Modest price growth & Gavin Newsom’s expensive taste in homes

The internet has been buzzing this week about Governor Newsom’s new $9.1M home purchase, so let’s talk about it. But I want to be clear that this is about real estate – not politics. Also, I think modest price growth is a really good way to describe the market.

UPCOMING SPEAKING GIGS:
11/20/24 Delia Real Estate Group (private I think)
12/5/24 Made 4 More Team (Exporting Data from MLS)
12/11/24 Gateway: Think Like an Appraiser (private)
12/18/24 Coldwell Banker Sierra Oaks
1/15/25 Mike & Joel Event (details TBA)
1/16/25 Sac Real Producers event (details TBA)
1/24/25 PCAR Market Update (details TBA)
2/6/25 She Invests event (TBA)
2/11/25 MLS Meeting TBA
3/6/25 Yolo Association YPN Event
3/12/25 Windemere Sierra Oaks
4/8/25 Culbertson and Gray (private I think)
11/4/25 SAR Main Meeting

MODEST AT BEST PRICE GROWTH

Modest at best is a good way to describe price change this year. I’ve been mentioning this in my market talks over the past couple of months, and the stats are really starting to show minimal gains. I’m also tending to see this when pulling comps, but that’s a case-by-case situation. Keep in mind slightly smaller homes sold this year, which explains why the average price per sq ft rose (smaller units tend to have a larger PSF). Whether you’re local or not, are you seeing something similar?

THREE QUICK TAKEAWAYS:

1) Keep it real: There might not be obvious growth when we look at older comps.

2) Don’t be rigid: Price metrics don’t translate perfectly to all locations and price ranges, so be careful about imposing county metrics on neighborhoods. In other words, we don’t want to say, “The median price shows no growth for the county, so that’s what’s happening in the neighborhood.” Maybe. Maybe not.

3) The vibe isn’t 2021: It’s not 2021 price growth any longer. It’s not 2021 market speed. It’s not 2021 selling over asking vibes. I realize there are still some really aggressive examples, but those are trees, and I’m talking about a bigger view of what the entire forest looks like.

THE GOVERNOR DIGS OUTLIERS

Okay, can we talk about the Gavin Newsom’s real estate transactions without getting political? Maybe that’s too much to ask, but I’d like to share some perspective on the California Governor’s recent $9.1M acquisition as well as the house his family owns in Sacramento County. This is NOT about red or blue, but real estate. If we had a red governor, I’d be making these same graphs. I realize some people might have a strong political reaction, but that’s not what I’m doing. By the way, I’ve also written about where Ronald Reagan lived in Sacramento (a red governor).

THE NEWEST NEWSOM PROPERTY

News broke over the past week about the governor relocating to the Bay Area, and the word so far is he’ll be splitting time between Sacramento and Kentfield. No matter what, the sales price at $9.1M is one of the highest sales ever in Marin County (for Kentfield). Technically, the Governor’s family actually “downsized” since the new property is only 5,609 sq ft compared to over 12,000 reported square feet in Sacramento. It’s also less than one acre compared to about eight acres locally. One more interesting aspect is this property sold for $10.1M in July 2022 before taking a million-dollar haircut in 2024. As you can see in the visual below, this property is one of the top sales ever on MLS, so it’s flirting with outlier territory. 

THE SACRAMENTO HOME WAS ALSO AN OUTLIER

Governor Newsom’s property in Sacramento County was purchased in 2018, and it’s still the highest sale ever in Fair Oaks at $3.7M (see pics here). Why did this home sell for so much more? Well, it’s significantly larger than others in both square footage (a reported 12,000+ sq ft when considering all structures) and lot size at 8+ acres (a freakish size for the area). I really understood this property for a governor since it has a secluded feel due to being gated and on a large lot, and it’s also not far from Downtown Sacramento. The interesting part is the location is a few miles up the river from the Governor’s mansion that started construction under Reagan (but was not used).

MY GOVERNOR STATS IN A NEWSPAPER

The data nerd in me is excited that The San Francisco Standard used my stats to add to their viral story about Newsom’s new house. I made data available to another newspaper too, and we’ll see what they do with it. Cool, right?

APPROVING COMMENTS: I won’t approve any overtly negative political comments. Let’s keep it focused on real estate. I’m okay with a little edge because we can handle that as adults. All I’m saying is this isn’t a political cesspool post. If you want to rant, please find another place for that.

Thanks for being here.

Questions: How would you describe prices right now? What do you think of the graphs? And did you watch the Jake Paul / Mike Tyson fight? I’d love to hear.

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