Don’t be fooled by the “For Sale” sign…there really are any homes for sale. Ok, I’m kidding 🐐 but…no, not really.
Across the region (American Canyon, Benicia, Fairfield, Suisun, and Vallejo) there are essentially the same number of homes for sale this year as last year (only 3 fewer) which is a good thing. The bad news is that there were 163 fewer homes for sale in last month than in 2020. That’s a drop ⏬ of over 55%! The median price has gone 🔺 14% in the last twelve months, and 27% in the last two years and currently sits at $565,000.
The number of units sold dropped 🔻by a staggering 31.5% year-over-year. The number of days on market rose slightly from December and was up by a week from the same time last year. At the same time, sales price against list price dropped by a percentage point from last year. If no other homes went on the market (a distinct possibility), it would take about 3 weeks to sell through the existing inventory. That’s not long. By comparison, in 2019 it would take 21/2 months to sell through all of the inventory. Here’s the kicker: traditionally, if takes anything less than 3 months to sell through the inventory, it’s considered a seller’s market, although that timing seems to have changed, thanks to the incredibly 🔥 market we’ve been experiencing for the past couple of years.
Why do I keep looking at January 2019 or 2020? Well, that was one of the last times we had a “normal” market. It is interesting to note that in early 2020 (pre-pandemic) we had already started to see the market crunch that we’re experiencing today. There were 434 homes on the market in January 2019. That means that there was still 38%± fewer listings in 2020 than in 2019. That was still pre-pandemic.
In an article on the RIS Media blog yesterday, they cited a new National Association of Realtor (NAR) study that showed that there was only 1 home for every 4,201 families that made the median income in Los Angeles. That’s…
New listings in Fairfield (for example) were down by a little over 33% from last year in January. As you might expect, median sales price rose 12±% year-over-year. There were 55 homes sold in Fairfield proper in January. Of those, I was able to figure out how many offers 36 of them had (1 to ∞). There were at least 12 other homes that sold where there were probably multiple offers, but the agent just didn’t put that information into MLS. The average number of offers was 3.8. The most offers on any home was 19.
So what, then, do all these numbers mean?
I’ve been somewhat skeptical of the “experts” as they keep saying that the market is going to cool off in 2022. Right now, it looks like they may be right. I think that there are a variety of reasons for that. Home prices are extremely high, mortgage rates have inched higher, rent has increased at a faster rate than wages and inflation. Which seems to indicate that there are fewer buyers…at the moment. There are some in the industry who think that the spring selling season will start earlier (think early March), but there aren’t any numbers to bear that out.
If you’re a buyer, make sure that you have your ducks in a row. At a minimum, get prequalified, but try to get fully underwritten prior to writing an offer. If you can do that, it puts you in a strong position against all cash buyers. You can close faster. There’s less “risk” involved in the loan because you’ve gone all the way through the hardest part of the process.
If you’re a seller, don’t sleep on fixing the small stuff and make sure that your home has curb appeal. The difference between 1 offer and 15 offers isn’t just about location. Your home should look like it’s move-in ready. If you have kids, make them clean up after themselves. Don’t leave dishes in the sink when you go to work. Little things make a big difference when buyers are previewing the property.