The Sacramento real estate market is experiencing a significant shift that many industry professionals and homeowners are still struggling to accept. Recent data reveals a clear reality: in July 2025, over 44% of homes on the market required price adjustments to attract buyers, signaling a change in market dynamics not seen in over two decades.
Johnny Jennings, Real Estate Agent at Made 4 More Realty, has witnessed this change firsthand. His team, which averages one home sale every three days in the Sacramento region, provides a unique window into current market conditions that extend far beyond typical industry reporting.
“June of 2025 had the lowest sales volume since June of 1999,” Jennings notes, putting the current slowdown into historical perspective. “That counts the dot-com crash, that counts the Great Recession. There’s been steady growth, thousands, maybe even tens of thousands of homes have been built since 1999 in our market, and yet we’re still seeing sales volume at the lowest level it’s been.”
The most significant challenge facing the Sacramento market isn’t just reduced transaction volume, it’s the disconnect between seller expectations and buyer willingness to pay. Home prices have declined approximately 5.8% compared to the same period last year, meaning a $500,000 home is now worth closer to $470,000.
“Sellers still think they can get top dollar for their property, and buyers are unwilling to pay top dollar because they’re afraid they’re going to overpay,” Jennings explains. This standoff has created what he describes as a “challenging dialog to overcome with sellers right now.”
The problem is compounded by the fact that many homeowners have only experienced an appreciating market. “People who bought in 2009, 2010, 2012, 2013, they’ve only seen an appreciating market, and now it’s a new experience for them. Wait, my house is worth less than what my neighbor’s house sold for last year.”
This creates a particularly difficult situation for homeowners who need to maximize their sale price to make their next move. The psychological adjustment required is substantial, especially when recent comparable sales have become what local appraiser Ryan Lundquist calls “historical artifacts.”
“You’re like an archaeologist if you’re using comps from six months ago, because that’s not what the market is doing. That’s what the market did,” Jennings observes. “If you’re pricing based off what you’re seeing six months ago, you’re way behind the curve, and now you and your sellers are going to be trying to catch up. It’s like trying to catch a falling knife.”
Despite these challenges, successful transactions are still occurring, but they require a fundamentally different approach. Jennings’ team has developed what they call “proactive marketing” that goes beyond the traditional “three P’s” putting up a sign, listing on MLS, and hoping the home sells.
Their strategy includes contacting neighbors within the community, since four out of ten homes sell through friend, family, or coworker recommendations. They maintain a database of over 15,000 buyers and actively segment and contact potential matches for new listings. They also identify other realtors who may have buyers in the market and proactively reach out.
“Rather than passively waiting for our phone to ring, we proactively hunt down buyers for our clients,” Jennings explains. This approach has proven particularly effective given that 15-18% of Sacramento home purchasers come from the Bay Area, where they’re selling smaller homes for significantly higher prices.
The team also utilizes migration maps to identify where people are moving from and runs targeted advertising in those markets. “Everybody talks about how people are leaving California, but there are some people who are actually moving to California,” Jennings notes.
Current buyer behavior reflects the uncertainty in the market. Buyers are increasingly requesting closing cost concessions, reduced pricing, and assistance with down payments. Most importantly, they want move-in ready homes.
For sellers, flexibility has become essential. Those who try to “stretch the market” by pricing aggressively high find themselves invisible to potential buyers. “You’re not going to get showings. If you’re stretching the market, you’re invisible on the market.”
However, homes priced correctly are still seeing strong sales-to-listing price ratios, typically requiring only 2-3% price adjustments. The key is realistic initial pricing rather than the traditional strategy of starting high and coming down.
Within the Sacramento region, certain submarkets continue to outperform based on fundamental demand drivers. Areas with strong school districts, including Roseville, Rocklin, and Loomis, maintain higher demand levels. Loomis is outperforming other luxury markets in the area.
Folsom, the town referenced in Johnny Cash’s “Folsom Prison Blues,” represents one of the top places to live in California despite housing an active prison. These areas with established amenities and strong community foundations are proving more resilient in the current market environment.
For potential investors or homebuyers, Jennings advocates for an “even if” rather than “what if” approach. Instead of making decisions based on what might happen with prices or interest rates, he recommends ensuring protection regardless of market direction.
“If you’re looking to purchase a home as your primary residence, make sure that you’re purchasing it at a price point or with enough money down that should you need to relocate, you’re able to rent it out,” he advises. For investors, the strategy involves ensuring profitability even if prices decline further.
The fundamental principle remains: “The best time to plant a tree was 30 years ago. Second best time is right now. If you’re looking to make a move, just make sure you’re making those moves with the long game in mind.”
Industry veterans are watching three key factors that could inject certainty back into the market. According to a seasoned CEO with nearly five decades of real estate experience, resolution of international tensions, stabilization of trade policies, and interest rates settling around 6.5% could provide the certainty needed to bring buyers back into the market.
“Right now there’s more inventory than there’s been in a long time, historically low, but there’s more inventory, and buyers are still sitting on the sidelines,” Jennings notes. Recent developments suggest these conditions may be aligning, potentially setting the stage for increased market activity.
The Sacramento market’s current challenges reflect broader economic uncertainties, but they also present opportunities for well-positioned buyers and realistic sellers. The key to success lies in understanding that this market requires different strategies than the appreciation-driven environment of the past decade.
For real estate professionals, the current environment demands higher levels of service, more sophisticated marketing approaches, and greater client education. As Jennings puts it: “Real estate is an easy business if you work at it hard and a very hard business if you go at it easy, and that rings no more true than it does in today’s market.”
The Sacramento market’s adjustment period may be uncomfortable, but it’s creating a more balanced environment where informed decision-making and professional expertise provide clear competitive advantages. Those who adapt their strategies to current realities rather than past performance will find opportunities in this evolving landscape.
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