SACRAMENTO, Calif. (KTXL) — As the exodus from the Bay Area to Sacramento continues, local realtors and appraisers are scrambling to keep up with the fluctuating demand from homebuyers.
As a result of the COVID-19 pandemic, the Sacramento area is now a seller’s market, meaning there are a lot of homebuyers but a limited inventory. That has created an unprecedented and challenging housing market for both realtors and potential homeowners.
Navigating major booms in the housing market is not an unfamiliar task for El Dorado Hills realtor Melissa Quade, who experienced it while working in Seattle 10 years ago.
“I saw prices rise exponentially when I was in that market, and now I’m seeing it here, too,” Quade told FOX40.
But COVID-19 has created a unique situation for Quade and other realtors in the Sacramento and Bay areas.
A recent CBRE research study showed the migration from densely populated and pricey areas rose tremendously. Case in point: Moves from San Francisco to Sacramento County went up 70%.
“The buyers are out there in full force,” Quade explained. “A lot moving from the Bay Area. They don’t have to live there anymore because they can work remotely, so they’re coming here where you can get a lot more for your money.”
The issue right now, however, is sellers are in short supply.
“In El Dorado County, here where I am, we have 75% fewer listings than last year,” Quade said.
Quade added that creates frustrations for prospective homebuyers “not just because they don’t have the cash that the Bay Area buyer do but just because things are being done very, very differently now and the buyers are having to take on a lot more risk.”
According to Quade, the median sales price in the Sacramento region, which encompasses Sacramento, Placer, El Dorado and Yolo counties, has gone up over 20% between March 2020 and March 2021. Since January of this year, the market has shot up 9% and is on track to keep rising.
“We haven’t seen this kind of shortage of inventory in any recent history and we haven’t seen this many buyers out here and it’s just creating a frenzy,” Quade said.
There’s also the gap between appraised value and actual market value for houses, which is what appraiser and market analyst Ryan Lundquist is finding difficult as well.
“Our median price in January was $485,000 and it’s about $530,000 just a few months later now,” Lundquist said. “And so we’ve really seen very, very quick growth.”
Out of the 30 largest metro areas in the U.S., Sacramento is ranked number one in terms of net move-ins, which are mostly from San Francisco.
And while it may seem daunting, Sacramento’s housing market presents a lot of opportunity.
“We actually had a high sales volume happening for 10 months in a row,” Lundquist told FOX40. “Buyers are pulling the trigger on what’s out there … so we’ve actually been able to achieve numbers that are higher than 2019 and 2020.”
“It was a seller’s market here for a long time but not like this,” Quade said.
Quade’s advice for first-time Sacramento homebuyers is simple: be patient, be ready to compete, negotiate terms and focus on houses that have been on the market for at least more than a week.
Lundquist said there is good news for buyers: Listings are on the rise within the region and for three weeks in a row, there has been a national decline in mortgage applications. That means less competition.
It’s not all bad news for local real estate. In fact, Quade said this is the best time to sell. The only thing is a seller’s best bet would be to find a new home out of state.
Lundquist also offered advice for sellers: don’t be overzealous and scare off potential buyers.
“Even though buyers are hungry, they’re not so overly desperate where they’ll pay literally anything for any price, for any home,” he said.