The housing market has some of the worst sales numbers we’ve ever seen, but that’s not the vibe at the very highest prices. Today, I want to talk about the strength we’re seeing in the luxury market in Sacramento, and I’d love to hear from others around the country. Are you seeing a similar dynamic?
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UPCOMING SPEAKING GIGS:
4/24/25 KW EDH (register here)
4/28/25 Socotra Capital (Zoom)
4/30/25 Anthony James Office Meeting (private)
5/8/25 Empire Home Loans (details TBA)
5/13/25 PCAR
5/21/25 Grounded Real Estate
6/5/25 Auburn Marketing Meeting
6/12/25 Realtist of Sacramento
9/26/25 PCAR
11/4/25 SAR Main Meeting
THE TOP IS A DIFFERENT ANIMAL
Buyers at the very highest prices are less sensitive to mortgage rates around 7%, so volume has been stronger through the years compared to so many other ranges that are down 30% or more from the pre-2020 normal level. If anything, the luxury market locally has awakened in recent years with so much new construction in places like Loomis, Granite Bay, and El Dorado Hills. This is a good reminder that not all parts of the market have the same exact trend.
FLEXING AT THE TOP IN 2025
Volume in 2025 so far has been strong above $1.5M in the Sacramento region over the past few years. Keep in mind early 2022 had strong volume for the entire market before rates doubled soon afterward. By the way, El Dorado Hills has the most sales since 2019 above $1.5M.
Above $2M in the region:
And above $3M in the Sacramento region. As we can see, there aren’t many sales at this range, but it’s been a strong year at this price point.
HOW MANY OFFERS DOES THE HIGH END GET?
It depends. The average number of offers in Q1 above $1.5M is 1.6 offers, but the higher you go in price, there aren’t going to be as many offers. 59% of the time, properties got one offer, and about 84% of the time there were 1-2 offers. In short, getting 1-2 is the general expectation (if you get any offers at all).
HIGHER PRICES GROWING MORE THAN LOWER
When looking at all price ranges, we’ve seen obvious growth at the top in the region above $800K. Yet, a massive portion of the market is below this amount, which is key to understand. Think about it this way. Above $1.5M was only 2.5% of all sales in the region in Q1 2025. And above $2M was only 0.8%.
THE MARKET IS NOT IMMUNE
Right now there is a ton of uncertainty in real estate, and it’s worth nothing the upper-end market is not immune from what is happening in the world (even though that demographic tends to be less sensitive to what is happening with mortgage rates). We definitely want to watch how growing economic uncertainty and the stock market could affect the highest prices. So, I’m writing about strength in this sliver of the market, but we need to continue to watch the trend.
THERE IS A NEW LUXURY LEADER IN TOWN (LOOMIS)
When looking at $3M and above, nobody beats Loomis for the number of sales at this level. Granite Bay still has the all-time record for sales above $3M since 1998, but Loomis has become quite the luxury haven over the past few years. Does anything surprise you about the list below?
Here’s a breakdown of sales above $3M since 2020. Keep in mind this includes MLS sales only – not private sales. There are a few Tahoe properties in there, but they don’t make a real difference in the stats. The % represents the category’s portion to the entire market. So, Granite Bay was home to 19.9% of all sales in the region above $3M since 2020.
GOING ABOVE AND BELOW
Let’s look at how properties above $1.5M sold compared to their original price. The story is definitely NOT the same for every escrow since it hinges on the credibility of the original price. 22.9% sold above, 63.9% sold below, and 13.2% sold at the original asking price (Q1 2025).
And in case you wanted to see the dollar amount too. Some properties sold about $200K above their original price, but others sold $400,000 below. One property closed $3.5M below the original asking price, and that sounds like a really viral headline, but meh. It was obviously priced way too high.
HOW LONG DOES IT TAKE TO SELL AT THE TOP?
Some properties go very quickly within the first two weeks, but there are others that sit on the market for hundreds of days. I think sometimes sellers at this range are testing out unicorn prices, and maybe they don’t even need to sell, so there is sometimes less urgency about actually attracting a buyer. The longer you’re on the market, the lower you tend to sell from the original price. This is a constant theme we see at all price points.
LOCATIONS AREN’T THE SAME
Above one million isn’t really a luxury price point for many areas, but I wanted to show the amount of the market that sold above this threshold in the first quarter of 2025. I dig this visual. It’s the first time I made it, and I hope it resonates. If not, it’ll be the last time I make it. Haha.
A LAST SUPER IMPORTANT NOTE
This is nerd stuff, but it’s so important for anyone talking about home prices. If there are more sales at the top of a market, could that affect the median price or average price? Yes, it can. For instance, in 2025 we’ve seen notable growth in the region above $600K, and that could essentially pull up the median price some. So, when we see price metrics showing growth on paper, some of that is more sales at the top of the market. This is exactly why we want to understand what is happening in various price ranges so we can have informed discussion.
My advice? Look to traditional metrics such as the median price, average price, and average price per sq ft (I publish those every month). Also, look to see what published price indexes like the one below show. And most of all, look to the comps to unpack the neighborhood trend. In short, it’s important to juggle lots of different numbers as we try to understand what the market is doing. What we don’t want to do is put all of our eggs in one basket.
Speaking of price indexes, check out Sacramento below. I’ve been talking about the flat market for a while, and I think Zillow’s index is reflecting that sentiment in their index. Traditional metrics have still been up a few percent at most in the region, but some individual counties are very flat just like this. Frankly, this image is probably something to show sellers who are struggling with pricing too high.
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Questions: What stands out to you about the higher-end market?
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