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It’s been four years, and there is NO equity

December 9, 2025 By Ryan Lundquist 8 Comments

Home values go up by 5% each year, right? So, if you bought in 2021, you should have 20% equity by now. Yet, I just saw a listing get pulled because it couldn’t sell at what the buyer paid in the fall of 2021. Let’s talk about this dynamic.

UPCOMING SPEAKING GIGS:

12/10/25 SAFE Credit Union (sold out)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

And yes, this is a Twilight meme. Sorry. Cancel me if needed.

HOW CAN THERE BE NO EQUITY IN FOUR YEARS?

Lots of people say things like, “on average, the market goes up 4-5% per year,” but the truth is recent years haven’t been average. When looking at the past several years, it’s been pretty flat with modest appreciation at best. There are multiple times in the past where the median sales price is exactly the same as today. This is why someone who bought a few years ago might actually have a similar value to today (or lower or higher depending on when they bought).

Sacramento County:

Placer County:

PLEASE DON’T BE RIGID ABOUT THE MEDIAN

The median sales price presents a pretty decent picture of the shape prices have taken in recent years, but not every neighborhood or price range is going to have this exact shape. In fact, the higher end probably has more equity since 2021 because that part of the market has tended to outpace the median trend. As always, look to the comps, and don’t rigidly impose any price metric on every single property.

HOW MUCH HAVE PRICE DROPPED SINCE 2022?

The median sales price is down 8% in the region from mid-2022, and Zillow’s price index for Sacramento is down 7.3% (their stats only go through October). This seems about right when pulling comps in many areas, and I think it’s a good general statement to say prices are down about 7-8% from the peak. Yet, don’t be rigid about applying this to every home and neighborhood either because these figures can’t possibly apply the same to every single parcel at once.

NOW LET’S DO A BIG MARKET UPDATE

For anyone interested, here are some market thoughts. Skim quickly or digest slowly. If you’re not in Sacramento, you might pick up some language for your area. Many locations around the country are having a similar vibe, and it’s all about continuing to discover ways to unpack what is happening.

SOME LANGUAGE TO DESCRIBE THE TREND

The market is soft, but it’s not as soft as it was. The good stuff goes very quickly as about 25% of recent pendings are in contract within two weeks, but so many listings are just lingering if overpriced. I find it’s either multiple offers or crickets. We’ve seen softening this fall season as we normally do, but we also have a weird dynamic with sellers retreating. It’s taking about two weeks longer to sell compared to last year, and prices are down close to 3% from last fall. More stats coming this week.

WHAT THE HECK IS HAPPENING WITH SELLERS?

This year started with great news of 20% more new listings hitting the market for the first four months of the year. The trend was clear. Sellers were continuing to thaw out. But then sellers began backing off due to increased economic uncertainty. Ever since April, we’ve seen dropping seller participation, and it’s become quite blatant lately. To be fair, some of this could be about sellers not being able to get the price they want, but this trend began before we had much news about negative price change, so I’m inclined to say this is more about economic uncertainty. The number of new listings has actually been lower than 2024 for four months in a row now. Yikes!!! This hasn’t made the market ultra-competitive again, but it has slowed the softness.

SACRAMENTO IS NOT A SH*THOLE

Someone on X told me that sellers are backing off the market because Sacramento is a sh*thole. Honestly, this doesn’t even make sense. If Sacramento was a sh*thole, it seems like we’d be seeing sellers running for the exits, right? Backing up, sellers are retreating nationally in so many areas around the country, so this isn’t a Sacramento-specific trend. Here are new listings in the United States from Redfin data. Do you see how there was more space between 2024 and 2025 at the beginning of the year? And now there’s not.

WHAT THE? 10% MORE ACTIVE LISTINGS INSTEAD OF 50%

How many homes are actually listed for sale? This year began with 45% to 50% growth in the number of active listings, and we were really feeling the difference. But here we are now with only 9.5% more from one year ago. The x-factor for shrinkage is sellers stepping back (and sellers pulling homes from the market too). Look, supply has still outpaced demand this year, but the market doesn’t feel as soft as it did earlier in the year. This isn’t just about seasonal slowing either. We’ve seen a legit change in seller behavior.

2025 ISN’T REALLY LIKE ANY YEAR IN THE PAST

Here’s a helpful way to describe the housing trend right now. What is the 2025 market like? Well, it’s not 2021. It’s not 2007. And it’s now softer than the norm in 2019. In short, 2025 is sort of its own thing. There isn’t one year in the past that perfectly represents the trend.

BE CAREFUL ABOUT A PING-PONG HOUSING NARRATIVE

I’m trying not to beat the dead horse, but median price stats can bounce around, particularly in smaller counties. This why real estate professionals need to be more thoughtful about price stats today. My advice? Pay closer attention to the largest local county (Sacramento), and also watch other data source such as Zillow, Homes dot com, etc… Ultimately, be careful about being rigid with median change. In other words, if you’re unbending about median change from month to month, especially in smaller areas, you’re going to sound manic like a game of ping-pong. “Prices are up. Just kidding, they’re down. No, they’re flat. They’re down again…”

SOME RECAP STATS

I normally push out stats for ten counties, but I can’t swing that this week since deadlines are insane. For now, I have the region and two larger immediate counties. I’ll likely push out other counties soon. Stay tuned.

YEAR-OVER-YEAR:

MONTH-TO-MONTH

Thanks for being here. I hope this was helpful.

LEAVING COMMENTS: The captcha is not working perfectly. If you open up a new browser, that should solve the issue. It’s been a problem to comment when clicking from my weekly email. My apologies.

Questions: Have you run into situations where price look like they’re basically the same as four years ago? Or down?

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The problem with comps in 2026 (and the good news)

December 3, 2025 By Ryan Lundquist 8 Comments

We have a problem with comps in real estate. There just aren’t that many, and it’s made it much more challenging to figure out value. Yet, this could get a little better in 2026. Let’s talk about it.

LAST MARKET UPDATE IN 2025 IS NEXT WEEK:

I’m doing my last market update of the year. This is a free and catered Realtor lunch & learn thanks to SAFE Credit Union. There is SO much to talk about. I want everyone to leave energized for 2026. Please RSVP here.

UPCOMING SPEAKING GIGS:

12/9/25 Downtown Regional MLS Meeting Q&A
12/10/25 SAFE Credit Union (RSVP here)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

WE’VE HAD A COMP PROBLEM FOR THREE YEARS:

We’ve been missing about 30% of the normal number of sales. This is true both locally and nationally. This chart from Calculated Risk shows the gravity of the situation as we’ve been flirting with historically low volume for three years now. And what this means is we’ve had 30% less comps to choose from. Yikes!! This is exactly why it’s been challenging to value properties. Here’s a post with comp tips in the midst of limited sales.

THE GOOD NEWS

It seems like many housing data sources are projecting stronger volume next year in light of the perception of lower mortgage rates ahead. In fact, NAR is predicting a 14% increase in the number of sales. My projection locally is we’re going to get more volume, though 14% seems optimistic (I hope I’m wrong). Ultimately, the positive here is there are likely going to be more comps to choose from in 2026.

THE BAD NEWS

We’re still poised to have historically low volume until there is a sharper change with affordability. The housing market simply feels stuck, and there isn’t a mechanism to quickly increase the number of buyers. In other words, it’s not going to be a market with robust volume for a long time since it’s going to take years to get buyers and sellers back. Yet, if the projection is correct about next year, it’s going to be something positive to get even a little more volume back. This isn’t standing ovation news, but maybe a golf clap is in order. And for my real estate friends, this is a solid reminder to stay focused.

SOMEONE WAS MAD AT ME FOR USING OLD COMPS

I had someone angry with me recently that I used much older sales as comps in a private appraisal. I tried to explain my rationale, but the person wasn’t willing to listen. Here’s the deal though. If there aren’t any recent comps, then we have two choices. Use older sales and adjust for how the market has changed, or go out further into other markets for more recent sales (doable, but not always ideal). In real estate textbooks, this issue doesn’t come up since there are always three model match sales over the past 90 days, but the real world is different. The truth is valuations today look a bit messy since we don’t have the luxury of ample recent sales. We simply have to do the best with what we have. Remember, when the market changes, how we do things sometimes has to change also.

OLDER COMPS AREN’T ALWAYS BAD COMPS

When looking at price movement, it’s not always bad to use older sales anyway since prices have been pretty flat for a few years now. There are times when I use a sale that needs a downward adjustment since the market has softened a bit, but other times I might select a sale from a couple years ago that doesn’t need any adjustment since the market is basically willing to pay the same price right now. I’m going to talk about this more soon, especially since there are some people who purchased four years ago with very minimal equity (or sometimes none).

Thanks for being here. I hope this was helpful.

Questions: What are you doing for comps these days? Do you prefer to use older sales or go further out into other neighborhoods?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Pass the turkey to the guy talking about home prices

November 25, 2025 By Ryan Lundquist 13 Comments

Half the homes in the country lost value since last year. This is a big headline from Zillow, and I want to unpack that today before the holiday officially comes. I think it’s important in real estate to understand what people are saying about the market.

UPCOMING SPEAKING GIGS:

12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

HOUSING CONVERSATION AT THE DINNER TABLE

I don’t recommend it, but if conversation isn’t spicy enough on Thursday while you’re with your people, here are some housing topics to bring up. Which one would rile up grandpa the most? Haha.

In all seriousness, I hope you deepen relationships this week. May you be filled with deep joy regardless of your circumstances.

ZILLOW’S SENSATIONAL HEADLINE

Zillow published a piece last week stating 53% of homes in the United States lost value over the past year, and it’s gone viral online. What really caught my eye was the locations with the most losses. Check out Sacramento ranking third on the list with 88% of homes said to have lost value – only behind Denver and Austin. I’m not surprised to see Sacramento make the cut since I’ve been talking about softer prices for many months now. But it’s also easy to get sensational with this headline because it sounds worse than actual market change.

If you’re in one of these top markets, what do you think of these stats?

ACTUAL VALUE DECLINES AREN’T SENSATIONAL

In short, 88% of homes losing value sounds really big, but how much did prices actually go down? Well, Zillow’s price index for Sacramento is down 2.3% from one year ago, and traditional metrics are hovering somewhere around that level depending on the month (they’re bouncing around). I like to say it’s been a slow burn for price change despite glaring affordability issues. Supply just hasn’t built enough to create quick change. I’m not sugarcoating here. I’m only pointing out the 88% headline sounds way more sensational than actual market change. All that said, a positive here is affordability has improved slightly for buyers. This isn’t a major change, but a little relief is welcome.

By the way, I’m not saying Zillow’s numbers are perfect for Sacramento either, though their numbers have been pretty reasonable so far compared to other metrics I’m watching. I’ll keep reporting on many different metrics to help us have a wide view of the trend. I’m also not a Zestimate fanboy, but it’s interesting to consider what percentage of Zestimates have dropped below last year as shown above.

A BIG THANK YOU

Thank you so much for this year. I am beyond grateful for the relationship we’ve built and the business we’ve done together. Thank you for your continual support. I know this has been a tough time in real estate for so many over the past few years, so I don’t take it for granted that I’m surrounded by amazing people who have blessed my life and business.

Thanks for being here. I hope this was helpful.

Questions: Which housing topic are you bringing up at Thanksgiving? And does anyone else feel like turkey is overrated?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Is it still a bedroom if the closet is removed?

November 20, 2025 By Ryan Lundquist 32 Comments

If the owner removes the closet, can it still be counted as a bedroom? I’ve had this question a few times this month, so let’s talk about it. I’ve written before about closets and the definition of a bedroom, but today I want to just focus on eliminating the closet. I’d love to hear your take in the comments.

UPCOMING SPEAKING GIGS:

IS IT STILL A BEDROOM IF THE CLOSET IS REMOVED?

This can be a tricky question because there are so many different scenarios, and each situation might not perfectly fit my answer. In short, if all an owner does is remove a closet, I lean toward saying it is still a bedroom. Let’s be logical. Imagine if you had a four-bedroom home and took out the closets. Is it now a zero-bedroom home? Absolutely not. That sounds absurd because it still has four rooms intended as bedrooms. Yet, it does now have some functional issues since buyers walk through thinking, “Where the heck are the closets?” We just wouldn’t go so far as to say bedrooms no longer exist, right?

If the cost-to-cure is minimal to add a closet, let’s not overthink this issue because it’s unlikely that buyers would deduct a significant amount in value when the cost-to-cure is so small. What we don’t want to do is get so caught up on a closet technicality that we fail to think logically. So, if we now compare a three-bedroom home to two-bedroom comps, we could be choosing the wrong comps and missing the way buyers actually perceive the home. Don’t get me wrong. There could be a big difference in value sometimes between a two-bedroom and three-bedroom home, but if the only difference is literally a closet, that’s not the same thing as comparing a three-bedroom and a traditional two-bedroom that doesn’t have any extra bedroom potential. However, if an owner removes a closet by expanding an adjacent bathroom into that space, there could be a functional problem in an older home with smaller rooms already. This is where it can get weird if adding a closet would mean the bedroom is now tiny, so I get when real estate professionals use good professional judgement at times when deciding if an area is a bedroom or not.

Ultimately, many people say closets are required because that’s what they’ve always been told, but there really isn’t an overarching rule that says so. However, it’s likely the market requires them (or local code). So, on one hand we don’t want to minimize the importance of a closet because it’s normative and expected among buyers. On the other hand, let’s not go to the extreme of being unable to think like buyers who would use logic and find the path of least resistance by spending a minor amount of money to add a closet.

All that said, I wouldn’t split hairs if a colleague wanted to call it something else besides a bedroom because this feels like a gray area where there is room for interpretation. In real estate, we often want things to be black and white and clearly defined, but that’s not always possible. I think the most important issue here is that we’re considering comps with the same room count and functionality (and not being too rigid about removing a closet). No matter what, it’s really important in appraisals and real estate listings to explain what is at the house and be as clear as possible.

Here’s a reel I made on Instagram to talk about this post.

View this post on Instagram

A post shared by Ryan Lundquist (@sacappraiser)

ADVICE TO OWNERS

Don’t remove closets. It makes it awkward, and in today’s market buyers are very picky about everything. If a home has too many oddities, it creates roadblocks for buyers to say yes. Look, do whatever you want. It’s your palace. I’m just saying keeping the closets is a good move. On a related note, people sometimes convert a three-bedroom home into a two-bedroom home by combining bedrooms. That’s not something I advise either from a resale perspective (but do as you wish).

WHAT ABOUT A BUILDER DEN OPTION?

If a home was built with a den, can we consider that a bedroom? Well, we just called it a den, and that signifies it’s something else besides a bedroom. That’s sort of like when someone wants to include a Sun Room as square footage. Bro, you just called it a Sun Room, which tells me it’s something else and probably not square footage. Anyway, the den option almost feels like a bedroom because it has space for a closet and a window to the exterior, but being open to the rest of the house with no privacy makes it a den instead of a bedroom. In this situation, buyers might recognize the potential to convert the area to a bedroom, but it’s also not as cheap as adding a closet since now we have to build an entire wall including a door. In short, I definitely wouldn’t count a den as a bedroom with a situation like this because it doesn’t feel like a bedroom (and buyers wouldn’t call it a bedroom).

EWW, YOU SOUND SO SUBJECTIVE TODAY

I realize my post today feels a bit subjective, but this is what it’s like in the trenches of real estate where we have to use good professional judgement and make subjective calls supported by reason and market perception. I find it’s easy to want to impose one rigid definition on every property, but that just doesn’t work.

DON’T GET TALKED INTO SAYING IT’S A BEDROOM

One final thing. Be careful about being talked into considering an area as a bedroom when the space clearly doesn’t feel like a bedroom or meet the general requirements. At times, sellers will add a closet to an attic and say it’s a bedroom, but it really isn’t permitted square footage. Or imagine an owner converts a den to a full bedroom, but the septic tank is not big enough for an extra bedroom (yikes). Or an owner might add a closet to an office in the interior of the layout, but it doesn’t work as a bedroom since a bedroom needs direct egress to the exterior of the house.

Thanks for being here. I hope this was helpful.

Questions: How would you answer this question? Is there anything I missed?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

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