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The problem with comps in 2026 (and the good news)

December 3, 2025 By Ryan Lundquist 6 Comments

We have a problem with comps in real estate. There just aren’t that many, and it’s made it much more challenging to figure out value. Yet, this could get a little better in 2026. Let’s talk about it.

LAST MARKET UPDATE IN 2025 IS NEXT WEEK:

I’m doing my last market update of the year. This is a free and catered Realtor lunch & learn thanks to SAFE Credit Union. There is SO much to talk about. I want everyone to leave energized for 2026. Please RSVP here.

UPCOMING SPEAKING GIGS:

12/9/25 Downtown Regional MLS Meeting Q&A
12/10/25 SAFE Credit Union (RSVP here)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

WE’VE HAD A COMP PROBLEM FOR THREE YEARS:

We’ve been missing about 30% of the normal number of sales. This is true both locally and nationally. This chart from Calculated Risk shows the gravity of the situation as we’ve been flirting with historically low volume for three years now. And what this means is we’ve had 30% less comps to choose from. Yikes!! This is exactly why it’s been challenging to value properties. Here’s a post with comp tips in the midst of limited sales.

THE GOOD NEWS

It seems like many housing data sources are projecting stronger volume next year in light of the perception of lower mortgage rates ahead. In fact, NAR is predicting a 14% increase in the number of sales. My projection locally is we’re going to get more volume, though 14% seems optimistic (I hope I’m wrong). Ultimately, the positive here is there are likely going to be more comps to choose from in 2026.

THE BAD NEWS

We’re still poised to have historically low volume until there is a sharper change with affordability. The housing market simply feels stuck, and there isn’t a mechanism to quickly increase the number of buyers. In other words, it’s not going to be a market with robust volume for a long time since it’s going to take years to get buyers and sellers back. Yet, if the projection is correct about next year, it’s going to be something positive to get even a little more volume back. This isn’t standing ovation news, but maybe a golf clap is in order. And for my real estate friends, this is a solid reminder to stay focused.

SOMEONE WAS MAD AT ME FOR USING OLD COMPS

I had someone angry with me recently that I used much older sales as comps in a private appraisal. I tried to explain my rationale, but the person wasn’t willing to listen. Here’s the deal though. If there aren’t any recent comps, then we have two choices. Use older sales and adjust for how the market has changed, or go out further into other markets for more recent sales (doable, but not always ideal). In real estate textbooks, this issue doesn’t come up since there are always three model match sales over the past 90 days, but the real world is different. The truth is valuations today look a bit messy since we don’t have the luxury of ample recent sales. We simply have to do the best with what we have. Remember, when the market changes, how we do things sometimes has to change also.

OLDER COMPS AREN’T ALWAYS BAD COMPS

When looking at price movement, it’s not always bad to use older sales anyway since prices have been pretty flat for a few years now. There are times when I use a sale that needs a downward adjustment since the market has softened a bit, but other times I might select a sale from a couple years ago that doesn’t need any adjustment since the market is basically willing to pay the same price right now. I’m going to talk about this more soon, especially since there are some people who purchased four years ago with very minimal equity (or sometimes none).

Thanks for being here. I hope this was helpful.

LEAVING COMMENTS: The captcha is not working perfectly. If you open up a new browser, that should solve the issue. It’s been a problem to comment when clicking from my weekly email. My apologies.

Questions: What are you doing for comps these days? Do you prefer to use older sales or go further out into other neighborhoods?

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Pass the turkey to the guy talking about home prices

November 25, 2025 By Ryan Lundquist 13 Comments

Half the homes in the country lost value since last year. This is a big headline from Zillow, and I want to unpack that today before the holiday officially comes. I think it’s important in real estate to understand what people are saying about the market.

UPCOMING SPEAKING GIGS:

12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

HOUSING CONVERSATION AT THE DINNER TABLE

I don’t recommend it, but if conversation isn’t spicy enough on Thursday while you’re with your people, here are some housing topics to bring up. Which one would rile up grandpa the most? Haha.

In all seriousness, I hope you deepen relationships this week. May you be filled with deep joy regardless of your circumstances.

ZILLOW’S SENSATIONAL HEADLINE

Zillow published a piece last week stating 53% of homes in the United States lost value over the past year, and it’s gone viral online. What really caught my eye was the locations with the most losses. Check out Sacramento ranking third on the list with 88% of homes said to have lost value – only behind Denver and Austin. I’m not surprised to see Sacramento make the cut since I’ve been talking about softer prices for many months now. But it’s also easy to get sensational with this headline because it sounds worse than actual market change.

If you’re in one of these top markets, what do you think of these stats?

ACTUAL VALUE DECLINES AREN’T SENSATIONAL

In short, 88% of homes losing value sounds really big, but how much did prices actually go down? Well, Zillow’s price index for Sacramento is down 2.3% from one year ago, and traditional metrics are hovering somewhere around that level depending on the month (they’re bouncing around). I like to say it’s been a slow burn for price change despite glaring affordability issues. Supply just hasn’t built enough to create quick change. I’m not sugarcoating here. I’m only pointing out the 88% headline sounds way more sensational than actual market change. All that said, a positive here is affordability has improved slightly for buyers. This isn’t a major change, but a little relief is welcome.

By the way, I’m not saying Zillow’s numbers are perfect for Sacramento either, though their numbers have been pretty reasonable so far compared to other metrics I’m watching. I’ll keep reporting on many different metrics to help us have a wide view of the trend. I’m also not a Zestimate fanboy, but it’s interesting to consider what percentage of Zestimates have dropped below last year as shown above.

A BIG THANK YOU

Thank you so much for this year. I am beyond grateful for the relationship we’ve built and the business we’ve done together. Thank you for your continual support. I know this has been a tough time in real estate for so many over the past few years, so I don’t take it for granted that I’m surrounded by amazing people who have blessed my life and business.

Thanks for being here. I hope this was helpful.

Questions: Which housing topic are you bringing up at Thanksgiving? And does anyone else feel like turkey is overrated?

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Is it still a bedroom if the closet is removed?

November 20, 2025 By Ryan Lundquist 32 Comments

If the owner removes the closet, can it still be counted as a bedroom? I’ve had this question a few times this month, so let’s talk about it. I’ve written before about closets and the definition of a bedroom, but today I want to just focus on eliminating the closet. I’d love to hear your take in the comments.

UPCOMING SPEAKING GIGS:

IS IT STILL A BEDROOM IF THE CLOSET IS REMOVED?

This can be a tricky question because there are so many different scenarios, and each situation might not perfectly fit my answer. In short, if all an owner does is remove a closet, I lean toward saying it is still a bedroom. Let’s be logical. Imagine if you had a four-bedroom home and took out the closets. Is it now a zero-bedroom home? Absolutely not. That sounds absurd because it still has four rooms intended as bedrooms. Yet, it does now have some functional issues since buyers walk through thinking, “Where the heck are the closets?” We just wouldn’t go so far as to say bedrooms no longer exist, right?

If the cost-to-cure is minimal to add a closet, let’s not overthink this issue because it’s unlikely that buyers would deduct a significant amount in value when the cost-to-cure is so small. What we don’t want to do is get so caught up on a closet technicality that we fail to think logically. So, if we now compare a three-bedroom home to two-bedroom comps, we could be choosing the wrong comps and missing the way buyers actually perceive the home. Don’t get me wrong. There could be a big difference in value sometimes between a two-bedroom and three-bedroom home, but if the only difference is literally a closet, that’s not the same thing as comparing a three-bedroom and a traditional two-bedroom that doesn’t have any extra bedroom potential. However, if an owner removes a closet by expanding an adjacent bathroom into that space, there could be a functional problem in an older home with smaller rooms already. This is where it can get weird if adding a closet would mean the bedroom is now tiny, so I get when real estate professionals use good professional judgement at times when deciding if an area is a bedroom or not.

Ultimately, many people say closets are required because that’s what they’ve always been told, but there really isn’t an overarching rule that says so. However, it’s likely the market requires them (or local code). So, on one hand we don’t want to minimize the importance of a closet because it’s normative and expected among buyers. On the other hand, let’s not go to the extreme of being unable to think like buyers who would use logic and find the path of least resistance by spending a minor amount of money to add a closet.

All that said, I wouldn’t split hairs if a colleague wanted to call it something else besides a bedroom because this feels like a gray area where there is room for interpretation. In real estate, we often want things to be black and white and clearly defined, but that’s not always possible. I think the most important issue here is that we’re considering comps with the same room count and functionality (and not being too rigid about removing a closet). No matter what, it’s really important in appraisals and real estate listings to explain what is at the house and be as clear as possible.

Here’s a reel I made on Instagram to talk about this post.

View this post on Instagram

A post shared by Ryan Lundquist (@sacappraiser)

ADVICE TO OWNERS

Don’t remove closets. It makes it awkward, and in today’s market buyers are very picky about everything. If a home has too many oddities, it creates roadblocks for buyers to say yes. Look, do whatever you want. It’s your palace. I’m just saying keeping the closets is a good move. On a related note, people sometimes convert a three-bedroom home into a two-bedroom home by combining bedrooms. That’s not something I advise either from a resale perspective (but do as you wish).

WHAT ABOUT A BUILDER DEN OPTION?

If a home was built with a den, can we consider that a bedroom? Well, we just called it a den, and that signifies it’s something else besides a bedroom. That’s sort of like when someone wants to include a Sun Room as square footage. Bro, you just called it a Sun Room, which tells me it’s something else and probably not square footage. Anyway, the den option almost feels like a bedroom because it has space for a closet and a window to the exterior, but being open to the rest of the house with no privacy makes it a den instead of a bedroom. In this situation, buyers might recognize the potential to convert the area to a bedroom, but it’s also not as cheap as adding a closet since now we have to build an entire wall including a door. In short, I definitely wouldn’t count a den as a bedroom with a situation like this because it doesn’t feel like a bedroom (and buyers wouldn’t call it a bedroom).

EWW, YOU SOUND SO SUBJECTIVE TODAY

I realize my post today feels a bit subjective, but this is what it’s like in the trenches of real estate where we have to use good professional judgement and make subjective calls supported by reason and market perception. I find it’s easy to want to impose one rigid definition on every property, but that just doesn’t work.

DON’T GET TALKED INTO SAYING IT’S A BEDROOM

One final thing. Be careful about being talked into considering an area as a bedroom when the space clearly doesn’t feel like a bedroom or meet the general requirements. At times, sellers will add a closet to an attic and say it’s a bedroom, but it really isn’t permitted square footage. Or imagine an owner converts a den to a full bedroom, but the septic tank is not big enough for an extra bedroom (yikes). Or an owner might add a closet to an office in the interior of the layout, but it doesn’t work as a bedroom since a bedroom needs direct egress to the exterior of the house.

Thanks for being here. I hope this was helpful.

Questions: How would you answer this question? Is there anything I missed?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

50 year mortgages & a housing market update

November 12, 2025 By Ryan Lundquist 53 Comments

A few days ago, President Trump shared the idea of a 50-year mortgage, and it has set the housing narrative on fire to say the least. Let’s talk about this today without getting political, and I also have a big market update with stats for ten counties. Skim quickly or digest slowly.

UPCOMING SPEAKING GIGS:

12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR

50 YEAR MORTGAGES: WHY I’M TALKING ABOUT THIS

I was talking about the fifty-year mortgage this weekend, and someone told me he was disappointed. I think the perception was that I was being anti-Trump because of my opinion, but real estate and politics collide sometimes. Besides, show me any place where housing is being discussed and this topic is not coming up. A few weeks ago I wrote about a tax on the highest prices in Sacramento, so was I attacking liberal policy then? In April 2021, I said mortgage rates were too low, and I suppose that could be interpreted as political. In fact, a loan officer unsubscribed and called me woke. Look, my goal is to talk about anything that can affect the housing market, and I’m hopeful we can have conversation without getting political.

MY THOUGHTS ON A 50-YEAR MORTGAGE

Here’s my take. A fifty-year mortgage can work for some people, but I’m not a fan overall for the general public since this doesn’t do anything meaningful for affordability as it’s a product that can help keep prices higher. This feels like a Band-Aid rather than a solution, and I would much rather see politicians talk about how to unlock supply rather than increase demand or debt. This essentially helps buyers purchase at higher prices today, so it seems like a product that actually favors sellers way more than buyers. I’m concerned about consumers being tied to debt longer and first-time buyers in particular having very little equity after a decade of living in the home (see an amortization calculator). Look, if the market appreciates over time, then maybe less equity is no big deal, but if it doesn’t, that’s problematic. Ultimately, the monthly savings look negligible with a fifty-year mortgage, so it doesn’t feel like a viable solution for the masses. Could it work for some? Of course. Is it good if we have more options in the housing market? Maybe. But we need the right type of policy. Not just any policy. I am all for stirring more housing demand, but not at any cost. Imagine if we brought back all the loans happening before the housing bubble burst. That would absolutely create more demand, but it wouldn’t be a reasonable way forward. This goes to show that we want the right policy. Not any policy.

What do you think? What are the positives and negatives? I’d love to hear in the comments. And please keep it civil and argue about politics elsewhere.

FIVE THINGS TO KNOW ABOUT THE HOUSING MARKET

1) PRICES CONTINUE TO BOUNCE AROUND

“We’re so back.” Friends, the median sales price is flat this month after having been down for five months. But please don’t say the market is back. My advice? Recognize the median can bounce around. I wrote about this last week, and anyone who wants to be a real estate expert needs to be able to talk about this stuff. Otherwise, the housing narrative from month to month is going to sound incredibly manic.

Price stats remind me of Nintendo cheat codes from the ’80s. Prices are up, down, up, down, flat, etc…. For Nintendo, you could get thirty lives in the game Contra if you pressed, “Up, Up, Down, Down, Left, Right, Left, Right, B, A, Start.”

2) THE MARKET IS SOFT, BUT NOT AS SOFT

We’ve had a clear pattern of more sellers coming to the market over the past couple of years, but not so much over the two quarters. Some people look at the decline and call it seasonal, which I understand, but it’s more than that. We were consistently outpacing 2024 during the beginning of the year, and now we’re not. My thesis is sellers have backed off due to economic uncertainty. Whatever the reason, this is why the market feels soft, but not as soft as it did months back when supply was really growing. I’m not saying it’s aggressive out there, but it’s not as dull.

3) SALES ARE JUST AHEAD OF LAST YEAR

The number of sales is just ahead of one year ago. I think we can give this a light golf clap and be thankful for slightly more, but otherwise let’s be real that we’re having a lackluster year of closed sales. I’m not being negative, but realistic. I did a reel about this where I talked about what it’s like emotionally to work in real estate. Friends, put your game face on, position yourself for the market that is here, and be logical that we’re poised to continue to have low volume until we see a sharper change to affordability.

4) IT’S HIBERNATION TIME VERY SOON

Sellers and buyers start to hibernate around the holidays as December is almost always the low point for the number of new listings, pendings, and closed sales (sales bottom in January, but these homes got into contract in December). Anyway, it’s important to be in touch with the seasonal rhythm so we can know what to expect and spot anything abnormal. For buyers, be looking for listings that come to the market at this time of year because sellers are sometimes willing to deal. By the way, this doesn’t mean the market is completely dead for the rest of the year either, so save your hate mail. All I’m saying is we’re about to see the low point of supply and demand for the seasonal market.

5) A GOOD WAY TO DESCRIBE THE HOUSING MARKET

People sometimes ask what 2025 feels like, but it’s sort of its own thing. It’s not 2021. It’s not 2007. And it’s softer than the normal trend in a year like 2019. I think this is a really good way to describe the market right now.

And now some recap stats for anyone interested.

YEAR-OVER-YEAR:

Take price stats with a grain of salt sometimes since they can bounce around a bit right now. But be sure to look at the average home size (last row in each visual). Sometimes stats might be up, but could that be due to larger and more expensive homes selling?