Sacramento's housing market is frozen, new report says | Call Kurtis
SACRAMENTO – Sacramento's housing market is frozen, according to a new report released Wednesday.
During the last few years, the issue for the real estate market in Sacramento was that few homes were for sale. But, that has changed. Inventory is now up. Unfortunately, demand for that residential inventory isn't.
Ryan Lundquist, a real estate analyst in the Sacramento area, said Wednesday that 44% of homes listed for sale right now in Sacramento have had to drop the price.
Why is the market frozen?
"It's frozen because of the struggle to afford," Lundquist says. "When you go to a mortgage calculator and see what the monthly mortgage will be, it's sobering."
As of Wednesday, mortgage rates remain high at 6.59% for a 30-year fixed-interest loan, according to Bankrate. And that's despite the Fed cutting key interest rates.
Could California's insurance crisis play a role in buyers sitting on the sidelines?
"I think we're seeing buyers more hesitant about buying in certain locations," Lundquist explains.
The California Association of Realtors says 13% of its agents report sales canceling over problems in finding insurance.
Some insurers stopped writing new policies in California due to fire risks. Sites like Zillow and Redfin now feature climate risk indicators on home listings for disasters like fires and floods. Zillow claims 90% of West Coast homebuyers are considering climate risk when looking.
"I do think it's a big issue," Lundquist says. "Here we're talking about insurance in the housing market, and we weren't talking about that 10 years ago."
As CBS13 has reported, insiders are worried the insurance crisis could cause California property values to plummet. State Insurance Commissioner Ricardo Lara is working to get insurers to write new policies.
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