Housing is on my mind. Here are five things I’m watching closely in today’s market. I suspect many locations around the country are experiencing very similar trends. I’d love to hear your take in the comments.
UPCOMING SPEAKING GIGS:
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
6/12/25 Realtist of Sacramento
7/22/25 Investor Event (TBA)
9/10/25 Windermere Sacramento
9/16/25 Culbertson & Gray (private)
9/24/25 Keller Williams Roseville
9/26/25 PCAR
9/30/25 Elk Grove Regional MLS Meeting
10/15/25 EDH Coldwell Banker (private)
10/21/25 Orangevale MLS Meeting
11/4/25 SAR Main Meeting
1) MOVE-UP BUYERS MAKING IT HAPPEN
It’s not as easy to be a buyer today since the math isn’t working for so many people, but there are definitely buyers who simply need a different house or location, so they’ll make a move to make things work. Here’s a tweet exchange last week with a local resident. This person is responding to a post where I talked about some counties showing negative price stats. This is a good reminder for real estate professionals to stop obsessing over prices being up (that’s a seller-oriented narrative). The only thing that matters today is finding buyers and sellers who have incentive to participate regardless of market conditions.
We’ve seen more growth at higher prices so far this year. This is about buyers at this range having more money and being less sensitive to rates, but there are surely some move-up situations here too.
2) THE CONDO MARKET IS A DIFFERENT VIBE
The condo market has a different vibe than the detached market. Supply has shown a sharper increase, and we’ve also seen higher cancellations. This is a good reminder that different parts of the market might not feel the same. There are going to be some situations today where prices are declining in the condo market, but detached homes nearby could be flat. Keep in mind not every single condo complex has this exact trend either. What we don’t want to do is impose a “condos are struggling” narrative on all condos. My advice? Look to the comps in each area.
3) SHORT SALES HAVE GROWN, BUT BANK-OWNED SALES HAVEN’T
Short sales have tripled this year, but what that means is there have been 27 so far in the region compared to 9 last year. We could say that’s a whopping 200% growth, but that sounds sensational – especially when we back up for some context to see how many there were a decade ago. No matter what though, we’ve seen growth, so let’s not ignore a trend. I expect to see more short sales ahead as consumers are dealing with growing debt and delinquencies.
It’s not correct to say all distressed sales are growing because bank-owned sales have not grown this year. There has been no wave of foreclosures hitting the market. Let’s keep watching this ahead. For now, it’s best to say short sales have grown, but bank-owned sales have not.
4) NEW CONSTRUCTION IS NO LONGER SUPER HOT
Stats for new homes have been glowing, but that’s no longer the case. April was another lackluster month of new homes sales. Besides 2020, it was the lowest April in a decade locally. When we look at the past 90 days, volume is down 28% from one year ago. That’s 543 fewer sales this year compared to the same time last year. This is a blatant change from recent years, and it’s something we want to continue to watch. It seems concessions aren’t working like they used to.
Two things to watch: Pay attention to builder prices. If builders have more standing inventory, then they’ll have to offer even more concessions or lower prices. The thing I’m curious about is whether we see builders slow down their production. Secondly, watch homes that were built between 2021 and 2024. These units adjacent to current new construction are going to have a hard time competing with the brand-new stuff. Watch pockets with the highest levels of new construction in places like Roseville, Rancho Cordova, Folsom Ranch, and Elk Grove. Some agents are going to become specialists in working with owners who are next to new construction.
5) EXPECT TO SEE MORE CONCESSIONS
The housing market is softer than one year ago, but regardless of temperature, it’s still normal to see more concessions during the second half of the year since there are so many more listings to choose from. Check out the white space that represents July to December. Do you see an uptick every year (besides 2020)? So, expect to start seeing sellers offer more concessions to buyers – especially if rates remain closer to 7%. I can’t verify if this trend exists everywhere, but I have to think it’s going to be common in many markets around the country.
Here’s a look at sales with reported concessions in April in the wider region. Remember, there are two stats here. If nearly 45% of sales had concessions, that means 55% didn’t.
NOTE ON NAR LAWSUIT: Since the NAR lawsuit, it’s very possible that the commission to the buyer’s side is sometimes entered as a concession in MLS. However, in Sacramento County, last April the percentage was 40%, and in 2023 in April it was 41%. So, it’s not that much different today at 45%. The market is softer this year, so we would expect to see more concessions, right? This is something I will continue to monitor. In my strong opinion, we need to keep compensation separate from typical concessions. This helps both agents and appraisers when pulling comps and trying to figure out what sellers are giving to buyers. What sellers are doing for compensation for agents is a separate issue.
Thanks for being here.
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Questions: What stands out to you most about the five things to watch? I’d love to hear your take on things.
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Hey Ryan,
Thanks as always for timely, interesting information. Not to be Debbie Downer, but the condo market can be a leading indicator for the overall housing market. Its different this time because of specific issues like the difficulty in getting insurance but still something to watch.
September looks very busy for you!
Thanks Joe. Yeah, I hear you there. Definitely some unique issues with condos and insurance.
For any onlookers, we often think of insurance issues relating to rural properties and fires, but condo associations have been hit big with insurance hikes for the entire association, and that’s caused HOA fees to spike. This is a really big deal to buyers today to pay an extra $400 to $600 monthly for the HOA fee, and it’s one reason buyers have been ghosting condos basically. I suspect many buyers want a yard also if they’re going to pay so much for a mortgage today, so there could be a buyer preference issue. Some condo associations don’t have adequate reserves also, and we’re seeing years of neglect become an issue for financing now. There is a California balcony law that went into effect in 2025, and that’s not helping either. Yet, issues with condos really started more with insurance last year.
Glad you mentioned that about September. I need to probably not add anything else that month. 🙂
Absolutely love the charts and graphs! So much easier to explain this to people with the data behind me. Not surprising on the new builds. I imagine there’s some consternation on their side as well as they know that their cost of doing business is going to radically increase like so many other things. The cost of doing business has really changed over the last few years for them.
Thank you Debra. Yeah, I’ve heard stats from builders saying tariffs could increase their total cost by 1%, but we’ll see how accurate that is over time. Frankly, I’m not sure builders have room to raise prices 1% though.
Good recommendations on stuff to watch. Looking forward to a more active real estate market, regardless of what prices are doing.
Thank you Gary. Exactly. And having more supply can help eventually lead to more sales. We want a market with more activity. That’s what health looks like.
Hi Ryan. The market is challenging but recently I am seeing more activity with buyers visiting some of these properties. I currently have 6 listings and 3 more are coming on board within the next week. I have listings as far as Valley Springs with most being in the Sacramento region and its surrounding areas. I do have a Short Sale that is a Condo and it is priced well below market and still no offers. I recent dropped the price on a few of my listings (SFH) to gain some activity. The interesting fact is I am getting agents calling and wanting to make an offer and then NOTHING. They ghost you. Priced right and you do get some activity. Just needing to educated sellers that this market is slow and we must be in excellent condition and priced right. Thank you for sharing your insight on the market. This is an excellent tool and always share them with both buyers and sellers.
In regards to the rest of the country, I do know in Texas it is slow (I have talked to friends in that market) and I have a listing in Denver and we spent $20K to upgrade and only a few showings there.
Thank you Ernie. And great piece in the Sacramento Bee on your Elk Grove $6M+ listing. Interesting to hear about ghosting. That seems on-brand for 2025. It seems like everything is more challenging this year. I’ll have my ears open to hear more on that over time. The number of pending contracts has been lackluster since early April. I think tariffs and higher rates are a killer combination. It would help the market if consumers began to feel more comfortable and less uncertainty.
Hello Ryan,
Thank you for your blog – great info! I think the increase in supply that we are seeing is exposing another critical determining factor in unit volume: the number of ready, willing, and able buyers. I see from your charts that there was only 1.65 months supply in Placer County a year ago, and now there is 2.52 month, which is still historically low, but enough of an increase to show that we are also experiencing historically low demand. Have we hit the affordability cap for our region? Is there a way to look at what average rental prices are doing vs. average mortgage payments for new sales? And to see area AMI v. the increase in monthly mortgage payments? If affordability is the main cause of reduced demand, then it’s logical to think that one of two things must happen to increase transactions: 1. Rates go down, or 2. Prices go down. A solution could be temporary or permanent rate buy downs offered as an incentive from the sellers.
Thanks Joel. Yeah, demand has basically remained pretty flat, but we’ve seen supply grow. And while we are at pretty normal numbers for the months of supply, it’s definitely been enough to flatten the market. I think some might think we need a normal number of listings to see prices flatten or drop, but that’s not true. Affordability is really tough right now. I have some HAI graphs relying on stats from CAR. I’m happy to share if you send me an email. It’s not at the worst level in 35 years, but it’s pretty darn close. Average rent is a tough stat to get. Some rental sources are really showing apartment rent.
Hey Ryan,
Great insights as always — thank you for your clarity on market trends.
Quick question on concessions: With buyer agent compensation now often being recorded as a seller concession post-NAR settlement, how are you treating that in your appraisal work? Are you distinguishing between true buyer incentives (like closing costs or repairs) vs. the buyer agent fee logged as a “concession”? Or does the data not make that distinction clearly enough yet?
Appreciate your perspective on how this is affecting comp analysis and adjustments.
—Greg Alkema
Hi Greg. It seems in the vast bulk of cases, the seller is still paying something for buyer compensation. It does seem like there has been more negotiation on the percentage though, but it’s happening almost across the board based on conversation I’m having with brokers and agents. Unfortunately, there isn’t one big data export we can do from MLS, so it’s basically anecdotal perception for the time being. In a sense it feels like business as usual. I think the market growing softer since the NAR lawsuit has helped sort of keep things “normal” so to speak. We could see a difference in years ahead whenever the market gets tight again.
Appraisers don’t adjust for agent compensation, but I do think we need to know what’s happening in the comps. So, I want to be aware whether a commission or lack thereof influenced the final price. If I see some properties selling for lower or higher because they did or didn’t include a commission, that seems like a pretty important detail that I shouldn’t just gloss over because we’ve never thought that way before. Here’s my thing. When the rules change, sometimes we have new considerations and new questions to ask. I will say over the past year I’ve had some resistance and even anger at this idea, but I don’t know how we don’t ask these questions. So far though, I don’t see any big change happening in the market in this regard. My antennas are up though.
Oh wait a minute, housing is on Ryan’s mind. I am absolutely SHOCKED at that. hmmmmm oh wait a minute sorry wrong Ryan, this is Ryan Lundquist the all-knowing and all-seeing Stats of all Stats guy. Whew now that is cleared up. I am with Joe, the condos are (excuse me, were) the more affordable product, but out in here in the land of sun and NO insurance companies, condo’s are taking a beaten on prices as association fees are on the increase in some projects. Other issue, as I have said in other posts in other places, are those in the appraisal world doing the extra work that Fannie dictated back in September 2023 for condo appraisals? If they are then I wouldn’t be surprised if some condo projects are having issues and appraisers might be calling them out. As to my neck of the woods, I sent an estate appraisal out a week ago and told the successor trustee that the retrospective estimated market value, could very easily be higher than the listing agents’ number to list at (retrospective date was 5 months back). I referenced them to the page number in the report where the graphs are showing the market turning south. Not in a big way but this particular market, pricing under $475,000 in my area is having a hiccup unless it is a cash buyer for obvious reasons. Seeing the high-end market that everyone says is still good. I then say to myself what market area are they looking at. Reason is that the $3M and $4M sales aren’t happening very frequent, if at all down here my neck of the woods, which is much different than 2021 and early 2022. The number of active listings in this price range are increasing and the DOM is out beyond 100 days (aghast I say over 100 days, what is the world coming to). I know you like to keep it straight forward but as always, I have to end this with those in the RE world seriously need to keep a watch on the 10-yr treasury. It spiked today up to 4.596 after the 20-year bond auction was less than favorable. Many reasons but this bond buying can’t slip up or if it does, some not to nice things will happen in the RE market. That will probably have a little bit of an impact to the upside on mortgage rates. Curious what happens if these economic things continue. And YES, I was Debbie Downer to quote Joe Lynch. All my best to a really good man and really glad you had a RE thought today.
Brad, you are the best. And yes, it’s hard to turn my housing mind off. That’ll probably follow me for life mostly. Haha.
Thanks for your insight. The higher end has had strong volume here, but that’s something that could change. I’m finding the most growth this year is still at higher prices, but trends don’t last forever. That’s for sure. Let’s keep comparing notes.
Great post, Ryan. I would agree that the market is giving weird vibes right now. We are seeing some flattening of the market as well in the Birmingham area. Of course, this is not a market-wide phenomenon but rather occurs in different areas based on the demand relative to supply. As you pointed out, it is important not to characterize the entire market based on what is happening to a part of it. One area or price range may be less in demand than others. Always love to see what is happening in your area compared to mine.
Great commentary. Thank you so much Tom. This is a time when objectivity and interpretation of trends becomes so important.