Interesting stat I just heard at my company’s major conference: 35% of the homes in the country don’t have a mortgage and 63% of the homes have equity. This seems to help answer the question as to whether or not we’re in a bubble. To that end, here’s a quick recap of the numbers.

There’s a lot of volatility in the week-to-week median list price across the region, but with so few homes on the market, that’s hardly a surprise. The February numbers come out at the beginning of next week. It will be instructive to see how many new listings came to the market in February vs. the last 2 years. Nick Bailey, the RE/MAX CEO, spoke – anecdotally – about his feeling that there is inventory, it’s just moving faster than ever. This may very well be the case.

Let’s take a look at Benicia, for example. There are currently 10 homes listed as being in contract. The average number of days for a home to get into contract is 12.5 – but because it’s such a small sample size, and one of the homes has been in and out of contract for 46 days (not sure what’s going on there) – perhaps we should take a look at the median number of days on market…which is 6.5 🤯 Ok, so 10 homes isn’t much of a sample size. Let’s widen the pool a little bit to include Benicia’s sold homes for February, which is eight. The median number of days on market actually drops a 1/2 day!!

When taking a look at the numbers from 2 years, there were actually more new listings in January 2022, than there were in January, 2020.

The same doesn’t hold true for the rest of the region, though. Fairfield, in particular, is experiencing a gigantic new listing crunch. There were 46% fewer new listings in January than there were two years ago. You can see from the graph below that new listings – overall – have been trending downward in Fairfield since January 2020.

As a result of compressed inventory and high buyer demand, the median sales price in Fairfield has jumped 18.9% in two years. As of this morning, there were only 37 homes on the market in Fairfield.

Where does this leave us? At the moment, there aren’t any indications that the buyer pressure will ease up. Interest rates began to creep up, but with the war in the Ukraine, that increase seems to have stalled meaning that the assumed (hoped for) buyer purge because of the higher interest rates might not happen. The new construction around the region will continue to be too little too late for most buyers; also, since prices generally start in the $700,000’s, it appears as though it will price out many first time home buyers. Homes in the $400,000 – $600,000 range will continue to be at a premium. The biggest question, at the moment, becomes how many will be bought up by owner-occupants vs. institutional investors. Remains to be seen.

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