March 2022 pretty much picks up where February 2022 left off. First, here’s a quick look at the numbers from around the area. New listings were down 10% from January which was a little bit of a surprise. However, if you’ve been following the weekly updates, you’d see that both Vallejo and Fairfield have been down significantly from last year – in particular the Fairfield market. And while Fairfield has started bouncing back over the past couple of weeks, it is nowhere near last year’s inventory levels (never mind pre-pandemic); and Vallejo has definitely had a difficult start to the year. Overall, there were the second fewest new listings in the city since the since the start of the pandemic.

The median sales price again surged in the region, up 6.2% from January to an even $600,000. The year-over-year numbers look like the same old double digit gains that we had been seeing, but there are some reasons for that. The cray-cray housing market didn’t really take off until last March and April in the area – at which point it hasn’t really looked back. Even so, the number of homes sold only increased by 2 units from February to January. However, it makes sense that the sales price rose so significantly given the severe lack of inventory.

While in some instances, I can argue that the inventory is roughly the same, only moving faster (see comments on Benicia last week), overall it’s starting to look like the inventory is moving faster and there’s a lot less of it. As a result, we’re seeing the sales price be approximately 3% above the list price on average and the days on market has started tumbling again to 28 days – down 30% from January and a month faster than February 2020. Given that it looks like Vallejo is having a sluggish start to the spring selling season, I thought that it would be worth some time to take a closer look at where we’ve been to see if we can figure out where we might be going.

Vallejo Average List Price vs. Average & Median Sales Price

One statistic that really stood out for me is the difference between the average list price and the average sales price…more specifically how much less the average list price has gone up in 3 years than the average and/or median sales price. In February 2019, the average list price was $469,000; at the close of last month, the average list price was $569,000 – an increase of 21.3%. Not bad under any stretch of the imagination. However, the average sales price rose 42.6% from $392,000 to $559,000…so what’s going on, exactly?

The truth is, I don’t know. The Vallejo market has appreciated considerably since cratering in Q4 2011. Some of this may very well be inventory related. There were almost 500 fewer homes on the market in 2021 than there were in 2012. Some of this may also be geography – especially this year. There appear to be fewer homes for sale on the higher end and more mom-and-pop investors trying to cash out after a decade of gains on their investments and a tightening regulatory rental market making it more difficult to raise rents while tenants are in the home. The pandemic certainly plays a role; however, as governments move to a more endemic approach treating COVID more like a flu than a natural catastrophe, things might change – and by that I mean inventory might loosen up.

We do know that homeowners are staying in their homes longer since the great recession and it appears as though the pandemic has only made it more likely that home owners will stay put, rather than move.

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