Sacramento Appraisal Blog

Market trends and real estate appraisals for divorce, estate settlement, loans, property tax appeal, pre-listing and more. We cover Sacramento, Placer and Yolo County. We're professional, courteous and timely.

When concessions stop working

By 6 Comments

Concessions are a tractor beam to entice buyers. Until they’re not. At some point they simply stop working, and prices have to be lowered. Let’s talk about this, and I have some new visuals to show which price points are growing and shrinking.

FIVE BEERS ON ME TONIGHT

I’m recording a live podcast in Downtown Sacramento tonight from 6:30-7:30pm. Want to join the audience? It’s at a brewery, and I’d like to buy a beer (or NA drink) for five people who come.

UPCOMING SPEAKING GIGS:

4/16/25 Enlightenment Podcast (live event)
4/18/25 Prime Real Estate (private)
4/24/25 KW EDH (register here)
4/28/25 Socotra Capital (Zoom)
4/30/25 Anthony James Office Meeting (private)
5/8/25 Empire Home Loans (details TBA)
5/13/25 PCAR
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
6/12/25 Realtist of Sacramento
9/26/25 PCAR
11/4/25 SAR Main Meeting

HAVE CONCESSIONS STOPPED WORKING?

New home sales have been lackluster for two months in a row in the Sacramento region, so concessions just aren’t doing what they used to do to attract buyers. And I get it. Between higher rates and economic uncertainty, some prospective buyers are on the sidelines. When looking at both February and March sales volume, it’s been a low couple of months. While it’s not awful volume, it’s a clear departure from the glowing trend in recent years. This is going to be interesting to watch ahead, and what happens with consumer sentiment and rates will play a huge role.

DROP THE PRICE IF NEEDED

A couple months ago I wrote about the housing market’s purple pill. The dream is to keep the price high while offering a credit, but buyers are extremely picky today about price, so they may want a reduction AND a credit. In other words, take the purple pill (combined red and blue). This goes for new homes and the resale market. Drop the price if needed.

GIVING MORE INCENTIVES IN 2025

This is just one builder, but Lennar is one of the largest builders in the country. We’ve seen a higher dollar amount of incentives in 2025 compared to 2024. Image from JBREC. Interesting data, right?

NO LONGER A CAPTIVE AUDIENCE

New construction has had a captive audience since sellers stepped back from the resale market, but we’re starting to see more sellers come back, so buyers have more selection. This means new construction simply doesn’t have as much attention.

ONE THING TO WATCH

If builders do lower their prices, that could affect what consumers are willing to pay for nearby homes in the resale market. The rationale becomes, “Why would I pay X amount for something old when I can get a brand new home for less?” This is something to watch. It won’t affect every single neighborhood, but one of the hardest homes to sell right now is one that is just a couple of years old because it’s very challenging to compete with the incentives offered in brand-new construction.

BUYERS, KEEP YOUR ANTENNAS UP

Keep your antennas up with builder incentives and prices. There could be some better deals out there for you if economic uncertainty persists (and rates remain higher). And no pressure from me to buy. Do whatever you want.

EXAMPLE OF INCENTIVES FROM A LOCAL BUILDER

I spotted this on Instagram yesterday. If you have other examples, I’d love to see. Please email me anytime.

WHERE IS VOLUME GROWING AND SHRINKING?

Where is the market moving? I have ten counties of data today. I’m hopeful these images will be useful to tell the local real estate story and even consider where to focus business. The first image shows what is happening in various price ranges from last year to this year. The second visual helps us see the percentage each price segment represents. For instance, in Sacramento County, 1.4% of all sales sold above $1.5M in Q1. 

I hope this was helpful. Thanks for being here.

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: What are you seeing with new construction lately? What are you hearing from buyers and sellers?

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

Tariffs don’t bother Chuck Norris & spring housing vibes

By 6 Comments

We’re seeing the spring market unfold, but it’s also been a more subdued spring. I have lots of fresh stats today and some thoughts on the stock market vs real estate, declining condo prices, Chuck Norris, and cancellations. I hope this is helpful.

An AI-generated image of Chuck Norris in a suit in front of a house. He is holding a sign that says, "free pizza with full price offer."

UPCOMING SPEAKING GIGS:

4/10/25 Yuba-Sutter Association (register here)
4/15/25 Culbertson and Gray (private I think)
4/16/25 Enlightenment Podcast (live event)
4/18/25 Prime Real Estate (private)
4/24/25 KW EDH (private I think)
4/28/25 Socotra Capital (Zoom)
4/30/25 Anthony James Office Meeting (private)
5/8/25 Empire Home Loans (details TBA)
5/13/25 PCAR
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
6/12/25 Realtist of Sacramento
9/26/25 PCAR
11/4/25 SAR Main Meeting

TARIFFS DON’T BOTHER CHUCK NORRIS

We’re seeing an impact from tariffs on the stock market, consumer confidence, and it’s to be determined what happens to the job market and economy. The x-factor here is whether tariffs are going to be lasting or not. The sentiment last week was tariffs would drive mortgage rates lower, but rates have gone higher this week so far. Anyway, let’s keep watching by the week and being realistic about the housing market. What we want to look at closely is the number of buyers getting into contract. That’s where we’ll see the trend first, whether buyers engage or pull back.

NOTE: This isn’t political for me. Let’s talk about stuff that matters to buyers, sellers, and the housing market.

A QUICK NOTE ABOUT MINDSET IN 2025

One of the things I constantly emphasize is how important mindset is in real estate. How we think about things really matters, and I find people can get sucked into fear very easily today. When uncertainty is on the menu, it’s honestly hard to not feel stressed, and my sense is having inner peace probably isn’t going to happen by accident. My advice? As we talk about some cracks in the economy and a slowing housing market, keep cultivating objectivity to interpret the trends, focus on growing your network, take care of your mental health, and find buyers and sellers who have incentive to participate regardless of market conditions. Here’s a reel I made in November 2024 about missing hope and running toward the market. This sums up my message. It’s my sermon, and I hope it resonates.

DOES THE STOCK MARKET DRIVE REAL ESTATE?

The stock market has been volatile lately, so I’ve been getting questions about how this might affect the housing market. Well, the stock market and housing market are both tied to the economy, so there is a relationship, but I wouldn’t say the stock market drives the housing market locally since most buyers don’t derive their income from stocks. For instance, Sacramento didn’t drop during the dot com bust around 2000. Sacramento peaked in 2005, but the stock market didn’t peak until 2007. And Sacramento dropped in the ’90s while the stock market increased. All that said, we need to watch consumer confidence, economic uncertainty, and recession talk very closely. Moreover, there are some buyers using a 401K for their down payment, and I wonder if there is more hesitancy now. I also want to keep an eye on higher-end buyers who might be more affected.

ARE THERE MORE CANCELLATIONS HAPPENING?

Cancellations have risen in 2025, which isn’t a shocker since there are more listings in the midst of about the same number of buyers. But condo cancellations are basically at a high point over the past decade, which is notable. Compared to the number of new listings in Q1, about 14% of detached units cancelled compared to just over 15% for condos. Sellers, it’s good to see these stats. What does it take to get into contract and avoid becoming a cancellation? Hint: Proper pricing and negotiating with buyers.

WAIT, ARE CONDO PRICES DROPPING?

As I’ve been writing about, condos are having a moment right now. They are experiencing some unique headwinds in light of rising HOA costs, financing issues, and maybe even buyer preference (wanting a backyard at these prices). Here is Woodside Sierra in Sacramento, and while the single family detached market has been pretty flat overall, the vibe is declining for some condos. This is a good reminder that the market isn’t the same in every price range, location, or with every property type. I may push out a few different neighborhoods ahead. Let me know if you’d like to see that.

SEEING SPRING IN THE STATS

We’re seeing a spring seasonal market in the numbers. Since January, we’ve observed all the stuff we would expect for the time of year. More sales, more new listings, more pending contracts, larger homes listing for sale, etc… In terms of prices, most areas are up slightly from one year ago. Some of the smaller counties are down depending on the metric. I’ve lumped smaller counties into sixty-day chunks because thirty days is too erratic. Keep in mind the size of homes getting larger or smaller can change the average sales price and average price per sq ft (which is why I added average square footage to my charts). Ultimately, the best way to describe the market right now is pretty flat with sellers coming back more than buyers. Yet, it’s also really competitive for properties that check all the boxes. There isn’t just one word to describe every part of the market at once.

YEAR OVER YEAR

MONTH TO MONTH:

Thanks for being here.

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: What stands out to you about my post today? What are you hearing from buyers and sellers about the future?

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

Indiana Jones & the growing gap between buyers and sellers

By 4 Comments

The gap between buyers and sellers has been growing, but are we about to have an Indiana Jones moment in the housing market? I think many people are wondering that, so let’s talk about it.

UPCOMING SPEAKING GIGS:

4/4/25 Gateway Properties (private)
4/10/25 Yuba-Sutter Association (register here)
4/15/25 Culbertson and Gray (private I think)
4/16/25 Enlightenment Podcast (live event)
4/18/25 Prime Real Estate (private)
4/24/25 KW EDH (private I think)
4/28/25 Socotra Capital (Zoom)
4/30/25 Anthony James Office Meeting (private)
5/8/25 Empire Home Loans (details TBA)
5/13/25 PCAR
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
6/12/25 Realtist of Sacramento
9/26/25 PCAR
11/4/25 SAR Main Meeting

THE GAP BETWEEN BUYERS & SELLERS HAS GROWN

Sellers are coming back more than buyers. That’s the perfect description, and many markets around the country have this vibe. The number of new listings locally grew by about 20% this quarter from one year ago, but the number of closed sales is barely above last year at the same time. This has definitely made a difference with the housing temperature as many would call the market flat or use a word like “interesting” since it’s not always easy to put a finger on the decisive trend.

We’re still not back to pre-2020 normal levels, but the number of buyers is low today, so we’re feeling the extra supply. We’re having a definitive seasonal market, but it’s only been warm or mild overall since seller growth is outpacing buyer growth. By the way, in April 2008, there were about 13,500 active listings, so be careful about equating today with back then. This doesn’t mean prices couldn’t dip in a market like today. It’s just challenging to get a rapid price crash. This is about math.

Do you see the gap growing? There is more space between active listings compared to closed sales. It’s normal to have a wider gap than what we saw in 2021 and 2023, but we’ve currently grown to a point where the market has really flattened, so it feels like we’re at a place where we could soften ahead if the gap keeps growing. If rates go lower ahead though, could that energize the market to offset some of the softening? That’s the big question that only time will tell. What do you think?

ONLY MODEST BUYER GROWTH

Closed sales are up slightly from one year ago, which probably warrants a light golf clap instead of a roaring ovation. At the same time, we need to rejoice in the small wins today, so there’s nothing wrong with recognizing small growth. We want a market where more buyers and sellers participate because that’s what health looks like. Are we really below 2007 levels though? Sort of. Remember, the market for the second half of 2007 got destroyed, and that’s when volume really tanked. By the time 2025 ends, I’m expecting us to have eclipsed 2007 annual volume (like we did last year).

And here’s a different way to look at it. Most areas are up slightly. Take smaller counties with a grain of salt. Overall, pretty flat.

DELINQUENCIES GONE WILD (NOT REALLY)

There has been a viral narrative this week about single family delinquencies being at all-time highs, but it’s not true. The problem is people are looking at a visual of commercial delinquencies and conflating that with single family homes. I addressed this in an Instagram reel and on my socials. This is not about sugarcoating either. Let’s be realistic about the stats, call out fake news, and acknowledge any headwinds. Remember, our narrative changes as the stats change, but let’s not impose a doom or rosy lens on the market. I had one guy call me a Pollyanna this week. Haha. What’s the alternative here? Believe something that’s not real? Ultimately, let’s stay grounded in the numbers while keeping an eye on the future.

AN INDIANA JONES MOMENT

I can’t help but think of this classic scene in Indiana Jones for today’s housing market as people talk about the future. Do you remember when Dr. Jones was trying to replace the idol with a sandbag? Well, the housing market has clearly been softening, and the wonder is how much presumably lower rates could help boost the market ahead (if rates actually drop for a longer period). I think some people are very optimistic about this happening, but let’s not forget to watch consumer confidence, the price of things in a Trump tariff era, concerns about a recession, and carnage in the job market. I’m not promising anything here. All I’m doing is presenting a word picture to help describe some of the thinking on housing. What we know right now is the market is softening and feels like it’s at an inflection point. What happens when we throw in presumably lower rates? That’s the question. My take is lower rates will help energize the market, but it’s going to take more than a minor drop to close the growing gap between listings and sales. Only time will tell.

Thanks for being here.

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 when clicking from my weekly email and trying to comment. My apologies. I hope to have this solved eventually.

Questions: What are you seeing in the market right now? What are you hearing from buyers and sellers about the future?

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

The last question I ask during an appraisal

By 12 Comments

Does the value make sense? That’s the last question I ask when finishing an appraisal, and I want to walk you through what that looks like. I hope this will be useful for both agents and colleagues. Let me know what you think.

UPCOMING SPEAKING GIGS:

4/2/25 SAFE Credit Union Coffee Talk (RSVP here)
4/10/25 Yuba-Sutter Association (register here)
4/15/25 Culbertson and Gray (private I think)
4/24/25 KW EDH (private I think)
5/8/25 Private event (details TBA)
5/13/25 PCAR
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
9/26/25 PCAR
11/4/25 SAR Main Meeting

DOES THE VALUE MAKE SENSE?

When wrapping up the value, I find myself stepping back to ask one big question. Does the value make sense when looking at what you can get right now for that amount? I like this because it’s one final question to critique the final value. Does it seem reasonable for the market area? Or is it too high or too low? I think this is a good system of checks and balances to be more confident about value. And yes, this is an AI image I made with Grok of Dave Grohl (I’m a huge Foo Fighters fan). It’s a bit scary how good AI is getting, right?

CHECKING THE IMMEDIATE NEIGHBORHOOD

My appraised value was right around $550K, so the last thing I did in my process was step back and ask what buyers can get for that amount right now. I looked at the immediate neighborhood first as these were natural boundaries. I would be concerned if all recent sales and pendings were above $550K today because that might be a clue I’m coming in too low (unless there is a reason for a lower value). In contrast, if everything was way lower, then maybe I’m too high. As I said, this is a last question I ask to get a good sense of whether the value seems to fit with the market.

LOOKING AT A WIDER AREA TO BE SURE

Like I’ve mentioned in recent weeks, pulling comps today isn’t for the faint of heart because there aren’t that many sales. So, one thing I find myself doing is looking at a much wider area to compare various neighborhoods and understand what buyers are willing to pay in other areas. Here’s an example where I kept drawing different boundaries around various surrounding areas to ask what you can get for $550K or so. I didn’t choose comps in my report from the other areas, but researching these locations helped boost confidence that my value was solid.

Sign riders offering free pizza are the key to my heart. Haha.

ONE MORE THING

The yellow dot represents the subject value, and it was closer to the very top of the competitive sales (dark blue dots). When looking at sales this way, does it make sense for the subject to compete toward the top based on condition, upgrades, and location? In my opinion, yes. Look, it’s possible for some properties to break out of a range in light of upgrades or something special, but this property seemed to fit right in there based on comps (and what you can get right now for properties with similar features). One of the things I like about seeing a range of value is it helps me explain why the subject property’s price position makes sense. In this case, the competitive range was mostly from $450,000 to $550,000, and it was reasonable for the subject to be at the top.

In case you missed this visual last week, what do we do when there aren’t many comps? Here are some options:

Thanks for being here.

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 when clicking from my weekly email and trying to comment. My apologies. I hope to have this solved eventually.

Questions: What is the last thing you do when coming up with the value of a property, whether you’re an agent, appraiser, investor, etc…?

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

Skip to content