The cooling trend in Sacramento area real estate that began nearly a year ago is continuing and moving the housing market toward a much needed equilibrium point.  Unfortunately few seem to understand this.  Despite a slight uptick in activity during August, September saw another decrease in sales and though inventory remains high it too is finally beginning to scale back.  Here are a few quick statistics of interest from the Sacramento Association of Realtors. 

• Closed escrows of single family homes in September were down 38.1% from a year ago. 
• The median sale price of a single family home was $363,000 which is down 5.7% from September 2005
• Closed escrows of Condos/PUDs in September were down 36% from a year ago.
• The median sale price of a Condo/PUD $237,000, 4% lower than September 2005

The Sacramento market was one of the hottest housing markets in the nation the past couple of years so while this may look gloomy to some it is simply an overheated market moving back toward equilibrium.  Despite our sluggish sellers market our Sacramento economy remains stable and interest continue to be very low.  Based on the economic stability of the region and the strength of real estate nationally it is my observation that the primary forces causing skepticism in the market is psychological.  That is, the constant drumbeat in the news of gloom and doom in real estate combined with the large number of people who are too late in trying to capitalize on the phenomenal appreciation we have experienced the past several years creates a misinformed public who perceives the negative news as reality.  And, the dynamic continues.  However, once the housing market reaches the equilibrium point between buyers and sellers the standoff will end and we will move into a "normal" market for the first time in several years.  And that's my two cents!