As states are beginning to reopen from the COVID-19 lockdown, there is still a lot of confusion for everyone about what will happen next in the housing market. Many people are searching for answers on the Sacramento housing market and if it will crash, if it’s a safe investment to buy a home, and if it’s a good idea to sell a home right now.
Let’s look at what we know and what a few experts have to say about it.
The housing outlook for Sacramento in 2020
We left 2019 on a slightly optimistic note with the economy, so naturally in the beginning of 2020 it was expected that things would continue along with high consumer spending, and increasing home prices. Back in the beginning of the year, real estate forecasters were expecting home prices to continue to keep going up. Now that it is May, real estate forecasters believe that prices are only expected to go up by .8% overall in the U.S. In the Sacramento area, it is expected to go up by .5%.
In the Sacramento area, there were about 700 fewer home sales this April than there were in April of 2019, but with the Coronavirus pandemic going on that was to be expected. Even so, potential home buyers have still been applying for homes during quarantine. Once it’s deemed to be safe enough to do business in person again, the home sales numbers are expected to rise especially during the month or two following the release from lockdown.
Due to the yield curve, or how things are going in the market right now, people are still applying for and buying homes.
Is a low inventory good for homebuyers?
In real estate, low inventory means that there are not enough houses available on the market to meet home buyers’ demand. It’s a good situation for sellers as they have more control over the market. For someone looking to buy a home, it makes it harder to buy as you’re competing with other buyers over fewer homes to choose from.
There is a shortage of homes for sale, as nervous sellers have taken their homes off of the market during the lockdown. Home prices had been gradually going up, but with the recent economic events, home prices are expected to flatten out soon which will be good for buyers.
If you’re looking to buy a house right now, go over your options with your Realtor to find the best home for you. Now is the time to be more creative when considering what to do when buying during a seller’s market. See if you can put in a lower asking price on a home that’s been on the market for a long time. Or consider buying a fixer-upper if you find a home with potential in a neighborhood you like.
Will millennials save the home buying market?
Millennials who have submitted housing applications during the lockdown may be the key to bringing the real estate market back into a buyer’s market. 4.8 million Millennials are hitting age 30 this year, which means that they are at a prime home-buying age. It’s expected that soon 50% of home purchase mortgages will be taken by millennials.
Millennials are mostly looking for affordable single family homes in good school districts, within driving distance from their workplaces. As this generation is getting older, and possibly due to the pandemic, they are looking for homes in suburb areas near cities instead of within the cities themselves now.
Although no one can know for sure what will happen, it does not look like there will be a housing market crash here in the Sacramento area. There are still plenty of buyers looking for homes and there are still homes on the market waiting to be sold. As consumer confidence picks back up, more sellers that had taken their homes off of the market during the lockdown will likely put the houses back on the market soon.
If you’re looking to buy a home in the Roseville, California and surrounding Placer County area, call us at Quantum Real Estate. We’re here to help you navigate the home buying process and help you decide the best option for you.