Merry Christmas, everyone! Here’s my monthly analysis of the single-family home market in western Nevada County.
Buyers Continue to Surprise in 2015! The biggest surprise in November 2015 was the high number of new escrows (116). That demand is 10% higher than October and was the seventh highest month for 2015 – even higher than August. What was not a surprise was that we saw only 74 new listings hit the market, the lowest month since last December. The high demand and low supply of new listings led to a 16% decrease of available listings month over month. We have 24% less available listings year over year, and the rolling last twelve month (LTM) average is down 16% from the previous twelve months (PTM).
Supply and Demand is Driving an Appreciating Market: The simplest rule in economics of Supply and Demand can clearly be seen in Nevada County. With demand up 20% the LTM over the PTM and supply down 16%, the average sold price ($370,000 compared to $337,000) is up 10% over the rolling twelve month average. This appreciation in price is not due to an unwise and instable lending market we saw before the last bubble. Since the appreciation is due to supply and demand forces, we anticipate the market to continue to appreciate, although appreciation will probably be around a more sustainable rate of 5%.
Higher End Properties are Selling: Whereas a lower median sold price (when compared to the average sold price) over the last twelve months of $328,000 shows that the majority of homes sold are in the lower price range. However, one encouraging trend is that homes priced between $400,000 and $650,000 have sold 26% more units in the LTM compared to the PTM, and homes priced from $650,000 and up have sold 90% more units! That higher-priced market has almost doubled in demand!
Sellers Remain in Control: With only three months of inventory, Nevada County real estate continues to be a strong seller’s market. Many sellers are holding off on listing the properties either due to convenience or old notions of spring being a better market to sell, but serious buyers remain in the market. These buyers are desperate to find a home now due to time constraints resulting from either life demands or the need to buy before getting priced out of the market. We wouldn’t be surprised to see a slight hiccup in demand during December, but the market should return quickly early in 2016 to higher numbers of both inventory and new escrows while still being a seller’s market.
- Buyers are having a more difficult time finding “deals.” With the distressed properties (short sales and foreclosures) being well below 10% of the market, most available homes are equity sales from sellers taking advantage of the appreciating market. We highly encourage buyers to be diligent and fully ready to jump on the right property. Get pre-approved by a reputable lender and call me today before hikes in both prices and interest rates make your dream home just out of reach.
- Sellers need not wait to enter the market. Once you’ve fully enjoyed your Christmas and holiday festivities, call me about maximizing the return on your property. Serious buyers remain out in force, and smart sellers will enjoy the lower level of competition.