretty good about the rest of 2021. If that’s you, you might want to put your house on the market sooner rather than later while inventory is still low. There are plenty of buyers out there, but experts are predicting more people will sell within the next year, meaning you’ll have more competition.

If you work with an experienced agent, you’ll be able to capitalize on home prices, navigate multiple offers, and find the right buyer. With an expert by your side, you should have no problem selling your house at a great price this year

For more information on the current Sacramento housing market, contact our award-winning team!

916-801-1105