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It’s CRAZY Out There!
This month, I feel like it’s Black Friday except for the discounts! Homes are selling so fast for so much over list that it seems people are trampling over others to get to them as if there won’t ever be another home on the market again. It actually feels like that and that it’s a bit frightening.
Any listing agent in this area can tell you that what we’re seeing now, while similar to the 2005/2006 time frame, is unprecedented. No one remembers a time when the market was as hot as it is right now.
There are those on both sides of the sustainable vs. unsustainable debate, however, it’s where we are right now. Let’s make it work!
An article this morning on DSNews.com, click here, reports that Fed Reserve Board Governor Elizabeth Duke does indeed believe that the recovery is sustainable..if all things stay the same. However, as Mark Hanson, a respected mortgage banking and real estate analyst, points out in comments right here on SREVS, “..real estate like everything else is about rate of change..”. Having been in this business full time for the past 11 years, I couldn’t agree more.
Nothing stays the same and all this market needs is some small wakeup calls over the next few months for the winds to shift completely. Hopefully it will be subtle if it happens.
With prices going up as they have, investors simply won’t be in the market for much longer as it won’t make financial sense. Pile on top of that an interest rate increase and we have the makings for a flattening or an actually decline in average sales price from where we are now.
That said, as my friend and top producing Realtor Marguerite Crespillo just told me, “..you can only predict the past.” How relevant is that!? :-) Onward!
Homes Stay On The Market Fewer and Fewer Days
South Placer is not unlike Sacramento County in that properties are off the market within days of being listed. As you can see by the graph and table below, the amount of time a home stays on the market has gone down more than 58% in the last 15 months, more than 54% over the last 12 months.
Multiple offers, again, dominate our market. Low inventory levels are creating fierce competition for homes and sales prices are being driven up as a result.
As like last time, this market won’t be here for long. The question is when and why not if.
The Average Sales Price Steadily Ascend
I had to do a double take when I saw the numbers here. There was a 32% increase in the average sales price in one year in South Placer County. That is simply amazing. I don’t even know how to comment on this other than to say..wow! Profound huh?
Homes Available For Sale
In South Placer County the number of homes available for sale is very low. Low inventory and interest rates are combining to make one of the best seller’s markets in the last 7 years. Over the last 15 months, the number of homes available for sale has dropped over 38%.
This year is starting out with a BANG! but who knows how long it will last. Prices going up like they have will scare investors off at some point. That will result in fewer cash transactions and more inventory available for sale as a segment of buyers for investment worthy homes declines.
Similarly, if interest rates do go up, some buyers will be pressed out of the market due to affordability. Again, this will result in a segment of the buyers being absent from the market and inventory will increase.
I would like to see the average sales price going up much more slowly than it has. The run up in values from 2003 to 2006 didn’t leave a good taste in my mouth and I’d hate to see the market backslide again.
Have a home you need to sell or one to purchase? Please call, text, email or simply just fill out the form below and I’ll get back to you promptly.
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