Market Trends and Comparisons- A Closer Look

As my recent blogs have talked about, I've observed  a general increase of inventory in most market areas. I thought it'd be interesting to analyze specific communities and see what is happening within each neighborhood to identify similar trends and differences.

Lake Wildwood Inventory

Lake Wildwood and Lake of the Pines 

Both communities are gated planned unit developments with HOA fees. Inventory has risen in both communities for extended months now (see charts). Lake Wildwood currently is ranging between 6 - 9 months of inventory! In addition, the overall median price has also decreased over the past 6 months from $300,750 to $240,000. There are possibly many factors that may go into this price decrease (a topic for another blog) but it does seem to indicate strongly that the market is shifting in this community.

Lake of the Pines Inventory

Regarding Lake of the Pines, the overall median price has also decreased from $350,000 to $310,000 with inventory ranging in the 5 to 9 month range over the past 6 months.

I find it interesting that both gated communities are having similar downward median price trends. This will be something to watch closely as we enter fall.

Christian Valley(Auburn)/Meadow Vista/Applegate Inventory

Alta Sierra (Grass Valley) Inventory

Christian Valley/Auburn and Alta Sierra

Regarding the Christian Valley/Meadow Vista/Applegate market area (area 12302), inventory has been more of a slow upward trend from 2013 trough 2014 so far (see chart to the right). It appears that inventory was in the 3 month range as 2013 ended with inventory now in the approx. 5 month range. Over the last 6 months - the median and average price has been generally stable, which is a good sign of a healthy market.

There has been a similar trend within Alta Sierra. Inventory has gently increased within a healthy range similar to christian valley (area 12302) with median prices trending from $292,000 over the past 6 months compared to $280,000 over the 6 months prior.  With such a slight percentage median price increase, this indicates more of a stable market at this time.


As we move from summer to fall, the balance between demand and supply will likely dictate where each market will trend going into fall and winter. Currently, pricing your home is more important than ever especially if you are located in a neighborhood where inventory is exceeding demand!

If your are interested in a free comparative market analysis (CMA) for your local neighborhood, contact me for details.



Bryan Lynch, Realtor
Direct: 530-878-1688
Cell/Text: 916-765-6785
Email: BryanLynchRE@gmail.com
www.BryanLynchRE.com
License#01790398


CURRENT LISTINGS:
www.1375BooleRd.com
MLS#14012596 - JUST REDUCED TO $669,000. EXTRAORDINARY. PRIVATE. UNIQUE. Enjoy treetop sunset views, year round pond and creek at your 7.1 acre foothills retreat!

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use. 

Real Estate Slow Down? Factors Driving the Market-

We are hearing recent news about the slowing in sales volume this spring and naturally the slowing has lead to questions of where is the Real Estate Market heading? Let's face it - the real estate fall out (2007 to 2010) is not too far in the distant memory and volume of sales has slowed this spring, inventory has increased, and prices seemly level following a general period of extended appreciation. While I can't definitely state where the market may be heading, it is a very honest and reasonable question to consider the current market fluctuation and the recent shift in the market. Are prices going to continue to rise? Why is inventory increasing? While there is not easy answers to these questions, it's important to identify some basic underlying factors of what drove the market prior to the 2007-2010 fallout compared to today's market and monitor those factors in helping assess one's position.


Real Estate Boom - Factors Then and Now:
The prior real estate boom that peaked generally in 2006 or so was driven by a multiple of reasons, one of which is known as the "wealth affect". Many homeowners took equity out of their homes to buy investment properties with aggressive loan programs and housing values increased and the cycle repeated for some time until ceiling hit and we all know the rest of the story.  This time around, the recent increase in real estate values has not generally been driven by the "wealth affect" but more by large investment (hedge fund) companies, government related stimulus programs, historical very low interest rates, and for a period of time - an extreme shortage of inventory (less than 1 month of inventory in some areas). So the external factors driving the market are generally different from the prior housing boom.

PLACER COUNTY - MEDIAN PRICES  2006 - 2014

While values have generally increased in Placer county the last few years - they are still below their 2006 year peak and tend to fall more in the 2008-2009 price range (see median and price per SF charts). Given the underlying factors, it's impossible to know exactly where the markets are heading in the short to long term. Will prices increase ? Stay flat ? Or even fall back? By following the above for mentioned external factors will help stay current on where the markets may be heading before it gets there. Sometimes the real estate news we read about is already "old" news when it's hits the print.

PLACER COUNTY - AVERAGE PRICE PER SF-   2006 - 2014

It is important to acknowledge that many real estate articles often talk about real estate markets in too broad of a stroke. For a clearer picture of what is happening in your local market, it's imperative to look at "your" specific market. There may be fluctuations and different trends from neighborhood to neighborhood. One thing is certain - accurately pricing your home in today's market is becoming more and more critical for a timely sale. 


Bryan Lynch, Realtor
Direct: 530-878-1688
Cell/Text: 916-765-6785
Email: BryanLynchRE@gmail.com
www.BryanLynchRE.com
License#01790398


CURRENT LISTINGS:
www.1375BooleRd.com
MLS#14012596 - JUST REDUCED TO $719,000. High quality, custom built 3,822sf home located 7.1 acres with a park like setting and year round pond & creek and beautiful hilltop views. This property is a MUST see in person!  

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use. 

How is the Real Estate market differing in Spring 2014 vs. 2013?

We are hearing recent ​real estate ​news referencing sales and ​volume slowing this spring compared to spring 2013. So what is happening and impacting the market this spring compared to 2013? There are definitely some external factors that have shifted. Below is a chart for all of placer county. As you'll see, active listings continue to increase with less sales. Comparing to spring 2013, inventory has essentially doubled.

Placer county active listings - pending sales - closed sales

It's important to understand and dissect these factors influencing the real estate market to be better understand where the market is today and possibly heading. 

Interest rates-

​Interest rates will impact the cost to borrow and ultimately impact the mortgage payment that one can afford to pay. Since 2013, rates have generally slightly increased. Increased costs to borrowers will impact the potential price range afforded and may ultimately price out a buyer due an increased monthly payment.

Further, lending regulations have continued to change and at times becoming more challenging for some borrowers to obtain a loan. Josh Borba, broker associate with MLS mortgage in Auburn, states, "Recent changes to lending rules and regulations have made obtaining a new home loan a much more difficult process. One of the main hurdles is that lenders are lending on a lower debt to income (DTI) ratio.  The good news is that although rates are up slightly from a year ago, they are still extremely low which helps to keep borrowers DTI lower so they gain greater purchasing power."

The future movement of interest rates are impossible to predict but will ultimately have a significant impact on the overall real estate market. We have been spoiled with cheap borrowing costs the last few years, which in return, has stimulated the markets and has ultimately contributed to real estate values appreciating over the past few years while keeping monthly payments affordable.

​

Investors- 

Cash investors have been an integral part of the market the last few years. Large investment companies like Blackstone have purchased homes in bulk quantities that has contributed to the market recovery and contributed to less inventory available on the market. ​With investor activity slowing more recently​, this is perhaps ​a gauge of how investors view current market conditions. The fact that investor cash home purchases has slowed is likely an indicator that perhaps they view home prices too high and/or not affordable anymore compared to rental income received. Investors exiting the market has contributed to the increase of inventory.

Placer County Inventory

Buyer demand/inventory increasing-

Buyer demand is slowing (partially ​due to reasons above), and consequently, inventory has increased. The above chart shows inventory essentially doubling compared to last year. The impact of demand/supply is critical overall as gives a general​ indicator where prices will move. When a shortage of inventory exists- prices will generally increase upward (as we saw in 2013). In many areas- the markets were appreciating at double digit percentage in 2013. On the flip side, if there is an exceeding over supply of homes on the market, prices will generally begin to decline as we saw during the mortgage crisis many years ago. 

Regarding the local markets I've analyzed, while remaining at healthy levels thus far, housing inventory has increased in many areas and median and average prices have shifted from increasing in 2013 to more level in 2014 (thus far). After this spring season passes, if buyer interest slows into the fall and inventory rises- we could see median and average prices slowly begin to drop down from current levels. 


Conclusion-
I hope discussing the above factors helps give a better overview of the overall market conditions and begins to explain the difference between spring 2014 (thus far) vs. 2013.  

Again, it is important to understand that there are segmented markets within the overall market that are important to analyze (my April blog discussed this topic). If you are curious what the value of your home is in today's market, contact me for a detailed comparative market analysis (CMA).  

Bryan Lynch, Realtor
Direct: 530-878-1688
Cell/Text: 916-765-6785
Email: BryanLynchRE@gmail.com
www.BryanLynchRE.com
License#01790398

CURRENT LISTINGS:
www.1375BooleRd.com
MLS#14012596 - High quality, custom built 3,822sf home located 7.1 acres with a park like setting and year round pond & creek and beautiful hilltop views. This property is a MUST see in person!  

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use. 

Spring Market- Who has the leverage- buyer or seller?

When considering selling or buying, there are many factors involved. One important consideration is your competition on the market. The importance of recognizing your home's segmented market identifying whether a shortage, balance or over supply of homes exists will indicate and demonstrate who has the potential leverage- the buyer, seller or possibly both. Recently I analyzed price ranges for all SFRs from Auburn through Colfax market areas using ONLY PRICE as the barometer.

Homes priced $300,000 and below- 

While inventory has increased recently, current data still shows inventory to be lower compared to the higher price ranges. Over the past 3 months, pending sales have increased which is likely due to the Spring season. When supply is lower, sellers will generally have a slight advantage since there is high buyer demand with fewer homes available. Sellers will generally test the higher end of the price range in hopes in getting the highest possible price. Buyers have to factor and weigh potential competition among other buyers when submitting an offer or it may get overlooked.

Homes priced between $300,000 to $500,000- 

Current data shows demand and supply fairly in balance in this price range. The market activity also picked up in March with both an increase of pending sales and active listings. From a seller and buyer standpoint, both should have realistic market expectations understating that generally neither side (buyer or seller) is in a strong position of leverage in most scenarios.

Homes priced between $500,00 to $1,000,000 - 

Current data shows an over supply of homes currently available. Consequently, buyers will generally have an advantage since there is more inventory available to choose from. If a home is listed higher and/or over priced compared to competitors, the home will likely be passed over as buyers look at lower priced homes. It is imperative for the seller to pay close attention and monitor all active listings, pending sales and recent closed sales to remain competitive. 

While somewhat simplistic (and putting aside other factors to consider), I hope the above helps give a general overview of current conditions based upon price range. It is HIGHLY important to analyze your home's segmented market to help gain a better understanding of not only your home's value but your competition. 

Contact me for any questions and if interested in completing a comparative market analysis (CMA) for your home.

Bryan Lynch, Realtor
Direct: 530-878-1688
Cell/Text: 916-765-6785
Email: BryanLynchRE@gmail.com
www.BryanLynchRE.com
License#01790398

  
CURRENT LISTINGS:
www.1375BooleRd.com
MLS#14012596 - High quality, custom built 3,822sf home located 7.1 acres with a park like setting and year round pond & creek. This property is a MUST see in person!  


Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use. 

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