Rising California Homes Prices to Break 2007 Record High

It is only a matter of time before our rising California home prices will reach our record high set in 2007, says C.A.R. Chief Economist Leslie Appleton-Young. In fact, Appleton-Young says our homes prices will surpass that pinnacle during the next 3 to 5 years. We are still sitting with low inventory and fewer numbers of buyers who can afford to buy a home. According to C.A.R., almost 3 out 4 buyers cannot afford to buy a home in California. That’s staggering to think about. Not to mention, any little jump in interest rates could further dampen enthusiasm to buy a home in Sacramento.

I was thinking about this news last night when a client who moved to Colorado called me. I had recently sold her mother’s condo at Riva on the River, followed a few years later by selling her own home in West Sacramento. This seller wasn’t planning to buy a home in Colorado right away. But like most people who make the transition from buying to renting, buying another home was never far from her mind. You get that bug. She admitted to tapping into Zillow and Realtor.com to view homes for sale. Then one day, out riding bikes with her husband, they stumbled upon a neighborhood and said, hey, we could live here.

Sure enough, they found a home for sale, very similar to the home she left behind in West Sacramento. Except this is their house on steroids. More than twice the square footage. The market in Colorado is still crazy, bidding wars, multiple offers, says my Realtor friend in Denver, Joan Cox. My fingers are crossed that their offer gets accepted. My former client and her family should be in their new home by Thanksgiving.

All of this might lead you to wondering if rising California homes prices will keep you out of the marketplace. Not if you don’t let it. Not if you act within the next year or so. This is a great time to buy as rates are still super low, hovering around 3.875% to 4%, depending on the type of loan you get. The market won’t crash because too many buyers pay cash and others who finance are extremely well qualified with strong down payments. I had hoped we were headed toward stabilization. That would be a calming influence in Sacramento real estate. But not predicted to happen.

In Sacramento County, our highest median price for single-family homes was $395,000 in August of 2005. That was also the month I recall the phones had stopped ringing. The merry-go-round was over. As of September, 2017, our median price for single-family homes in Sacramento is $348,000. Sacramento was among the first affected in California. Our rock bottom was the summer of 2011. Hopefully, we will be among the first to taper off.

The prediction for California overall is 3 to 5 years. However, I predict at the rate we are moving, we’ll see Sacramento meet our high of 2005 in only 1 to 3 years.

We still have a lot of buyers who deserve to own a home in Sacramento. If you’d like more information or help with Sacramento real estate, please call top Sacramento Realtor Elizabeth Weintraub at 916.233.6759. I answer my phone. Put 43 years of experience to work for you.