The COVID-19 pandemic has had a significant impact on the market, with many experts predicting a slowdown or even a crash. However, as we head into August 2020, the Sacramento and national real estate markets are showing surprising resilience.
Sacramento Real Estate Market
In Sacramento, home sales have been steadily increasing since the beginning of the year, with June 2020 showing the highest number of closed sales in the last five years. The median price of homes sold in June was $427,000, a slight increase from May but still lower than the all-time high of $440,000 set in March 2020.
One reason for the steady growth in the Sacramento market is the low inventory of homes for sale. Many sellers have been hesitant to put their homes on the market due to the pandemic, and this has created a situation where demand is outpacing supply. This has led to multiple offers on homes, and in some cases, bidding wars.
Another factor contributing to the strength of the Sacramento market is historically low mortgage rates. The Federal Reserve has taken steps to keep rates low in response to the pandemic, and this has made homes more affordable for buyers.
National Real Estate Market
Nationally, the real estate market is also showing signs of resilience. According to the National Association of Realtors, home sales in May 2020 increased by 44.3% from the previous month. This was the largest monthly increase on record, and it surprised many experts who had predicted a slowdown in the wake of the pandemic.
Like Sacramento, the national market is experiencing a shortage of homes for sale, which is driving up prices in many areas. This has led to a seller's market, with many homes selling quickly and for more than their asking price.
One area of concern in the national market is the impact of the pandemic on the rental market. With many people losing their jobs or experiencing reduced income, there has been an increase in the number of renters unable to pay their rent. This has led to a rise in eviction filings in some areas, which could have long-term implications for the rental market.
Despite the challenges presented by the pandemic, the Sacramento and national real estate markets are showing surprising strength in 2020. Low inventory and historically low mortgage rates are driving demand for homes, and this is leading to steady growth in prices. However, the impact of the pandemic on the rental market is a cause for concern, and it will be important to monitor this situation in the coming months. Overall, the real estate market remains an important area of the economy to watch as we navigate the ongoing effects of the pandemic.