Sacramento Appraisal Blog

What’s the housing market going to do in 2026? Nobody has a crystal ball, but here are some things on my mind. Scroll by topic or digest slowly. Anything to add? 

UPCOMING SPEAKING GIGS:

1/13/26 Residential RoundUp (register here ON ZOOM)
1/14/26 Windermere EDH / Placerville
1/20/26 Carlile Group (private event)
1/21/26 Toll Brothers event (TBA)
1/22/26 DJ Lenth event (private)
2/11/26 San Joaquin County presentation (TBA)
2/12/26 Answer Home Loans Event
2/20/26 PCAR 
2/26/26 NAPRM Luncheon
3/19/26 Yolo YPN event
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR 

NOTE: The housing market isn’t the same in every part of the country. I hope you get some value here, whether you’re local or not. And remember, these are my ideas for now. Let’s see what the market does. 

THINGS TO WATCH IN 2026:

We’ll get more buyers: The housing market will still feel stuck, but a little bit less stuck in 2026. My projection is we’ll get more buyer volume back since both rates are prices are lower than one year ago. I’m not talking about an avalanche of demand, but a smidge (hopefully a few percent). I’ve heard projections of 15-20% more volume, but that seems ultra-optimistic.  

Buyer sensitivity will persist: Buyers are going to take their time and be picky about price, condition, and location. Why? Because they can, and it’s costly to buy. This is where sellers need to listen and be more like builders by lowering the price and offering concessions if needed.

Lifestyle will be the big motivator: Many people are frozen in today’s housing market, but lifestyle will be the trump card for why most people move. Be on the lookout for those needing larger homes, smaller homes, divorcing, moving out of state, getting married, having kids, retiring, job relocation, etc… Also, keep an eye on economic carnage since debt problems could cause some to need to move (not just want to move). 

We’ll get more listings: The last half of 2025 was a weird vibe where sellers backed off the market. This was true nationally and locally. I’m not talking about a seasonal slowing either, but sellers simply not listing homes as much. In 2025, locally we had 8% more new listings than 2024, but the bulk of that growth happened during the first half of the year. When it comes to 2026, I have to think that some of the would-be sellers who didn’t list in 2025 will consider listing, and others who cancelled listings last year may re-list. In short, I’m optimistic we’ll start to see sellers come back since improved prices and rates can be a motivator. However, I’ll admit I’m concerned about the trend of pulling back, and more economic uncertainty could inflame that. 

Sellers will do better at pricing: We’ll still have many horror stories, but sellers now have the massive benefit of a prior year of the housing market softening. This is something that can motivate some sellers to price more reasonably since the cat is out of the bag that we had a softer year. Moreover, we’re another year removed from 2021 aggressiveness, so hopefully it’s not as easy to stay stuck there. The hard part is some sellers don’t have any room to sell lower without doing a short sale. 

Insurance will still be a big problem: Insurance in outlying areas has been really expensive, but it’s becoming problematic in the suburbs too with rising rates and owners being dropped from policies sometimes. We saw FAIR Plan policies in California increase again in 2025, and this is affecting consumer behavior on how much to pay, where to live, and figuring out how to hold on. 

Assumable mortgages will become more common: I project we’ll see an uptick ahead as we get more FHA and VA owners with low rates listing their homes. In today’s market, buyers are looking for any possible edge, and if prices soften more, an assumable mortgage is an even better product for buyers since the difference between the loan and price just got smaller (the buyer has to cover the difference). Last I checked in September, about 13% of listings at the time sold previously between 2020 and 2022, so there are more opportunities for assumable situations. I still view assumable loans as eye candy in a way because they aren’t always easy or guaranteed, but they should happen more regularly this year. I encourage real estate friends to get familiar with the process and add this to your bag of tricks.

It’ll be multiple offers or crickets: Properties will get quick attention or they’ll linger. Buyers are picky about condition and upgrades, so they’ll pounce on homes that check all the boxes of what they’re looking for, while avoiding listings with issues. If selling a home, I suggest making it as tidy as possible and button up any cosmetic issues if you can. Buyers notice everything in today’s market, so eliminate reasons for them to say NO.

We’re starting the year softer: Even though sellers backed off during the second half of 2025, we still have more active listings today than last year. This means we’re beginning 2026 at a softer place than 2025. Look, the growth in supply is pretty modest here (mostly since sellers have backed off lately), but supply still grew more than demand last year, which is key to keep in mind when listing a home.

Condos are poised to be softer: I expect the condo market to be softer than the detached market this year (just like it was last year). Rising HOA fees has been a big deal for condo buyers, but there could be a buyer preference issue happening too where buyers at today’s prices are more drawn to a home with a yard instead. 

Sorry emo kids, the color of the year isn’t black: I don’t think Pantone’s color of the year defines trends for the housing market, but I’m always interested to take a peak. Honestly, I like the description of the Cloud Dancer color, “a symbol of calming influence in a society rediscovering the value of quiet reflection.” Maybe I like it because this feels like the opposite of what is happening today. Haha. 

Rates aren’t the only show in town: There is so much attention about mortgage rates potentially dropping in 2026 (I don’t predict rates), and I think it’s easy for people to have tunnel vision about rates, but let’s not forget increasing economic uncertainty, the job market not doing great, and people wonder what the future holds. In short, consumers have more on their minds than just rates when it comes to making decisions about buying or selling a home.

Prices won’t crash, but they will soften: Last year we entered an era of softening in the housing market where prices began to dip in many parts of the country (not all parts), and I’m expecting this to continue unless something interrupts the trend. Locally, we saw supply grow more than demand, and that’s what I expect to see this year too. If sellers pull back though, let’s revisit this projection. Most metrics locally are down about 2-3% from one year ago through November. Ultimately, unless something changes this softening era, it seems reasonable to see prices dip more. It feels like we hit a real inflection point this past year, and we are in the midst of this trend unless something takes us out of it. 

There won’t be a price crash in 2026 because we don’t have enough supply to cause quick change. This doesn’t mean prices can’t still go down though. Check out this visual. Do you see why prices haven’t been able to drop sharply? The housing market has felt very stuck. 

Investors will count the cost: Investors will ask whether it still makes sense to hold the property in light of softening prices, rising insurance rates, rising HOA fees among condos, and other issues. All of these things can affect whether the investment makes sense. 

Homes adjacent to new construction will feel it: In previous years, new construction had a captive audience with glowing sales numbers, but that vibe changed in 2025. Builders in many portions of the country had to lower prices and offer fat concessions to entice consumers. And still, builders have struggled to sell. This is something to watch on its own, but newer neighborhoods adjacent to brand new homes are going to feel the softer new homes market the most because what builders do can affect what buyers are willing to pay for existing homes.

More strength at the top: The market isn’t the same in every price range, and the top of the market has been stronger. I hear this sentiment when talking to others, but I don’t have a national stat here. Overall, we had less than 1% growth in volume in the region locally, but the top of the market saw 8% growth in the number of sales. I expect this trend to continue in 2026 as buyers at the top are less influenced by what happens with rates, and they have money to make moves. 

Expect more short sales: We are starting to see more situations with negative equity. This only makes sense since prices are down locally about 7-8% from the peak in mid-2022. This hasn’t been a glaring issue, but it’s showing up more. If prices persist to soften, it only makes sense to see more short sales. On a similar note, we’ve seen economic carnage show up in transactions this past year as some people sold to get out of debt. 

Pulling comps will still be tough in 2026: I expect volume to improve, so we’ll actually have slightly more comps, but it’s likely not going to be enough to really notice a huge change. Remember, closed sales tell us what the market used to be like, and listings and pendings tell us what buyers are willing to pay right now. Agents and appraisers are going to have to keep asking how the market has changed since the comps sold. 

Realizing we’re in this for longer: Buyers and sellers sitting out is not just a temporary thing for a year or two. This is going to be a longer process, and 2026 is going to reinforce that (even though we hope to get more activity than last year). It’s sobering that closed sales volume has now been subdued for a longer period of time than what we saw during the Great Financial Crisis. Crazy, right? 

Okay, that was a long post. Maybe the longest one I’ve written. But hey, there is so much to talk about. I hope this was helpful. 

Practical advice for real estate friends: 

• Don’t wait for low mortgage rates to save your business.
• Focus on opportunities instead of negativity. 
• Don’t let the market dictate your emotions and wellbeing.
• Focus on building a bigger network. Keep getting in front of people.
• Find ways to cultivate joy in life, and don’t forget about pursuing friendship and hobbies this year.
• Build deep relationships. That’s what this business is about.
• Run toward the challenge of the market. Don’t get paralyzed in fear.
• Keep hanging on because volume has improved a bit.
• Think about how you can diversify into portions of the market that are doing better than others. Study neighborhoods and price ranges so you know which areas are doing better and worse.
• Don’t lose credibility by promising the future. Share ideas, but don’t promise something you cannot control.
• Stay committed to pushing out regular content that focuses on answering questions consumers have. 
• Stop believing the market is only good if prices are up. That’s a fallacy. The market is never always good or always bad for everyone at the same time. Who has incentive to participate right now? That’s what matters. 
• Study the local market and cultivate local expertise. Interact with local data more than ever because you’ll get clues for how to talk about the trend and where to focus business. Local data can be super interesting to consumers also. 
• The good news is there isn’t just one way to do this.
• Be yourself. You don’t have to do things like anyone else.
• Put your game face on for 2026. That’s what kind of market it is, and it’s going to require intentional focus. 

Taking mental health seriously: I want to end on this, which is something I’ve shared the last three years in my housing outlook. If you’re feeling depressed after reading housing articles or social media posts, maybe it’s time to distance yourself, do some inner work, or unsubscribe (even from my blog). My advice? Take your mental health seriously by cultivating contentment regardless of what the housing market is doing. If you’re only happy if the market is up too, that’s something to figure out. I find it’s hard to stay grounded today with so much sensationalism and such a lopsided focus on what the future holds. The wild part is mostly everyone is wrong about their predictions because it’s freaking difficult to know the future before it happens, so there is so much worry wasted on stuff that often doesn’t even pan out. Friends, please be intentional about taking care of yourself. Nobody else can do that for you.

Thanks for being here.

Questions: What do you think is going to happen this year? What stood out to you most above? 

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