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  1. We have equity again

During the housing bust and subsequent recession, many people wanted to sell their homes (or shed their bloated mortgages!) but couldn’t since they were underwater – owing more than the home was worth. But those days are certainly gone, as Sacramento has been one of the country’s hottest metro markets for home price gains in the last five years. In fact, Sacramento homeowners have seen 13.1% home value appreciation over the last year, and 2016 is surpassing expectations so far, as we might reach double-digit equity gains again. Many homeowners in the California capital now have 50% or more equity than they did in 2012, which means our home prices are not only high enough to sell, but also cash in.

What does this mean for home sellers? With equity gain appreciation gently slowing, now could very well be the best time to sell and maximize that profit.

  1. Mortgage interest rates will go up (eventually)

At the beginning of this year, all the talk in financial circles was about the inevitable Fed interest rate hikes that were expected in mid 2016 and continue for the next 18 months or so, looking to pump the brakes on an expanding economy. Since mortgage interest rates directly correlate with the Fed rate, mortgage interest rates were expected to rise as well. However, when Britain chose to leave the European Union it sent shockwaves through world financial markets, and combined with volatility in Venezuela, the Middle East, and concerns over China, etc., the Fed chose to suspend interest rate hikes. – and probably will for the near future.

What does that mean to the average homeowner? When interest rates go up, buyer demand goes down since affordability is diminished, so home values usually cool and the market balances. But with a rare suspension of that Fed rate hike, Sacramento homeowners have basically been given a “bonus time” where rates remain low and homebuyer demand strong. But wait too long to sell (rates are expected to go up again in 2017) and it will be too late to sell your home at the perfect time for maximum profit.

  1. Selling your home and then “moving up” makes perfect sense right now

Many of you may be asking, “But when I sell my house and then buy a new house, I’m not really benefiting from a seller’s market, right?” It’s a great question and you’re right – usually. But remember that there are micro-markets based on neighborhood or even price range. Right now, the lower end of the market – homes in working class neighborhoods, small family homes, and starter homes have gone through the roof in price and the demand is white hot. But the higher end of the market – between about $400,000 – $700,000 – is still healthy, but not seeing price increases or demand so dramatic. Likewise, the luxury home market (considered above $900,000 in Sacramento) is starting to see a stout increase in prices again, but went through a period of stagnation much longer than the average priced home.

What does this mean for home sellers? Homeowners that can sell a starter or modest price home and THEN move up to a bigger and nicer home in a higher price range will come out the biggest winners, effectively leveraging the ability to sell in a seller’s micro-market and buy in a buyer’s micro-market. That’s an incredible opportunity!

  1. Demand is HOT!

Sacramento is facing a shortage of affordable and middle-of-the-market housing, with new construction lagging far behind what you might find in comparable metropolitan cities around the country and low housing inventory. Additionally, rents are skyrocketing, as the number of renters paying at least 30% of their income towards housing is higher than ever – and on the rise. Add in low interest rates and strong job numbers in Sacramento, and the result is a surge of demand from homebuyers.

What does this means for home sellers? Buyers may be more interested in your house than ever, resulting in full-price offers, shorter days on market, and even bidding wars…IF you sell now!

  1. Housing inventory is really low

The Sacramento region is facing a significant housing shortage. We’ve seen a short supply of homes for sale in the past decade, but those markets were insulated by thousands of short sales, foreclosures, and other distressed properties flooding the low end of the market. But now, the banks have worked through most of their distressed housing inventory (conventional sales are up 11.6% compared to a year earlier) so distressed property sales were a smaller share of the housing inventory.

However, overall inventory numbers have also shrunk. The inventory in January 2016 was a jaw-dropping 27% less than in January of 2015, which was incredibly low to start with. Inventory further declined through the start of 2016, and new construction rates are still some of the lowest in the country.

What does this mean to Sacramento home sellers? The number of For Sale homes available to buyers is lower than ever, and any Economics 101 student can tell you that when demand is high and supply is low, it’s an ideal time to maximize price by selling!

  1. But we may be near the top of the home appreciation “roller coaster”

Sacramento was recently named the 4th hottest market for home prices in the U.S., and downtown redevelopment and strong employment in the region could help keep a healthy market. But most experts predict that we can’t keep up this abnormally hot pace of price growth. In fact, we are starting to see price appreciation slow a little bit month-to-month, even adjusting for the busy summer home selling period. That doesn’t mean that prices will go down any time soon, but we’ll probably see the market go from an all-out sprint to a brisk run.

What does this mean for home sellers? Considering the combination of factors of potential interest rate increases next year, the uncertainty of the Presidential election, possible cooling demand in higher price ranges, and home prices hitting their ceiling, NOW very well could be the perfect time EVER to sell your home in Sacramento!


If you’re interested in finding out your home’s value and making more money than ever on a  home sale now, give us a call!