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Brian Hamilton: Home sales slow for second-straight month

 

The temperature isn’t the only thing cooling off heading into fall, as home sales slowed for the second-straight month, down 33% from the total homes sold two months back in July.

September sales show a shift from the recent red-hot record sales from late 2020 and the first six months of 2021, though the median price of homes sold in western Nevada County— $542,000 — remains 14% higher than in September 2020. A record $565,000 median price was recorded in both July and August, before September sales showed a 4% decrease in price.

But while we wait to see if prices continue to trend downward, stepping back for the larger view helps pull into focus how western county shifted in sales to such record price levels.



There’s no question the pandemic-powered sales frenzy helped push the market, but the shift started well before 2020.

Back in 2017, from January through September, there were a total of 21 homes sold in the $900,000 to $1,100,000 price range and just 12 priced higher than $1.1 million sold. This year, through September, 68 homes have sold between $900,000 and $1.1 million and another 85 have sold for more than $1.1 million.



That’s 367% growth in the number of western Nevada County homes sold at the highest price ranges ($900K and above) in just five years time.

And the 153 homes that have sold for $900,000 and higher in 2021 was 151% more than the 61 sold in that range through September of 2020.

ON THE FLIP SIDE

Those listing their homes for sale have enjoyed the record-setting seller’s market of recent months, but the buyers on opposite end of the negotiations have had, well, the opposite experience.

With their offers competing among multiple others on the same property — many above asking price and many being cash offers — for buyers, and their agents, the struggle has been real.

That’s been particularly true for first-time homebuyers, if they can find a home in their price range to begin with.

Just as is the case on the higher end of the market price, the number of homes on lower end has shifted significantly.

Five years ago, in 2017, there were 257 homes sold for $300,000 or less.

This year, a total of 67 homes have sold in that price range.

In fact, the 885 homes sold below $500,000 through September 2017 comprised 76.7% of all homes sold in western Nevada County.

Through September 2021, just 41.4% percent — or 581 total units — have sold for $500,000 or less.

LOOKING AHEAD

In its annual market forecast released Thursday, the California Association of Realtors predicted supply constraints and higher home prices will bring California home sales down slightly in 2022, with a predicted decline of 5.2% in existing single-family home sales.

But the association also predicts an increase in price by that same percentage.

“The California median home price is forecast to rise 5.2% to $834,400 in 2022, following a projected 20.3% increase to $793,100 in 2021 from $659,400 in 2020,” the association states in the report. “An imbalance in demand and supply will continue to put upward pressure on prices, but higher interest rates and partial normalization of the mix of sales will likely curb median price growth. Additionally, a shift in housing demand to more affordable areas, as the trend of remote working continues, will also keep prices in check and prevent the statewide median price from rising too fast in 2022.”

The state association’s president, Dave Walsh, said a slowing market will offer some needed relief to homebuyers.

“A slight decline next year from the torrid sales pace of the past year and a half will be a welcome relief to potential homebuyers who have been pushed out of the market due to high market competition and an extremely low level of homes available for sale,” said association President Dave Walsh. “Homeownership aspirations remain strong and motivated buyers will have more inventory to choose from. They will also benefit from a favorable lending environment, with the average 30-year fixed rate mortgage remaining below 3.5% for most of next year.”

SEPTEMBER SALES

Though western Nevada County might not be as an affordable area as it was just five years ago, it remains a more affordable option in comparison to communities on the coast and in the big cities of California.

And for the first time in a year, the number of options on the local market is nearing 300, a number not eclipsed since June 2020, when there were 356 homes listed for sale.

But that’s still far from the pre-pandemic “normal” inventory of 2019, when the average was 491 homes were listed monthly and a high of 647 homes were on the market in July of that year.

In terms of total sales, as was the case in August, September 2021 saw a decline. The 132 homes sold was down from 148 in August, and down from 199 in July, which marked the most homes sold in a single month of 2021.

Prior to the pandemic, there were an average of 127 homes sold monthly in 2019.

September’s average days on market was 12 days for the third-straight month. Homes listed for sale in western Nevada County have not averaged more than 20 days since March 2021, when the average stay was 33 days on market.

Brian Hamilton is the assistant to the regional manager for the Betsy Hamilton Real Estate Team (Lic.# 01936209) at RE/MAX Gold in Grass Valley. For more information, contact him at Brian@BetsyHamilton.com or visit http://www.BetsyHamilton.com

BY THE NUMBERS

September home sales in western Nevada County:

$542,000 — Median price (2021)

$475,000 — Median price (2020)

12 – Days on market (2021)

14 – Days on market (2020)

132 – Homes sold (2021)

155 – Homes sold (2020)

292 – Homes for sale (2021)

292 – Homes for sale (2020)

Back in 2017, from January through September, there were a total of 21 homes sold in the $900,000 to $1,100,000 price range and just 12 priced higher than $1.1 million sold. This year, through September, 68 homes have sold between $900,000 and $1.1 million and another 85 have sold for more than $1.1 million.Five years ago, in 2017, there were 257 homes sold for $300,000 or less. This year, a total of 67 homes have sold in that price range.
Graphic by Brian Hamilton

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