This market has been a slow burn. What I mean is we’re starting to see softer prices, but it hasn’t been really quick change like some sensational housing headlines might suggest. Let’s get into it. Skim by topic or digest slowly.
UPCOMING SPEAKING GIGS:
7/31/25 Big market update & panel at PCAR
8/6/25 Realtor 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
10/23/25 CREB Meeting (TBA)
11/4/25 SAR Main Meeting
12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
UPDATE:
I wanted to clarify something. When I say the market is a slow burn, I’m referring to the overall trend. There are obviously parts of the market that are doing different things than others. For instance, condos have a much colder temperature. In coming weeks, I plan to do a Q&A about newer construction also (which has had bigger declines in some instances).
ARE PRICES FLAT OR DECLINING?
What’s happening to prices? Well, the truth is it’s not always easy to tell when pulling comps or making graphs, but some neighborhoods are flat while others are in declining territory. As an appraiser, I find myself checking the “declining” box in appraisal reports lately to describe what prices are doing (but not always). Here’s an example with Oak Park (excluding North Oak Park), and can you see how the blue dots are starting to point lower over time?
NOTE: I’ll share updated regional and county images soon to show the price trend, but today I only have scatter graphs. If you hate those graphs, then you might hate this post.
MORE OBVIOUS DECLINES IN CONDOS
I’m finding a more obvious decline in some condo / townhouse subdivisions. This doesn’t mean every single condo project is having a hard time, so let’s be careful about generalizations. But when I make scatter graphs like this, it’s been easier to spot a declining trend with these units. Many condos have been struggling with higher HOA fees due to insurance issues, and I wonder if buyers have stepped back more from attached living with tiny yards (there could be a preference issue). There is a new balcony law in California as of 2025 (SB 326), but I don’t think that’s the culprit in slowing the condo market because the trend started before this year. Don’t get me wrong. SB 326 could be a big issue in older condo developments with deferred maintenance (and balconies).
Condos have had a higher level of cancellations this year compared to detached units too. Detached units are still below 2019 levels.
DISCONNECT BETWEEN ONLINE AND THE MARKET
There is a disconnect right now between the crash bro housing narrative about plummeting prices and the actual market that is down slightly. Of course, market speed could change, and there is nothing wrong with that or declining prices, but to date it’s been a slow burn instead of fast change (more on that below).
FLIRTING WITH FLAT AND DECLINING
Like I said above, it seems hit and miss by the neighborhood, and it’s not always easy to tell what’s happening to prices in the moment when pulling comps. Look, everyone will be an expert with the benefit of hindsight, but when you’re in the midst of a trend, it takes skill and time to understand and articulate what is happening. Ultimately, some areas look really flat and others are experiencing more obvious downward price pressure. Keep in mind these types of graphs reflect sales, so any trend happening right now really won’t show up instantly in the data. So, this isn’t the perfect way to see the market (there isn’t a perfect way).
IT’S BEEN A SLOW BURN
No matter what, it’s been a slow burn today. We haven’t seen really quick price change like we did in 2007 when the market declined VERY fast in a short period of time. Back then we had almost 200% more active listings locally, so it was very easy to get quick results. That hasn’t been the vibe today. I’m not sugarcoating the market. I’m just saying we need to be realistic about the difference and not expect 2007 results with 2025 stats. Moreover, one thing we’ve seen lately is sellers have backed off over the past couple of months, so we haven’t seen as many new listings, which means supply hasn’t grown as much. This is important because the number of sellers (and buyers) can affect the way the market feels and what prices do.
CLOSING TIPS FOR TODAY
Beyond making graphs, I think so much of today involves comparing and contrasting sales and listings. Is there a price difference between sales and what is happening in the listings and pendings? Sometimes downward price pressure doesn’t show up right away in scatter graphs like the ones above, but we notice it first when pendings start to get into contract at lower levels. Remember to look for a pattern of pendings instead of just one example. We don’t want to pin our entire perception of the market on one property, right? Also, we might have to look at adjacent neighborhoods since there aren’t that many sales happening right now. County and regional trends have been flirting with flat to down slightly from one year ago, but that’s not always going to rigidly show up in every single price range and location. Yet, flat to down slightly from one year ago is how the market feels in many areas too. As an appraiser, when saying the market is declining and making downward adjustments, my adjustments have been pretty modest so far since change hasn’t been exponential.
Let’s keep watching what happens with seller behavior, buyer behavior, consumer sentiment about real estate, and mortgage rates. It all matters.
Thanks for being here.
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Questions: What are you seeing with comps right now? Are prices up, down, or sideways? I’d love to hear your take.
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Sent you some private thoughts. For public consumption, yes, I’m stable to declining in most of my markets right now. My conversations with agents may show that I’m a little behind the curve, too.
For appraisers watching, developing a group of trusted agents in markets you cover that you can have honest discussions with is invaluable. My group of friends are hinting that we will see price drops soon in my primary markets, if they haven’t started already. It’s tough out there, at least in my region.
Thanks Joe. And you could’ve posted that publicly too, but I apprecaite it. Spot on as always, and I really agree about relationships with agents.
I am hearing mostly the same thing from agents. It seems like the bulk of people are saying prices are softening. The expectation ahead is lower prices unless something changes that trajectory. I will say some people in real estate confuse price reductions with a declining market though. While price reductions can be symptomatic of dropping prices in a marketplace, some homes are simply overpriced, so having a price drop isn’t always indicative of declining prices. I mention this because I think we need to work hard to look at lots of stats to see the forest through the trees. If we judge the market only by what’s on our desk, that’s a limited view.
I’m going to add something. I’m working on an appraisal now and found a clear upwards trend for acreage properties in my area, contrary to everything discussed here and my expectation.
I guess my reason for posting is that every market is different and we need to do the analysis each time.
Thank you, Joe. And let me add something too. It’s a slow burn statistically for the overall market, but new construction has been beat up this year, and there are some more definitive declines in some newer neighborhoods.
Dear All Seeing Ryan and Joe, hard to argue with the data. Ryan if you look at the bulk of your scatter diagrams they are all softening with some heading down. Even without a trend line. As to the Ag market, Joe be careful on the analysis as I have seen sputters in my market with Ag and custom sales. The good ol confirmation calls will be key for you in the Ag market. Overall, down south that market is stagnant or softening due to lack of actives (sellers wanting to sell) and buyers not wanting to hang out with 6.7 to 6.9% interest rates.
I am now exhausting my Excel grids as I breakdown the 3 yr, 2 yr, 1 yr and 6 to 8 months. When I am seeing the dotted polynomial line to head down and / or cross the simple regression line, I really start drilling down on the last 1 year to 6 month charts.
I am sure out there hiding is an Excel and Stats guy/gal that will tell me that is meaningless and to ignore it. But yikes some of my markets when looking at newer active listings is telling or yelling something. I am having a hard time expressing to agents when they see my price scatter diagram charts as they think I am making up the dots.
Have been amazed at the volume of agents currently who don’t want to hear my thesis on the data. And yes, I know I sound like a broken record as this is not the first time, I have made this comment, in this forum. Course can’t blame them, why would somebody trust a guy wearing a Stetson. Hey, wait that’s me. Guess some think, I am not reading the tea leaves correctly.
Last item I saw the National Post email today that indicated that seniors are making up a big chunk of the purchases, especially in 2024. Weird because I just finished an estate appraisal and the market in that over 55 community was softening. Not sure how all this connects but this general market is getting weirder by the month.
Thank you, as always, for your great insight and willingness to make me think.
Thank you, Brad. I’m consistently hearing about prices softening. I speak at least once a week somewhere typically, so I’m getting a ton of feedback about the market. I’m getting almost no resistance at all from anyone when talking about downward brewing price pressure too, which I think is telling.
Interesting about 55+. Locally, in Placer County, volume has been really strong for 55+, but that doesn’t mean the market is rising. Normal volume, but softening vibe. In Sacramento County, I’ve noted much lower volume, so I think stronger (normal) volume in Placer is about the location more than anything.
I’ve also seen stats like that. It just goes to show we need more than one age group to be playing the market.
We are seeing a lot of the same thing up north. Nice to see consistency on the west coast.
We stick together. #WestSide Thanks Gary.