sacramento housing market

When concessions stop working

April 16, 2025 By Ryan Lundquist 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?

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Tariffs don’t bother Chuck Norris & spring housing vibes

April 9, 2025 By Ryan Lundquist 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:

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

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Indiana Jones & the growing gap between buyers and sellers

April 3, 2025 By Ryan Lundquist 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.

Short sales are BACK (sort of)

March 19, 2025 By Ryan Lundquist 10 Comments

Wait, are short sales back? Yes, they are. But let’s unpack what this means and sift through the hype. Also, I have some thoughts about comp selection and VA carnage. I’d love to hear your take in the comments.

UPCOMING SPEAKING GIGS:

3/20/25 HomeSmart iCare Realty
4/2/25 SAFE Credit Union (RSVP here)
4/10/25 Yuba-Sutter Association (details TBA)
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

OPTIONS FOR COMPS TODAY

What do we do when there aren’t many comps? I did an exhaustive post a few weeks ago about the struggle of comps in 2025, and here’s a follow-up graphic.

YES, SHORT SALES ARE BACK

Short sales are more common today, but they’re still a tiny sliver of the market (only 0.5% of all local sales in 2025). Basically, there has been an increase from last year, and the level of short sales is back to 2020 levels. Technically we could say short sales increased by 142% from last year, or we could just say there were ten more. It makes sense to see more today since there really isn’t any place to go but up after being almost non-existent. And most importantly, some consumers are feeling inflation, job losses, and economic carnage. My advice? Watch this closely, and be careful about sensationalism.

Do you see the increase? And do you also see where this isn’t earth-shattering breaking news? Here’s a wider annual view from 2012 onward. I’ll add more years if there is demand.

FHA OWNERS ARE STRUGGLING THE MOST

Look, FHA is only about 11% of regional sales, but when looking at the percentage of short sale listings today, FHA represents 58% of those. Keep in mind there are fewer than forty short sale listings total (including pendings), so we’re talking about a tiny amount. Still, it’s important to watch this. Here’s a link to show why FHA borrowers are going delinquent, and it’s clear that economic carnage is the main issue. My observation is many of the short sales happening right now were last purchased in 2022 or 2023.

ARE WE STARTING TO SEE CARNAGE WITH VA?

There has been an increase in national VA foreclosure starts lately since there was a VA foreclosure moratorium in place that has now ended. We don’t know how many of these properties will end up as actual foreclosures, but this is something to watch. When looking at current short sale listings, VA loans represent 16% of those despite being about 4% of sales in recent years (there are only six VA short sale listings).

CHECK ON YOUR PEOPLE WHO PURCHASED IN RECENT YEARS

There aren’t that many short sales, but FHA and VA borrowers are the ones having the hardest time, so check on your people. Pay attention to those who bought around mid-2022 especially since that was the top of the price market locally. Prices aren’t down much from that time, and having negative equity isn’t a huge issue locally, but short sales do still show up. Keep in mind if prices do dip ahead, that would help lead to more short sales.

WHO IS BUYING HOMES TODAY?

Here’s a breakdown of reported buyer financing so far this year (January to mid-March). This is a good reminder that the market isn’t the same in every location and price range. Also, cash isn’t dominating like so many sellers think. I’m excited about this visual, and I hope you dig it too.

CLOSING ADVICE

Watch the distressed portion of the market closely, but be careful about being swept up in hype. Some housing doomers are using a small uptick in distressed stats to paint a crash narrative for the entire market. Look, if the stats support that idea, we should talk about it. There is nothing wrong with prices going down. Just be careful about saying things like, “We’re all going to die and VA loans are going to crash the market” when VA locally only represents 4% of all sales. Know what I’m saying?

Thanks for being here.

Questions: What stands out to you the most above?

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

sacramento housing market

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