The housing market has gotten quiet predictable. One word to describe our current status would be chaotic. At least that’s the viewpoint of almost every home buyer that has been fortunate enough to buy a home and those many prospects that have lost out to higher bids in the bidding wars that has caused anxiety for the buyer and euphoria for the home seller.
The big jump in home prices this year can be attributed to one big factor, a lack of inventory. The increase in prices are starting to bring more sellers to the forefront, but inventory remains lean. When adjusted for seasonal factors, inventory has risen for five months in a row, suggesting the supply bottom came in January. The new sellers are making moves they’ve put off for years as home prices tanked. And many are pricing homes at levels the market would suggest might be overpriced and getting their prices anyway.
The increased inventory hardly constitutes a flood, more like a trickle would be a better definition. There are still far too few for the balance of power to shift from seller, back to buyer. With home prices up by double digits from a year ago, more are expected as home prices continue to rise. Earlier this month, the number of homes listed for sale was down 12% year-over-year. That’s still better than January, when listings were down a robust 18% year-over-year.
Nationwide, the median time on the market for all homes that sold in May was only 41 days. That’s down from 72 days a year ago. Some sellers are getting prices that not only surprise themselves, but also their realtors, given the tight supplies for sale in most markets and the frequency of multiple offer situations that have had a big play in the uptick in home prices. Most properties in Davis are being sold with bidding wars that have taken prices 5% to 10% above the asking price. This is even with the average sales price that has crept to nearly $500,000 this year.
In California, data shows just a 2.6 month supply of single family homes for sale, leaving this state firmly in the sellers camp after years of rampant foreclosure and big price drops. The role reversal from a buyers market to a seller’s market happened so quickly that many homeowners have not realized the about-face has even taken place. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home or to view local area homes for sale in Davis, California and the surrounding communities.