What is the local housing market going to do in 2019?
Still a Sellers Market
As your friends and real estate advisors, we want to keep you informed on
what we are seeing in the local real estate market and what we predict will happen in the coming year. Watching national news may give off the impression that the real estate market as a whole is softening. In our Open Houses and out in the neighborhoods showing homes the real estate market is a Seller’s Market in high demand.
What’s affecting our local market…
- The Fires. The 2018 wildfire season was the deadliest and most destructive wildfire season on record in California, with a total of 8,527 fires burning an area of 1,893,913 acres, the largest amount of burned acreage recorded in a fire season. So how has this affected the market? We lost close to 20,000 homes in Northern California, which reduced the overall supply of homes and sent thousands of people in search of a new place to call home.
- Relocations. Bay Area Buyers continue to flock to the area. This is a trend with no end in sight. You can’t really blame them for coming. Take the Bay Area Buyer in San Francisco who purchased a 4 bedroom home in 2014 for $1,315,000 (the median price at the time)… today the median price for that same home is now $2,083,000. That Buyer could pay 100% cash for a 4 bedroom home in El Dorado Hills (the current median price is $685,000) just from the equity gained in 5 years, have no mortgage, and be left with cash in the bank. You can’t really blame them for taking advantage of the equity advantage up here.
Seller’s Market. The large number of buyers indicates it is a seller’s market. Normally a declining market is a buyer’s market, and ours is not declining. Additionally, the months of inventory was below 3 months for the last 6 months of 2018. According to Trendvision:
Buyer’s market: more than 6 months of inventory based on closed sales
Seller’s market: less than 3 months of inventory based on closed sales
Neutral market: 3 – 6 months of inventory based on closed sales
This sign of a market decline is when the market changes to a buyer’s market. Unless something drastic happens in the market, it should hold steady as a seller’s market for 2019.
Corner on the Market
*Rate per Wellsfargo.com