It feels like a standoff right now with buyers and sellers. Who is going to blink first? Sellers aren’t budging on the price, and buyers aren’t willing to pull the trigger on an overpriced home. In today’s post, I have lots of topics including dropping prices, shrinking demand, stats for nine counties, and the vibe of getting one offer. Skim quickly or digest slowly by topic.
UPCOMING SPEAKING GIGS:
6/12/25 Realtist of Sacramento (register here)
6/26/25 Comps & Adjustments (3 hours)
7/17/25 Jamie Pierroz Event (private)
7/22/25 Investor Event (TBA)
7/25/25 Prime Real Estate (private)
8/6/25 Realtor Event TBD
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
MISSING URGENCY IN THE HOUSING MARKET
Buyers lack urgency, and they aren’t desperate to get into contract or overpay. They are extremely patient right now, so they’re going to take their time to find the right house at the right price. And if you thought buyers were already picky, getting some negative price readings is only likely to inflame more patience. On the other side, sellers are in a similar lack-of-urgency boat in that many are holding out for a unicorn price that probably doesn’t make sense for today’s market. The reality is many sellers don’t have a pressing timeline, and some don’t even need to really sell, so they don’t have major motivation to price it right and get the deal done. Yet, negative price readings can be motivating for some sellers ahead as that will feel sobering for some.
BUYER DEMAND HAS BEEN SHRINKING
It was the second-worst month of sales volume in May in recent decades in Sacramento County, our largest local county. Over the past year, we’ve had a trend of slightly more volume as buyers have been thawing out a little, but May was a volume beatdown. Sales have already been lower due to affordability struggles, but they were especially bad last month with an extra layer of economic uncertainty. Keep in mind demand ebbs and flows, so it’s not going to shrink forever. But for the time being, we are at a low point.
All that said, it’s key to remember that not every county and neighborhood is showing the same exact trend. For instance, May 2025 was definitely lower than last year in Placer County, but it still beat 2023 and 2020 – unlike Sacramento.
NO LONG LINES AT OPEN HOUSES LIKE 2021
I did a poll on my Instagram stories a few days ago, and the results line up well with what I’m hearing from agents overall. There are some crowded open houses, but traffic is mediocre in many cases. By the way, I don’t base my entire perception of the market on a poll with 150 votes, but hearing what people are experiencing in the trenches is worth listening to.
WHY IS MY PROPERTY NOT SELLING?
Yesterday, I had five conversations with real estate agents about their listings. I’m grateful when people reach out, and I’m always happy to trade some quick thoughts about the market (text me before calling). Please know that I don’t look up individual comps and tell someone if a listing is overpriced, but I do talk about the market. The reality is we’ve seen a sharper change lately, and many sellers are behind the trend living in the past. Here’s a snippet of a response I gave by Instagram DM.
Do you see how we are no longer at the pre-2020 norm level of competition? We’re also nowhere close to 2007 levels (or 2021). For the past couple of years, we’ve been hovering right around the norm, but May 2025 showed a sharper change beyond the norm.
The spring market peaked early this year (blue line). Moreover, the change is sharper than the norm too, which shows more properties are selling below the original price. In short, I think many sellers have been caught off guard. They don’t realize the spring market already peaked a couple of months ago, and they are out-of-touch with waning buyer demand.
GETTING ONE OFFER IS THE VIBE (OR ZERO)
Over the past weekend, 67% of pending contracts got one offer, and only 4% of units had five or more offers. Sellers, work with buyers. Offer concessions. Get the price right. Don’t expect buyers to bend to you. Meet them where they are at.
A HEFTY UPTICK IN SUPPLY
We saw a hefty increase in the months of supply in recent months. It wasn’t because so many sellers flooded the market. In fact, we actually didn’t have as many sellers hit the market in May (as I talked about last week). The issue is buyers backed off the market, and that helped the pile of active listings grow. Remember, supply can grow in two ways: 1) More sellers list their homes; 2) Fewer buyers participate, which means the pile of active listings grows since not as many homes are getting into contract.
HELLO YEAR-OVER-YEAR DECLINES
We are starting to see some year-over-year price declines in various counties. Not all metrics are down, so maybe the median is down while the average is still up, but there is no mistaking we’ve seen prices flatten to the point where we are starting to experience some negatives depending on the area. Remember, stats can bounce around from month to month, so don’t build your narrative on one month of data or put all your emphasis on the one metric that is up instead of down (or vice versa). I’ll share more counties below.
A SLIGHTLY BETTER MONTH FOR BUILDERS
The month of May was a slightly better month of volume for local builders, so have extra concessions started to work more? Maybe so. Volume is down 23% year-to-date compared to last year, which is a big number, but it’s a slight improvement from prior months. This is something we will monitor closely. Like I keep saying, builders either have to offer fat concessions or lower the price (or both). Keep in mind what builders do can really affect homes that were built in recent years around new subdivisions. I still think the hardest home to sell is the one that more directly competes with the builders because traditional sellers cannot buy down the rate as much as builders or offer such big concessions.
And here’s one of the larger builders over the past two weeks reaching out to agents saying, “I love you. We’re going to pay a commission to the buyer’s agent. Thanks for bringing your buyers to us.” And if you don’t get the meme, this is Stevie Wonder from his “I just called to say I love you” video.
DATA FOR NINE COUNTIES FOR MAY 2025:
I tend to lump smaller counties into sixty-day chunks with the hope of at least getting some sort of a comparison. Some areas are down, and others are up. When there aren’t that many sales, the numbers can bounce around quite a bit.
MONTH TO MONTH:
YEAR-OVER-YEAR:
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Questions: Who do you think is going to blink first in today’s market? Buyers or sellers? I’d love to hear your take on things.
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INVENTORY EXPLAINED WITH SKATEBOARD WHEELS
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.
