The Sacramento area real estate market is showing signs of softening as 2025 comes to a close. Home prices have seen a slight dip, and properties are remaining on the market for longer periods. This shift presents a mixed picture for both buyers and sellers in the region.
Key Takeaways
- Median home prices in Sacramento fell by 3.36% to $575,000 year-over-year.
- Average time homes spend on the market increased by nearly two weeks.
- Sellers are withdrawing listings, leading to reduced inventory.
- Buyers are more selective, demanding better pricing and condition.
Sacramento Home Prices Experience Decline
Median home prices in the Sacramento area have decreased. Data from November 2025 indicates a 3.36% drop compared to the same month in the previous year. The median price now stands at $575,000, down from $595,000.
The average home price also saw a reduction, falling by nearly 3% to $645,773 during the same period. This suggests a broader trend of price adjustments across the market.
Price Changes
- Median Price: $575,000 (down 3.36% year-over-year)
- Average Price: $645,773 (down nearly 3% year-over-year)
According to Ryan Lundquist, a certified residential appraiser, lower rates and prices offer some good news for buyers. However, this has not yet led to a significant increase in buyer activity.
"The good news for buyers today is rates are slightly lower right now and so are prices," said Ryan Lundquist. "Granted, it hasn’t been enough to attract a flood of buyers off the sidelines, but this seems like a step in the right direction."
Affordability Remains a Challenge
Despite the slight price dip, affordability remains a major hurdle for many. Mike Frank of Community Lending Group highlights the ongoing issue of insufficient and unaffordable housing.
High monthly payments, even with slightly lower interest rates, make homeownership difficult for first-time buyers and those looking to move. Frank noted that many individuals are not experiencing a thriving personal economy.
Market Context
The fundamental issue in the Sacramento housing market is a lack of affordable housing. Construction costs and associated fees need to decrease to ease the slow pace of sales.
Homes Stay on the Market Longer
The time homes spend on the market has increased significantly. In November 2025, properties took an average of 54 days to sell, a notable rise from 41 days in November 2024.
The median number of days on the market jumped even more dramatically, from 21 days to 33 days year-over-year. This represents a 57.1% increase.
This extended selling period suggests that sellers may be overpricing their homes, while buyers are taking more time to make decisions. Buyers are now more cautious and selective.
Days on Market
- Average: 54 days (up from 41 days a year ago)
- Median: 33 days (up from 21 days a year ago)
Realtor Kelly Pleasant observed that some homes are still sitting unsold. He believes sellers need a clearer understanding of the current market conditions.
"You still have homes that are sitting out there," Pleasant said. "I think it’s a lack of sellers having a picture of what the market is right now."
Buyer Selectivity and Negotiations
Buyers are increasingly picky about property condition, price, and location. They are willing to wait for a home that perfectly matches their criteria rather than settling.
This trend means sellers must price their homes correctly from the start. They also need to be open to negotiating with buyers throughout the escrow process to secure a sale.
The number of cash sales saw a slight increase, accounting for 16.2% of transactions in November 2025, up from 14.9% a year prior. However, overall sales volume dropped by 4.4% compared to the previous year.
Sellers Withdrawing Listings
A significant trend in the Sacramento market is the reduction in new listings. Many sellers have chosen to hold off on listing their homes, especially since April.
The number of sellers bringing homes to market has decreased over the past four months compared to the same period in 2024. This reduced activity points to increased uncertainty among homeowners.
Seller Activity
- Canceled Listings: Approximately 30% more canceled listings in 2025 compared to 2024.
- Inventory: 6,428 homes for sale in Sacramento area (Zillow, November 2025).
Ryan Lundquist noted that sellers have also actively pulled existing listings from the market. There are about 30% more canceled listings so far this year.
This behavior leads to a reduced selection of homes for potential buyers. Many sellers might be waiting for the new year, hoping for more favorable market conditions before relisting their properties.
Kelly Pleasant also suspects that sellers are waiting to see what the new year brings. This collective waiting game contributes to the current market slowdown and lower inventory levels.
Looking Ahead: A Slow Slog
The Sacramento housing market is currently in a "slow slog," according to Mike Frank. While interest rates are slightly lower, high overall costs continue to constrain buyer demand.
The market requires adjustments, particularly in new home construction costs, to improve affordability. Until then, buyers will likely remain cautious, and sales activity may continue at a slower pace.
For sellers, understanding the current market reality and pricing competitively is crucial. Buyers, in turn, have more leverage and time to find the right property.
