Is the Sacramento Real Estate Market Falling? A Local Appraiser Breaks It Down

What is really happening in the greater Sacramento real estate market right now? If you’ve been scrolling headlines, you’ve probably seen everything from “prices are falling” to “values are surging again.” It’s confusing.

Some data sources, like Zillow, show Sacramento home values down roughly 2–3% year over year. Other indices show the market as flat or even slightly up. So which one is right?

To cut through the noise, I sat down with local residential appraiser Ryan Lundquist of Sacramento Appraisal Blog. Ryan lives in the data every day, and we talked about what’s really going on with prices, why different reports disagree, and what it all means if you’re thinking of buying or selling in the greater Sacramento area.

Are Sacramento Home Values Actually Dropping?

The short answer: we’re in a softening phase, not a crash.

Ryan points out that most of the conversation online focuses on one or two numbers: the median sales price or the average sales price. Those are useful, but right now they can be a little misleading.

We’re seeing about 30–33% fewer home sales than normal in the Sacramento region. With that much less activity, the median and average are more sensitive to the mix of homes that sell in any given month. One month the median price can look like it dipped, the next month it nudges back up, and people start shouting “market rebound” or “market crash” based on a single line item.

When you zoom out, most of the more reliable price indices show the Sacramento region down a modest amount from last year, in that low single-digit range. That lines up with what Ryan sees when he pulls real comps: a market that’s softer than it was at the peak, but not collapsing.

Why Different Reports Say Different Things

So why do some charts say prices are up while others say they’re down?

It all comes down to what’s selling.

If more larger, higher-end homes close in a given month, the average price might jump even if the typical home didn’t actually gain value. The reverse is true if a lot of smaller homes sell. Ryan gave an example from El Dorado County where stats made it look like prices were up 5–10%. When he dug deeper, the homes selling that month were about 10% larger on average. The “price jump” was really just a “bigger house” jump.

His takeaway: you can’t just grab one headline number and assume it tells the whole story. You have to put on your thinking cap and look at multiple sources — Zillow’s index, other national providers, and then the traditional metrics — and see if they all point to the same general direction.

National Headlines vs. Hyper-Local Reality

Another big trap is focusing too much on the national median home price.

Nationally, prices might show as 1–2% higher than a year ago. But that number blends together dozens of metro areas. Some are clearly down, some are clearly up, and many are somewhere in between. When you average everything, you get a neat headline — but it doesn’t tell you what’s going on in Sacramento, Fair Oaks, Folsom, or El Dorado Hills.

Even inside our region, each pocket has its own story. The data in an El Dorado Hills gated community like Serrano is going to look very different from an older neighborhood in Sacramento or a condo community in Rancho Cordova. That’s why Ryan and I both preach the same thing: real estate is brutally local. National stats are interesting, but they don’t price your house.

Which Parts of the Sacramento Market Are Getting Hit the Hardest?

While the overall market shows a modest softening, not all property types are moving in sync.

• Condos: Many condo communities have taken more of a beating, especially older buildings or those with higher HOA dues. Not every complex is struggling, but as a category they’ve seen more downward pressure on price.
• New construction: Builders held the line on list prices for a long time, preferring to offer credits or incentives. This year, more of them have actually cut prices in addition to offering “fat concessions” like rate buydowns and closing cost credits.

That 4.99% or 3.99% “special rate” you see on the new-home billboard isn’t free. Often the builder is spending tens of thousands of dollars to buy down that rate for you. In some cases, buyers are also negotiating $70,000–$80,000 off the list price on top of those incentives, depending on the community and the timing.

Bottom line: if you’re shopping new construction, you may have more negotiating power today than you did a year or two ago — but you still need to understand the real value of the home compared to nearby resale options.

How Appraisers (and Smart Sellers) Really Determine Value

One of my favorite analogies from Ryan is this: if you sent a bunch of middle schoolers out to figure out what your house is worth, what would you tell them to do?

You wouldn’t say, “Just grab the highest price per square foot in the neighborhood and copy it.” You’d say, “Go find other homes that look and feel like this one and see what they actually sold for.”

That’s what appraisers do — and it’s how you should think as a seller.

• Start with truly comparable sales (similar size, age, condition, and location).
• Look at where current listings and pending sales are priced. Are they in line with past sales, or slightly lower?
• Avoid cherry-picking only the highest or most convenient comps just because they support the number you want.

In a softening market, buyers are especially sensitive to value. They’re not paying yesterday’s price just because a neighbor got it during peak frenzy. You want to be positioned where the market is now, not where it was.

Low Sales Volume Makes Pricing Harder (But Not Impossible)

With roughly a third fewer sales than normal, there are simply fewer comps to choose from. That makes the job harder for appraisers and agents, especially in custom or older areas like Fair Oaks where no two homes are alike.

Ryan’s approach is to first look at older sales in the immediate area and then figure out how the market has shifted since those closed. Only after that does he widen the search to nearby, competing neighborhoods. Sometimes there’s only one or two recent sales in a tight pocket, so he has to look back historically at how that pocket has related to another area, then study what’s happening there today.

It takes more time, more data, and more thought. In this market, there’s no such thing as a five-minute comp check done right.

What the Market Says About Your Price in the First 2–3 Weeks

Data is one thing. The live feedback on your listing is another.

From my side as an agent, the first two to three weeks on the market are critical. I pay close attention to:

• How many agent-requested showings we’re getting (not just open house neighbors).
• The quality of those showings — are they real, pre-approved buyers or just casual lookers?
• Whether we’re getting offers, second showings, or crickets.

If you’re not getting many showings and no offers while similar homes are moving, the market is telling you something. It might be price, condition, photos, or a combination — but it’s rarely “just the weather” or “everyone is waiting.”

In recent data, many homes are still selling in under a month. A solid chunk of the market goes pending in the first week or two when the price, condition, and marketing line up. Those are the homes that are positioned correctly. The rest tend to sit, chase the market down with price reductions, and become “stale” in buyers’ eyes.

Why Your Agent Matters More Than Ever

All of this is happening in a market where buyers have higher expectations and monthly payments are much larger than a few years ago. That makes the quality of the agents on both sides of the deal a big factor.

The right agent will:

• Set clear expectations about inspections, repairs, and what a typical report looks like.
• Prepare you for possible renegotiations once you’re in escrow.
• Keep everyone focused on solutions instead of surprises.

Good communication and realistic guidance can make the difference between a deal that stays together and one that falls apart over something fixable.

Which Homes Still Stand Out in Today’s Market?

Even in a softer market, some homes still draw a crowd.

Buyers are showing a clear preference for “special” properties — not weird, but unique in a good way. Think mid-century modern homes, thoughtfully remodeled houses, larger lots, pools, or homes that just have that extra edge in design and livability.

Because payments are higher, buyers are being pickier. They’re willing to wait for the one home that really checks the boxes: location, layout, upgrades, outdoor space, and price that feels fair. When that home hits the market and it’s priced right, it stands out and attracts strong interest quickly.

So… Where Is the Greater Sacramento Market Heading?

Here’s Ryan’s honest take: we’re in a softening phase, and it wouldn’t be surprising to see more softening ahead. That doesn’t automatically mean a crash. It means a market adjusting to higher rates, economic uncertainty, and buyers who are much more price-sensitive.

What happens next will be driven by a few big factors:

• Mortgage rates – Do they ease, stay elevated, or climb again?
• The broader economy – Do we see more job growth, or more layoffs and uncertainty?
• Buyer and seller psychology – How people feel about the future often shows up in the housing market before the headlines catch up.

Here’s my advice, whether you’re buying or selling:

• Make sure the payment and price make sense for your long-term life plan, not just today’s headlines.
• Don’t try to “day trade” real estate. Homes were never meant to be short-term flips for most people.
• Use local data, real comps, and a team that tells you the truth, even when it’s uncomfortable.

Want to Know What This Market Means for Your Plans?

If you’re wondering how all of this applies to your home or your home search, I’m happy to walk through it with you.

Text or call me at (916) 425-5786 or reach out through my contact form on this page. Let’s look at your specific neighborhood, your price range, and your timeline so you can make a smart move in today’s greater Sacramento market.

And don’t forget:

Again, this is Jake DaRosa with The DaRosa Real Estate Team, and my team and I would be honored to help you buy or sell in Sacramento, Placer, or El Dorado County.