Overall the regional real estate market (American Canyon, Vallejo & Fairfield) remains strong. The apparent market correction is starting to retreat in certain subdivisions and we are starting to see a rebound in prices and activity.
American Canyon median home prices remained steady at $535,000 in June, although it is down 3.3% from last year at the same time. Although statistically negligible, it does represent an approximately $18,000 price drop.
This isn’t necessarily cause for panic, however, as part of this price drop reflects smaller, more affordable homes selling. One thing that we have noticed in the business is that the selling season appears to have started later this year. Homes that are turnkey, staged and cleaned are selling extremely quickly (within 10 days) and homes that are dated and that need a bit of work are lingering on the market. This is especially true of the older sub divisions like Rancho del Mar and Napa Square.
Average days on market plummeted after the winter and is now hovering in the 50-60 day range. This is a little deceiving because BAREIS counts homes that are listed as contingent (in contract but with contingencies) as still being active and on the market. This isn’t necessarily true. Given that most escrows are for between 21-30 days and you can see that actual time on the market is somewhere between three and four weeks before going into contract.
Overall, there is still very little inventory in American Canyon. There were only 15 new listings in June although July has kicked off very strong and we should return to a more normal 20-25 new listings.
All in all, the American Canyon Market is still strong and prices are still expected to rise although more likely in the 3-5% range, rather than the double digit increases we have been seeing for the past 5 years.
The Vallejo market has also bounced back from it’s winter doldrums. Inventory increased by 14.2% year-over-year. However, this is not causing expected downward pressure on the price: median sales price still rose 6.8% year-over-year.
Homes are generally still selling for around the original list price. The days on market is still hovering between 40-45 days which means that homes are generally going into contract in about 2 weeks. Still a fast market.
Still a sellers’ market. With only 1.5 months of inventory based on pending sales, the market is moving exceptionally fast. What really stands out for me is that even with the increased inventory median home prices still rose significantly over the past two months. It’s worth paying attention to. For the most part I’ve been dismissive of the potential instant millionaire wave from all of the techies across the Bay but I may have been wrong.
The Fairfield Market is kind of going crazy. There are more homes on the market right now than any other time in the last 14 months. It will be interesting to see if that trend holds but – anecdotally – I don’t see it cooling down.
What I find interesting is that – so far – the pending sales haven’t been able to keep up with the rash of new inventory. Although there is a corresponding hike in pending sales, it’s only up 4% for the quarter, year-over-year. Homes for sale for the quarter is up 21.8% year-over-year but!! solds for the same quarter have dropped 11.1% year-over-year.
Here’s where things are starting to look like we’d expect. The laws of market supply and demand mean that the more inventory we see the lower the sales price. That hasn’t always been the case with each city in the region but we are seeing that in Fairfield. Median sales price dipped to $448,000 for June which is off by 8% from last June. That’s a $39,000 drop in the median home price. What’s amazing is that the days on market is still roughly the same from this time last year. This number is worth watching as it will help us to gauge which way the market is going.
What Does This Mean to Me?
If you’re a buyer
The panic that we’ve all felt that you are going to miss out on “the home” can start to ease. Homes are hanging out a little bit longer. You might not get the deal that you’re looking for but you aren’t gong to have to pay through the nose either. A reasonably priced home will still go into contract in about 10-14 days and you might have some competition, but it won’t be overwhelming. Try to stay open minded throughout the process.
If you’re a seller
I’ve said this a few times, but it’s time to up your game. Stage your home. Get it cleaned. Don’t lie to yourself, curb appeal is huge. I can’t tell you how many cars do a drive by during an open house and choose to leave. It doesn’t matter that you used gold nails on your DIY kitchen remodel if the lawn is dead.
Here’s what it really means, though: breathe. Your home will sell and it will sell at close to asking but it just might take time.