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2021 November Market Update

The American Canyon Real Estate Market is continuing strong heading into the winter. Even though the median price retreated significantly last month, that was largely because of older, smaller homes going on the market at the end of summer. So, while the median home sales price dropped by almost 8% from last year, the average price per square foot rose over 31% from last October. Continued lack of inventory is still the story.

The good news, however, is that inventory is starting to rebound a bit. The city averaged 16 active listings for the second month in a row which is consistent with the trend we’ve been seeing for the past couple of months.

As you can see from the above chart, inventory has rebounded to pre-pandemic levels. Unfortunately, even the pre-pandemic inventory was not enough. This will be a consistent trend until Watson Ranch starts to get built out. Those homes should start coming on the market around April – it will be interesting to see what exactly this does to the housing market. I would be surprised to see it take a step backward (prices definitely didn’t retreat in Cordelia over the past 18 months) but it could certainly curb the massive gains in home prices we’ve been seeing as things continue to normalize.

Regional Recap

American Canyon bucked the trend for new listings; regionally, new homes on the market dropped 30% year over year! Pending home sales also dropped from last year, but at a significantly slower rate of 8.5%. Home sales price continued to rise throughout the region, as the median sales price was at $575,000, which is 17.3% higher than year-over-year, and 25% from 2 years ago. There is less than a month of inventory based on closed sales.

Average days on market is at 31 days – this is essentially the time it takes from when the home becomes active to when it closes. This is down by 6 days from 2020, and 17 days faster than 2019. That’s more than 2 weeks faster than two years ago! Additionally, on average, the sales price is still 2% higher than the list price. And when looking at the inventory, if no more homes came on the market, it would take less than a month to sell through the entire existing stock.

Where are you going, where have you been?

However, it is also safe to say that the speed at which housing prices are going up are starting to decelerate. This isn’t the end of the world, in fact it’s probably a good thing. By having housing prices slow down we lessen the risk of creating a housing bubble. Underlying economic fundamentals are significantly better than they were in 2007-2008 when the bottom dropped out of the economy, however, I just can’t imagine that there are enough buyers whose wages will be able to keep up with the rate of increase of the housing prices.

So, what does all of this mean, really? Short answer: we are still in an incredibly fast market and have been for at least 2 years and I don’t think that this is going to change any time in the near future.

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