Placer County sits in a paradise of natural beauty in the bustling metropolitan area of Sacramento. It’s a place of growth and opportunity, but how will it grow in 2023? Last year brought some difficult changes in the real estate market — instability with interest rates shook the soaring prices and fast-moving houses.
Fortunately, the outlook for 2023 is much better. Interest rates started falling at the end of last year with promises of continued decline, this of course has been volatile. Stability is activating the market and promising growth in pricing. As the year progresses, the opportunities should improve in a number of ways, particularly in Placer County. Kristen Haus, a local realtor, already noted improved inventory. Some predictions even show better prices in January 2023 than in January 2022, but that’s only when selling in the right market.
Increased property values
House prices haven’t reached the same heights as in 2022, but they are rising, according to the National Association of Realtors. The West Coast is forecasted to see house prices continue to increase, though these gains may remain relatively small.
It remains a great time to buy with properties still at lower costs than last year's values. The average house in Placer County sold for $693,190 in 2022, and at the start of 2023, that number was at $620,00. While there’s still some room for growth, January already showed a 2.5% increase in average sale price from December 2022. Trends show prices will continue in this upward pattern, making the current lower buy-in an even more attractive investment opportunity.
Of course, some houses already met or surpassed last year. Homes in the 75th percentile saw gains at the beginning of 2023 from January 2022 by one percent. These tend to fall in the lower end of luxury properties, which took a significant hit last year due to the interest rates. Homes in the 95th percentile are less than two percent away from last year’s prices. This trend is likely to continue as interest rates drop further.
More inventory selling
For years the Placer County real estate market motivated people to buy and sell homes because of incredible rates and promises of high returns. When interest rates went up, buying started to decline. In December 2022, the trend changed once more. It marked the start of increased pending home sales.
When a house goes off the market, it typically stays pending for one to two months as inspections go through and escrow closes. In May of 2022, pending home sales and home sales started on a downward trend that didn’t stop until December. Current prediction models show the last month of the year wasn’t a fluke but a change in patterns.
Less volatile interest rates
After years of incredible interest rates and minimal hikes, 2022 proved to be a trying year for mortgage rates. Buying a house felt like a race against the next interest hike, reducing the investment opportunities of the cooling housing market. If the constant fear of higher rates scared off buyers before, it appears the stabilization process was inspiring them in the short term. As we can see from house-selling trends, people are buying more houses again, and investment opportunities are only growing.
The National Association of Realtors predicts interest rates will settle below 6% before the end of the year. While 2023 started with better numbers than the highest spike at 7.08%, there’s still a way to go before we dip below 6%. The year started with an average rate of around 6.48%, a relieving number after seeing them soar for so long, but there’s always room for improvement. Fortunately for home buyers, it looks like 2023 should deliver better opportunities.
How fast will houses sell?
Houses moved slower in January 2023 than in December 2022 and January 2022. On average, at the start of the year, Placer County homes for sale sat on the market for 73 days. The slowdown may be related to the recent increase in inventory, likely inspired by the slow but steadily decreasing rates. As this pattern continues, the inventory-to-buyer ratio should improve, often reducing the time it takes a house to sell. The great news is slower sales provide negotiating opportunities to buyers. A house sitting on the market for a while motivates sellers to make their offer more attractive.
Population growth continues
Placer County’s steady population growth shows no signs of stopping in 2023, especially with the positive trends for the real estate market. Being home to Tahoe City and a part of the greater Sacramento area already makes Placer County a trendy place to live. Still, incredible employment opportunities are the area’s secret to continued growth.
Impact of the job market
The job market here remains extremely attractive, with major healthcare, education, and government employers. While the technology industry has experienced some setbacks recently, healthcare, education, and government contracts remain steady and strong. The healthcare industry particularly continues to experience a growing need for additional workers, meaning job opportunities for new residents should remain abundant throughout 2023.
While the job market and population growth don’t tell you how much your house will sell for or how fast it will move, it tells you how attractive the area is to new buyers. The positive trends in the housing market set Placer County up to remain an attractive place to live.
2023: A year of growth
While 2023 won’t erase all of the setbacks 2022 brought to the real estate market, it’s a much more promising year. Most of the predictions show improved opportunities; whether it’s buyers having more substantial negotiating power, or properties increasing in value, the gains are clear. This year promises a year of interest rates lowering and stabilizing and more houses selling. It’s an exciting turn and an excellent opportunity to invest.
If you’re ready to take advantage of the better market in 2023, Haus Homes Realty Group is here for you. Kristen Haus is knowledgeable about Placer County, providing her clients with the inside scoop. She’s a skilled negotiator and marketer, ensuring her clients get the best experience possible with the best outcome for their needs.
