The real estate market in the area is still strong but it is starting to stabilize. What I mean by that is that we aren’t seeing the double digit sales price increases the way that we have in the past and this is a good thing for the market overall – if not necessarily for sellers. We’ll take a deep dive into the numbers for 3 key cities: American Canyon, Fairfield and Vallejo.
American Canyon RE Update
The American Canyon market still feels a little off kilter. There is a definite shift in the market although it’s hard to say what that is, exactly. After a huge drop in for sale properties in March, there is a slow trend toward normalcy. Currently there are 27 homes on the market (including one Rex home that isn’t on MLS – more on that later in the week). It’s good to see that these numbers are bouncing back after such a sluggish spring. Many agents that I’ve spoken to think that it was because of all the rain, but I’m not so sure. Pending sales are way up year-over-year and home sales are also up from last year for the same month (although they are down overall year-to-date). And then there’s the median price.
Median price has consistently been on the rise since January. Good stuff. It’s also up year-over-year. Also good stuff. What I find interesting, however, is that this doesn’t necessarily reflect an overall increase in home prices; rather it most reflects larger, newer homes for sale. What’s going on with Rancho & Napa Square? Fewer of these older homes are going for sale and when they do come up, they are languishing on the market. Last year Rancho homes were going for low-to-mid $400,000’s (with a few exceptions) but this year, when they are up for sale, they have completely retreated back to the mid-$400,000’s. These older homes are a bellweather for the rest of the American Canyon Market. If these homes catch fire this summer they will continue to put upward pressure on the rest of the American Canyon market but as of right now, it looks like they are staying put. We’ll continue to see increases in the prices but not like we have in the past.
The Vallejo market has cooled a bit over the past few months. It’s been in and out of realtor.com’s hottest 20 markets after being in the top five for a few years. Inventory is up from last year at this time but sales are relatively stagnant. Median home sales price is up about 7% year-over-year. Here’s what I find interesting, however; days on market for Vallejo is now at 45. That’s a 40.6% jump from last year at the same time. Now, 45 days is still a fast sell but it’s also 2 weeks longer than the 30ish it was last spring at the same time. The market is slowing down even though the inventory is still there.
The good news is that homes are, for the most part, retaining their value. So even though the length of time might be longer sellers can still expect to sell – at this point – close to their original list price.
Like American Canyon and Vallejo, Fairfield saw a significant dip in available inventory during the winter but has bounced back remarkably this spring, in particular after the rains stopped. The market felt incredibly fast for the first couple of months this year with some homes going in hours. As the bigger homes started to come on the market – a few of which were ambitiously priced – it slowed a bit. However, it’s heated back but days on market is still well over what it was at this time last year.
One important aspect to note about the Fairfield market is that prices are truly stagnant. The median homes sales price was down 2.5% year-over-year but up slightly for the same quarter (March through May) from last year.
What does it all mean?
The bottom line is that – as I mentioned earlier – the market is leveling out. The spring selling season is in full swing and although home prices are up slightly across the board, we are not seeing the same increases that we have in the past.
If you are a buyer, now is a great time to go out and get your dream home. Prices have stabilized and interest rates were dropping at the end of last week (I have one client who was able to lock in below 4%!!!).
If you are a seller, don’t despair if you don’t get your home into contract after the first weekend. While that is still happening, for the most part it’s taking 2-3 weeks to get an offer in and into contract. Make sure that your property is clean, decluttered, cut down on the amount of furniture you have and has curb appeal (e.g. mow the front lawn, weed, water the plants, etc.). If you are patient and follow your agent’s advice, your time will come.