By Mike Hazlip—
Rapidly rising mortgage rates are causing a “massive impact” on the prices home buyers are able to afford, according to a regional analyst.
Real estate appraiser Ryan Lundquist told The Sentinel in an email Tuesday that over 36 percent of Citrus Heights homes on the market have seen a price drop, marking a sharp change from the over-heated housing market coming out of the pandemic. He said that number is in line with regional statistics that show 39 percent of all listings have a reduced price.
“Price drops are happening throughout all price ranges, which supports the idea that every single range is feeling the effect from higher mortgage rates,” said Lundquist, who regularly publishes analyses at www.sacramentoappraisalblog.com. “Buyers having to pay $500 to $700 more each month compared to what they would have paid just six months ago has made a massive impact on buyers being able to afford the market.”
Of homes that have seen a price reduction, a little over a third of them have dropped between $5-10,000 off list price and another 35 percent have dropped $10-$25,000 from the original list price, he said.
The Sentinel previously reported a million-dollar mansion saw a price drop after what the seller said was a lot line adjustment that reduced the size of the lot.
Two Citrus Heights sellers are hoping to break the $1 million mark with a home on Sycamore Drive listed at $1,299,000 and one on Holly Drive for $1,250,000. Both offerings feature large lots, with the Sycamore Drive property at five bedrooms, three bathrooms, and over 4,000 square feet.
The Holly Drive property has been on the market for more than 50 days, according to the listing. The Sycamore Drive home was re-listed June 9 after first being listed in November 2020 and a price change that same month. The listing was eventually removed December of that year, records show.
One home at 8087 Alma Mesa Wy. is now listed for $616,000 after initially being on the market for $627,000. The 1,806-square-foot, three-bedroom, three-bath home in Sunrise Oaks also offers a pool.
One reason Lundquist sees for the reductions is that sellers are listing for a market that has already passed them by.
“Sellers throughout the market seem to be infatuated with hot headlines from the past instead of current market conditions with fewer offers, fewer showings, and fewer buyers playing the game,” he said.
Lundquist pointed out that Bay Area cash buyers who added fuel to the local market six months ago might now be seeing what he called a “massive hit” to their portfolio, as stock prices and crypto currency values drop.
With the Citrus Heights market closely resembling the larger regional picture, Lundquist said it would be a mistake for sellers to think their property is an exception to the market that will attract a “mythical unicorn buyer.”
“I think the bigger takeaway is for sellers to recognize we’ve left that really aggressive market from early 2022 in the dust,” Lundquist said. “We are in a different market today where it’s simply going to take longer to sell.”