Our local Sacramento housing market continues to be a leader in price increases.
Although Sacramento has slipped from last month to number two nationally, our prices for June increased 34.4 percent from a year ago. Oakland was higher with a year-over-year median list price increase of 36.8 percent.
Rounding out the top five were:
- Oakland: +36.8% at $492,250
- Sacramento: +34.4% at $289,000
- Orange County: +31.7% at $565,000
- Detroit: +31.31% at $130,000
- Stockton-Lodi: +31.30% at $209,950
Historically, home prices have typically increased 3 to 4 percent annually but during the years preceding the housing market crash we were experiencing average national growth as high as 12 percent. In our local Sacramento market it was even higher.
The upward pressure on price is being driven by low Inventories of homes ‘for sale’ and increasing demand. According to Lawrence Yun, economist for the National Association of Realtors, ‘The greatest concern in the market is the inventory situation and even if we see an increase in the spring and summer, if home sales hold at the [current] level or even a 5- to 6-month supply, price increases are guaranteed. We don’t want to see rapid appreciation in prices faster than income.”
A healthy and sustainable housing market is supported by employment and increasing income. Price increases caused by low inventory can lead to a bubble situation where rapid decline is possible.
For Sacramento homeowners the price increases over the past six months have been comforting as some of the value lost over the past 7-years has returned but we now want to be in an economy which is growing and supporting home values and not outpacing income.
If you have any questions about buying or selling a home in the current market, feel free to reach out to me at the MagnumOne Realty Office in Roseville at (916) 899-6571 by email to [email protected]. I would be happy to answer your questions.
We specialize serving the needs of buyers and sellers of homes in the Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.