As we approach the 2014 selling season, I’ve received questions about how this year will unfold compared to the banner year we had in 2013. In a normal market, the main selling season runs from about February through May or June. Last year we experienced a strong market that carried over from 2012. Prices increased substantially, inventory levels were extremely low, and it was common to see homes selling in the first week of being listed with multiple offers; many offers above the asking price.
As prices have risen, more homeowners are now sitting in equity positions. Many wanted to move but sat on the sidelines waiting for the opportunity to sell their home as prices rose. In June/July 2013 interest rates jumped up. That event, and the fact that we were exiting the selling season, slowed market absorption. In the 2nd half of 2013, many owners put their homes on the market after the run up in prices. In many cases, these homes were priced with the assumption that prices were continuing to increase every month as was experienced in the first half of the year. Where does that leave us?
Every area is different. Lower priced homes in Placer and Sacramento Counties continue to see high demand and low inventory. However, homes in higher priced areas are trending toward (or perhaps are already in) what is typical of normal market conditions. In higher priced areas, home appreciation has been very subdued over the last six months. These homes are not seeing multiple offers as they did one year ago, it’s taking much longer to sell those homes, and inventory levels are up.
Don’t get me wrong. I’m not saying the market is declining. But I am saying that indicators point to higher inventory levels in 2014, slower price appreciation, and sellers should expect that it will take longer to sell their home than it did in 2013; unless the home is in the lower priced areas or offers something highly desirable and considered a one-of-a-kind offering. Those owners who are considering selling their home will do well to find an excellent real estate agent who will guide them in pricing their home appropriately. Otherwise, “frustration” may be the word of the day.
Below I’ve included some charts for the 95765 zip code. This demonstrates where we are in the market now as we approach the selling season. If you would like to view charts on other surrounding areas, please visit our website: www.quarantarealestate.com. Click on the Market Trends Reports in the left column. If you have questions about these or other areas, feel free to contact us. And remember, Real Estate Market Trends are fluid and can change on a dime.