Unlike most communities in our region, Davis home sales continue to slowly grow in numbers. The age-old saying that real estate is all about location applies to Davis,California. What happens in other parts of Yolo County, Sacramento or San Francisco has little or no impact on Davis except psychologically as reflected in the torrent of negative news reports about other cities.
Since 2009, the Davis housing market continues to grow in terms of residential sales to date with the lowest number of sales in 2008. The sales increase is encouraging since it reflects a rational and sustainable growth. Our average sales price and price per square foot has declined slightly year over year. In communities around Davis, values have plummeted in some cases by 60% or more since the peak of 2006.
Many buyers are either downsizing or purchasing smaller homes than the past and in 2011, we have seen the average square footage increase slightly to 1825 square feet from 1757 square feet in 2010. This is well below the typical 2200 to 2500 square feet that was common in the 1990’s and early 2000’s. The general consensus of most local real estate agents is that price per square foot should be carefully applied to similar sized and located homes and not extrapolated across the board for all homes in Davis, California.
Newer homes with more energy-efficient features are normally receiving a higher price per square foot than most of the resale properties. Appraisals are supporting the prices reflecting the value provided by these features. Residential sales year-to-date in 2011 are 314 sold, compared to 304 in 2010 and 274 in 2009. These numbers compared to the 1990’s through 2003, before the run up in prices, are much lower. Using the earlier dates as “typical” current sales activity is 30% below what would be considered normal rate of yearly hame sales in Davis.
The average days on the market has also increased in 2011 from last year. This has more to do with the length of escrow because of lender bureaucracy. Lenders have become more stringent with their loan requirements and this is extending the amount of time processing the loan and escrow. The sales increase this year and what we view as a trend is primarily related to job and family growth. Jobs generated by UC Davis and other local businesses are driving a large portion of the increase.
In the 1990’s through 2007 we saw a steady number of homebuyers who chose Davis over other cities as a commuting base. Buyers had numerous cities to select from, not too dissimilar to Davis home prices but not offering all of the desirable amenities. Today that buyer group has diminished due to the unemployment rate in the region along the widened price differential between Davis and the surrounding locales. The price separation has increased to such a degree as to dissuade a significant portion of buyers who would prefer our quant college town, but can’t ignore bargains elsewhere.
For a comparison, just look north to Woodland for evidence. Over the last 40+ years the price difference between similar homes in Davis and Woodland were about 25 percent. Today the difference is 50 percent which certainly attracts buyers to Woodland that otherwise would have purchased in Davis. Home prices in Davis have become more affordable in the last few years. Buyers with good paying jobs are still moving here because of the superior schools, safety, weather and proximity to many travel destinations. We see that trend continuing and gradually growing as our economy improves. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home and easy access to view all local area homes for sale.