The chart below shows the overall market statistics from April 2019 through June 20, 2020 Light green represents listing inventory for each month. Dark green shows all sold properties for the same corresponding month and the Redline shows pending sales. You can see that since the pandemic the number of new listings has dropped significantly while our Pending sales are skyrocketing. We expect July to a serious bounce-back month for sold properties as the pending turn to sell.
When tracking price per square foot, it is important to keep in mind many factors go into a home’s value. You can’t simply take the average square foot price and multiple this by your home size and get a real value. Often smaller homes have a higher price per sq. ft. than larger homes and land also factors into the value. Your lot size has a lot to do with the value of your home as does condition, upgrades, remodels etc.
The average Day On market also referred to as DOM in the industry has remained strong throughout this pandemic and continues to show no sign of slowing down.
This chart shows you the disparity between what homes get listed for and what homes sell for. It is a little misleading in that you might jump to conclude that homes sell for a lot less than what they are listed for. NOT TRUE. Right now in Solano County, the average home is selling within 30 days for 99% to 103% of its listed price. Homes that remain on the market for more than 30 days start to lose value and sell for as much as 3 to 5% less. This is a good reason to never over list your home.
This might be the scariest number out of all the slides. Our inventory has shrunk considerably. Albeit even a year ago we had inventory issues. Inventory is the very reason pricing remains so strong. With interest rates at all-time low buyers keep buying because it makes absolute sense to buy now and leverage the low-interest rate. From May 20, 2020, through June 20, 2020 inventory dropped to 0.9 months supply. That is a little over three weeks. This means if no other home got listed for sale we would run out of properties to sell within four weeks.
In conclusion what we see happening is sellers have been holding back from selling their homes for 90 days. Since the Pandemic started. We see this by the amount of homes in the MLS that have been withdrawn for sale, or temporarily off market. We can also see this in our inventory numbers and in the first slide we saw how low the new listing numbers have been. 50% lower than the same period a year ago. We do think this will change and when it does, we think we will see a substantial uptick in homes coming to market for sale. This could very well put a strain on the DOM and cause depreciation by as much as 5% to 15% in those homes listed for sale.
Imagine not just one home in your neighborhood for sale but 5, 6 or even more. With buyers having so many options sellers will have to lower prices to compete. This is probably the most important reason to sell now! Get ahead of the curve and beat other sellers to the market. As the news regarding how strong pending sales are turns to how strong sold home data is, sellers will begin to take-action and all those listings waiting in the weeds will come to market. Any depreciation that comes as a result of this pandemic should be short lived. 6 months to 2 years max.
As the saying goes with us REALTORS. We know what your home will sell for today, but we can never predict what the value will be in a year… Let’s chat!
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