Year over year statistical data for Lake County ending February 2021
This report is generated around the 20th of each month once the previous months numbers have been posted. What we see here is a report generated for the Solano County Housing Market through February 2021. So we are always looking a month behind. Our statistics are derived from the California Regional Multiple Listing Service (CRMLS) This is the Multiple Listing Service provider for all real estate brokerage in Lake County. If you have questions or wish to know a more specific account of your properties value and the timing of either selling or buying we are always happy to jump on a Zoom or meet with you at your property to evaluate and discuss a strategy. We can be reached via cell/text 707.580.3499 or email us at firstname.lastname@example.org
Our sales price continues to climb. Through February, 2021, our median sales price for all of Lake County’s sites at $302,000. Making us #1 on the list of the most affordable places to live in California.
This compared to 2020 pricing during the same period is a +28.5% increase which is a pretty strong appreciation for 12 months. So what’s driving these prices? First, we have to look at interest rates. In February 0f 2020 the national 30-year mortgage rate was 3.47% the rate in February 2021 was 2.87% two thirds of a point less. If we go back to three years ago February 2019 we have an interest rate of 4.33%This is important because historically as rates go down housing goes up and the opposite is true. This is because the buyers buying power is dependent on interest rates.
If we look at how many homes sold in the last month (103) compared to one year ago (81) we see an 27.2% increase in sales. This is during one of the worst economic crises the country has faced in decades. The Covid-19 Pandemic is producing a crazy housing market. Homes are selling faster and at above prices all over the country. In nearby Solano county inventory levels are at less than 3 weeks and not showing signs of growth. this means they could run out of homes to sell to potential buyers if sellers don’t come to the market ready to sell. If you have 1 home for sale and 30 buyers want it the price is going up. In Lake County our demand is moderate as we still have a healthy supply of iniventory to sell.
Setting the Pandemic aside. Here’s what’s happening in the market. People started buying again around 2011 and continued buying homes aggressively over the last 9 years. The housing crises back in 2007 through 2010 caused home prices to dip 50% to 60% in some areas. This caused a run on home shopping because the prices were so cheap. Interest rates in 2011 remained between 4% and 5%. As we entered 2019 interest rates began to drop and those who purchase years prior began to refinance or better yet buy up.
Example: Sam and Linda purchase a home in Lake County back in 2017 for $218,000. Putting 10% down and living in the home for 36 months. They financed the home with a 4.85% interest rate and a payment of $1,247 a month. Today Sam and Lind can sell that same home for $296,500 (November 2020 Median Home Price) get about Netting about $108,750 in equity. Now Sam and Linda can take their equity and use it as a down payment on a newer, bigger, nicer home priced at $350,000, and because interest rates are now around 2.65% they will have a payment of $1,283 having put 30% down. They will own the home of their dreams and have strong built-in equity to withstand market downturns and more importantly an affordable payment.
In Lake County, our Days On Market (DOM) is at a very low 39 the same it was two years ago but down 41.8% from a year ago. Another glaring statistic is our monthly inventory levels have decreased by -42% year over year. We do see a slight spike in February’s 2.9 months supply inventory level compared to January’s 2.6. In one month we have added three weeks supply. The thing to remember is it is considered a sellers market when inventory levels are 1 to 3 months and a more balanced market when they sit between 4 and 6 months. It becomes a strong buyers market when inventory levels increase above 6 months supply. If we use the average DOM combined with our monthly inventory a homeowner should expect their home to sell within 20 to 60 days given their agent has affectively marketing the home and has come up with a string pricing strategy.
February always brings us agents joy. It is usually when our sellers start calling to get their homes ready for the spring selling season. Many of us are still waiting for the phone to start ringing as inventory levels are at an all time low. We listed 101 properties for sale in February this is down –15% from January 2021 and -21.1% from the same period a year ago. We got a little excited in January because we saw a spike in listings. Now we will have to wait and see if March is following suit with February or spikes like January which is what normally happens.
It’s easy to see by the numbers that sellers stayed put and nesters, city workers seeking refuge and the new telecommuter workers are out buying up the inventory. A great example of this kind of demand is people who have to work closer to the Bay Area. Even our neighbors Santa Rosa has a price point of $741,000. If you had to work in an office a year ago and chose to live close you had to pay substantially more for that convenience. Renting a 3 bedroom 2 bath home in Santa Rose could run you $3,000 or more while you could buy a similar home in Lake County for a payment of $1,300 a month. The flexibility of not having to go to an office anymore has created a new housing demand we’ve not seen before. This in turn should continue to help fuel our beloved Lake County.
Santa Rosa, CA Median Home Sales vs. Sold Prices November 2020
Our price per square foot is up to $201. This varies considerably especially in and around Lake County as nearly every property is unique. Not just with different characteristics but in lot size, usability a home with 40 acres that could be used for medicinal use is going to be more valuable than a property with 40 acres that is mostly rolling hills and unusable. Even Zillow gets this all wrong most of the time which is why you need to consult with us your neighborhood specialist on pricing, demand, and marketing when it comes to selling your property.
When we look at list price vs. sold price the key takeaway here is expectations. Many sellers look at this number and think “Let’s list our home for more so we can negotiate the price down and still stay above what we want”. This is not a very good strategy as the higher you price your home above market value the less attention you get, the fewer buyers, and subsequently fewer dollars for the home. Pricing below the market guarantees every buyer will take notice and pay attention to your home. This will generate the demand you need to get the maximum value for your property.
With our list price vs. sold price ratio at 99.3%, a seller could expect to get an offer no more than 1% less list price and a buyer could expect to get an offer excepted at 1% less the listed price. This of course does not mean every transaction will go this route. But it does allow you to manage your expectation during the process.
The good news we don’t see the interest rate skyrocketing anytime soon. In fact, we think it will stay very low over the coming year and continue to fuel the housing market which as of today is one of the only economic strengths our country is seeing. If you plan to sell now would be the time. Waiting and hoping for more appreciation is risky when we are peaking in pricing. If you plan to buy. you’re going to need some help. It’s tough out there with multiple offers, few properties to look at. You’re going to need one of us to help navigate the market.
Local Housing Reports
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Each month we look at our most recent past months’ activity and compare it to a year ago and devise an overview of how the housing market is moving. During what all of us will remember as the COVID-19 Pandemic year has actually produced some extraordinary housing statistics. You probably know a REALTOR or two who are crazy busy. This is true for most agents who have been in business for 7+ years. The flip side is there are many REALTORS not having such a great year. The reason behind the 7+ year assessment is those agents who have been in business for longer than 7 years have a tremendous amount of past clients to pull from. We live in a world of distrust. It seems everyone is skeptical about everything. Our elections are questioned, the pandemic we are in is questioned and it seems as though trust has become a very big issue. Newer agents rely heavily on open houses, lead generation, and gaining trust from new prospects. Today that is challenging because consumers have such distrust they are tuning to referrals and recommendations more than ever. As one of the largest and most successful real estate teams in the county, we see our fair share of the market. RE/MAX Gold in Lake County has a near 16.5% market share which is about twice as much as our closest competitor.
Your Lake County Elite Partners
The opinions expressed in this report are those of Don McDonald, Founding partner, and REALTOR with RE/MAX Elite Partners brokered through RE/MAX Gold. They are not in any way intended to express what RE/MAX, RE/MAX Gold or any other agent or brokerage may think. It is my honest analysis backed but some market data. Check back each month around the 25th or so for an update as we continue down this path.
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