Market Recap for January 24, 2022

A look at the weekly #’s in the area

Getting Super Granular

Every morning I look at the list of new homes on the market, closed sales, pending sales, and price drops. I’ll often preview vacant homes just so that I can specific floor plans fresh in my mind so that I can better help my clients. I’m consistently awash in national numbers but the larger companies are consistently regional – which would be fine if they considered south Napa & Solano counties as it’s own region. Unfortunately, they lump us in with the greater Bay Area at large and we get caught in the maelstrom.

To that end, I’m going to be getting super granular this year. Although I won’t be totally eschewing the national trends, I’ll be focused on tracking our tiny regional numbers on a weekly basis looking to spot larger trends 📈 as they actually happen, rather than after. I’ll be sharing that information with you both here as well as a light-hearted recap in my weekly newsletter. You can sign up for it here.

Is Inventory Really an Issue?

There has been a significant demographic shift in the last couple of years that’s bringing in a new wave of buyers – Millenials. I hate to say it because it makes me feel like I’m on the blaming-them-for-everything bandwagon, except that I’m not. Most of them are finally at an age where they have enough earning power to purchase their first homes. Collectively, they are as large a buying cohort as the Boomers (they should also be a major political force, but that’s a different issue).

At the same time, new construction costs are soaring and new construction starts are way behind historical levels. With Boomers holding onto their homes longer, there is less inventory at the top so the top tier of move-up buyers (middle age couples with kids) have nowhere to go…which means that couples with younger kids can’t get out of their starter homes…and with no starter homes available, first time home buyers are SOL.

If you haven’t seen Office Space, I just can’t help you…

In case you missed it, this is a problem…I have absolutely no clue as to how much the 317 proposed single family homes at Watson Ranch will help. If these units depress any home prices, it will likely be in the older parts of American Canyon – Rancho del Mar, Victoria Faire, McKnight Acres, etc. However, judging by the new construction prices in Cordelia and the Fairfield/Vacaville area, the price point will be too high to damper AC prices.

Housing Sales to rise 5.8% in 2015

According to Fannie Mae, housing prices are expected to rise 5.8% this year.  The increase will come mostly from resale of existing housing stock rather than new starts. According to Fannie Mae’s Economic & Strategic Research Group, sound economic fundamentals will grow the economy 3.1%.  This uptick will help to drag the national housing market upwards.  On a more local level, we are seeing homes in the $250,000 – $350,000 leave almost as quickly as they come onto the market.

There are currently 22 homes on the market in American Canyon at an average list price of $537.406.

As of February 5, 9 homes sold in American Canyon.  This is down by 2 homes year-over-year but, and this significant, inventory is up almost 300% year-over-year.  There were only 8 homes on the market this time last year.  At this point, the American Canyon real estate market looks very healthy starting out the year.

Home prices throughout Napa County rose for the year, almost back to pre-recession levels. However, the market seriously leveled off beginning last summer – prior to the earthquake.  The big question is whether the County (in general) and American Canyon (in particular) can continue the same pace of home valuation through the upcoming year.  In a panel discussion presented by Pacific Union in October 2014, leading economists felt that Napa County home prices would continue the upward trend (5-7%) through 2015 and then level off for the next two years through 2017.

Will Baby Boomers Move?

According to the latest infogaph from CAR’s “One Cool Thing” I think not!  59% say that they won’t sell their home when they retire.

I think that it would be equally interesting to see how many baby boomers actually plan on retiring! Why won’t they sell? 78% of them actually like the homes that they live in. Although over 50% also say that they don’t feel like they’ve saved enough money to retire. That’s a big number. A bigger number is that only 4.7% say that they plan to downsize.

That means there won’t be a significant turnover in housing any time soon.  With continued lack of inventory it looks like buyers will continue to compete with each other for the same few properties that are coming onto the market.

Buyer Optimism at New High

The latest “cool thing” infograph released by CAR shows that 81% of buyers believe housing prices will continue to rise over the next 5 years.

This is virtually double the number in 2011 and shows that confidence in the housing market continues to grow. While much of the data that is being released these days shows something of a schizophrenic market, almost all economists agree that the underpinnings of the current real estate market is strong.  While some areas within the Bay Area are continuing to see price increases  at a stunning pace, much of the rest of the SF Bay Area market has been leveling out, suggesting that we’ve shifted from a seller’s market this past spring to a buyer’s market this fall.

It will be interesting to see how sellers react to a glut of inventory that is just hanging around this fall.  Will they pull their homes and wait for the traditional spring selling season or will they stay active and hope for the best?

10/3/14 – AmCan Market Update

Preliminary sold numbers show a slight retreat year-over-year, but overall the American Canyon housing market is relatively strong and stable, particularly for those 1st time home buyers.  The number of sales dropped by almost 50% year-over-year with a similar – but lesser decline in median price sold. There has been speculation that the earthquake has had a dampening effect on the market; coupled with an ever increasingly earlier start time for school and then a typical leveling out of the market, this is almost to be expected.  In fact, it may even be healthy for the market in the long term since these double digit price increases were untenable for any great length of time.

With interest rates still low (and not expected to rise until after 1Q), it’s a great time to buy in the city. Currently there are 26 homes on the market at a median list price of $485,400. In particular, we had the opportunity to see 417 Knightsbridge Way a couple of weeks ago.  I almost can’t tell you what the home looks like inside because the backyard is absolutely stunning because of it’s size. This is listed by Henny Gho with Eagle Vines at $459,000. It backs up to open space and so the backyard feels even larger than it is.

This home was sold this past June, renovated and is now being flipped. Updated kitchen, hardwood floors throughout; the home has a newer roof. 4 beds, 4 baths at approx. 2000 sf. Light and airy, I loved having the chance to see this home.  Much like yesterday’s tour, this home had a uniqueness that is often missing in the AC.  Contact me if you are interested in previewing it.

(707) 853-0797 or richard.peterson@pacunion.com

 

10/2/14 – Napa Tour Update

What a great day for tour, today! For the first time in a while, there were some truly custom built homes.  As a Realtor(R), especially in American Canyon, I get used to seeing cookie cutter homes built and designed by the typical developer.  And while these homes aren’t bad, by any stretch of the imagination, it becomes very easy just to run in, check out the floor plan, nod knowingly and then scoot on to the next home.  Today was definitely not that kind of day.

There were 2 homes on the first half of the tour that really stood out for me.  The first is 1610 El Centro Ave (off of Jefferson).  It’s listed by Brendan Lesti with Windermere Napa Valley Properties and is selling for $729,000.

LR Fireplace

Master Bedroom

LR Bar

These pictures do not do this home justice.  It is a flip. It sold last October for $470,000.  In fact, I remember seeing this home last year and the difference is just stunning. Gone is the dated fireplace, replaced with a new, sleek marble fireplace; the orange shag carpeting has been taken out and replaced with strand bamboo flooring throughout the home. The kitchen has been almost completely redone with quartz counters and a 5 burner commercial refrigerator and a built in wine bar. The home is 4 beds, 4 baths and approximately 2458 square feet on almost 1/5 of an acre. It’s vacant and easy to show.

One of the great things about living in the Napa Valley is the views. This one is taken off the balcony from 170 Canyon Dr in the Silverado Country Club, listed by Teresa Davis with Pacific Union at $3.495M. The house is immaculate and is custom built. You can literally see across the entire Napa Valley. Unfortunately, my phone just can’t quite do it justice.

My last stop on the morning half of the tour was 1061 McKenzie Drive off the Silverado Trail (about 1 block down from First St). Listed by Karen Cherniss & Kim McPherson (more Pacific Union Agents) and offered at $975,000 this is a one-of-a-kind home. This home was on earlier in the spring (with a different brokerage) and brought back by Karen & Kim.  It was a last minute ad-on for me and I am extremely glad that I stopped by.  Unfortunately, I left me phone in the car so no (blurry) pics of this one.  It’s a little over 1 acre and the property goes all the way down to the Napa River.  Short walk to Oxbow (you can see Copia from the deck!) but I felt like I could be out on Big Ranch Road, 20 minutes away from town. This particular home is for a buyer looking for rustic charm while still being close to everything! I’ll be honest, when I walked in I felt like I was back home in UC Berkeley Professor’s home. It’s open this weekend, but is also easy to show.

Happily, the second half of the tour met the high standards that the first half set. 251 Caswall St. is one of those homes that just grows on you. Listed by Rob Pursell with Sothebys and offered at $1,15M. Single story, ranch style home; 3 beds, 2 bath and approx 2602 sf.

The lot is about 1.7 acres with a small “gentleman’s vineyard.” It’s on City Sewer & water which is a huge bonus for these homes on the outskirts.

The last home that I saw this morning was 4036 Browns Valley Rd. Set back from the street, this 5 bed, 3.5 bath, approx 3059 sf home exudes personality. It’s listed by Lauren Nicholsen & Elise Currey with Pacific Union (yep, we had a lot of them on tour today!) and offered at $1.395M. Traditional farm house, it’s the first time that it’s been on the market in about 30 years. The sellers have obvious pride in ownership of their home and upgrades are evident throughout.  They created a large formal dining room to allow them to entertain.  There is color throughout the home but is muted (and enhanced) by the black and white flooring as well as the black and white tiled kitchen. Complete with a large lawn and gated pool, this home is just special.

As always, if you’re interested in this or any other home, give me a call and I’d be happy to set up a showing for you.

Rich Peterson (707.853.0797; lic# 01931815)

Jumbo Borrowers get a “Jumbo” Break

Buried in the news cycle last week was a piece on CNNMoney titled, “For rich people, mortgages are getting cheaper and easier.” Our very own Pacific Union blog picked it up today and I thought that I’d add my own 2 cents (give or take a half pence). According to the article, many individuals who qualify for a jumbo loan are now getting a better rate on their mortgage than the average person. According to the PU blog, in fact, interest rates on jumbo loans have been lower all summer long. For example, last week the average rate on a jumbo loan was 4.30% compared to 4.39% for a 30 year, conventional mortgage. While .09% doesn’t sound like much, when talking about a $625,000 loan, the money ads up quickly.

In addition to this, it appears as though jumbo borrowers are also getting a break on credit scores as well as the amount of money required to put down. Many of these jumbo borrowers are now only required to put 10% down and some aren’t even required to buy private mortgage insurance (or PMI). PMI is put in place to protect banks from loss on high-risk loans. Apparently, if you have enough money, you aren’t high risk. Add to this that the minimum qualifying credit score has dropped from 700 to 650 on these jumbo loans and you have a perfect storm for the more affluent borrowers.

Unfortunately, this has little to no trickle down effect on first time home buyers. Although the minimum credit scores to obtain a loan have eased over the summer, for many people who are saddled with student loan debt, their own home is still out of range.  In addition, many people who have defaulted on or had to short sell their homes during the financial crisis are still forced to sit on the sidelines, waiting for these blemishes to be erased on their credit report. However, with the glut of distressed homes run through the market over the past couple of years, many of these people may now be in a position to come back to the home buying arena.  Perhaps this is why Freddie Mac’s Chief Economist (Frank Nothaft) put out an advisory notice today saying that he expected 2015 to be the best year for home sales since 2007.

9/19/14 American Canyon Tour & Housing Update

Light tour today in American Canyon. Actually, there was only 1 home one tour: 2 Entrada Circle. Exclusively listed by Reinhard Auf Dem Venne with Agents Without Borders, this 4 bedroom, 3 bath, ~3528sf home is offered at $599,500. This is an exquisite home that has been well maintained by the current owners. There is an expansive, combination living room and dining room with high ceilings a ton of natural light as you walk into the home. Nestled in the back of the home is the kitchen, dining nook and family room. Updated kitchen with granite counter tops opens out to the family room with a fireplace. Downstairs guest suite and immaculate garage. Upstairs there is a large bonus room with French Doors that is perfect for a play room or office. Spacious master suite that includes a large walk-in closet. The owners are in process of moving out and it is easy to show.  Give me a call @ (707) 853-0797 to set up an appointment.

On another cheery note, American Canyon now has ample inventory whether you’re a first time or move-up buyer. 27 homes are currently on the market at a median list price of $499,250. 30 homes have sold so far in the 3rd Quarter at an average price of $435,025 or $197/SF. The total number of units is down slightly from the same period in 2013, but the average sales price is up dramatically.

 

 

Aug 4 Weekly RE Roundup

What? Millenials are being shut out of the San Francisco Housing Market??! No kidding…

According to RealtyTrac, San Francisco is the least affordable city for Millenials looking to buy a home.  It’s a good thing that they aren’t looking…oh wait, according to last week’s infograph by CAR, 31% of the Gen Y’ers still think that buying a home is a good investment.  With Alameda County coming in at the 8th least affordable housing market for Millenials where does this leave them? Increasingly, it may put them at odds with investors who are looking for bargains as well as pushing them further out into the suburbs.

Meanwhile, As I snooped around the Pacific Union Blog, it seems that the San Jose Mercury News reported that the sales volume for $1M+ homes is at an all time high.  Over 5,700 homes have sold for over $1M in the second quarter alone…more good news for Millenials.

The National Association of Realtors recently released a study showing that Millenials are increasingly out of the housing market nationwide (not just the SF Bay Area), and have the lowest rate of home ownership in almost 2 decades.  This isn’t exactly bad news, however.  According to the study’s summary:

The strange pattern of more homeowners but a falling homeownership rate…will continue for the next 2 years…because household formation of young adults who had been living with their parents will seek out their own housing with an improving economy, first as renters before the shift to homeowners.

So then perhaps not all doom and gloom for the millenials after all. They’re graduating, living with their parents until they pay down some of their debt, moving out on their own and then making a responsible decision to purchase a home once they can afford it.  So perhaps the real reason we’re seeing the lowest rate of homeownership among Millenials in a generation has less to do with homes being unaffordable and more to do with making sure that they’re solvent before purchasing a home.  This sounds – to me – that perhaps they are taking some sound financial advice rather than that the sky is falling because they are being prudent.  Just a thought.

 

Napa Brokers Tour 7/31/14

I have to admit, I have a pretty great vocation: Not only do I help build communities by helping people purchase their (for right now) dream homes, at least twice a week I get to run around and look at other people’s homes, architecture, design styles, etc.  It’s a pretty unique situation and I feel pretty lucky that I get to be a Realtor for a living.  Days like today, where it’s bright and sunny in Napa and not (yet) too hot make Brokers Tours a highlight of the week. And then!! when I have the opportunity to see a few special homes on top of it, it makes it even better.

It’s not entirely fair to say that a $2.145M custom-built home nestled within Browns Valley is the home of the tour, but it was.  19 Huntington Ct is listed by Stefan Jezycki with Pacific Union and is a 4 bedrooms, 4.5 baths, ~5700sf; a creek runs through the back yard.  My hope for the general public is that there is an open house slated for the weekend of August/9-10 because it is worth seeing. First showings are on August 4th with 24 hour notice.

There are a couple of other gems that I found along the way today.  The first home that I think is absolutely great is 755 Joseph Ct, about 1.5 blocks from Pueblo and literally across a cul-de-sac from O’Brien Park and McPherson Elementary School. Just an absolutely wonderful location. This home is also exclusively listed by Stefan and is offered at $514,900; 4 beds, 2.5 baths and ~2000SF, it shows much, much better than the pix.  

 

I’m not always a fan of the split level homes, but for whatever reason this one really works for me.  Hardwood floor throughout the entry way, main living area and kitchen provide a polished and updated look. Stepping down, there is a separate family area with fireplace and a sliding glass door that opens out into the backyard. There is a medium-sized patio with arbor; the backyard has recently been landscaped using a black tanbark & mulch mixture with a mind to the current drought, but also making perfect soil in case someone wishes to re-sod it. It’s open on Sunday from 1:30 – 3:30pm; it’s also easy to show, contact me to make arrangements to view it.

My other favorite home today was 71 Homewood, exclusively listed by Tracy Warr and offered at $350,000. Wonderful 2 bed, 2 bath home, ~900SF. This home was bought as an REO in 2009 and the current owners did a remarkable and loving job of updating this home. 

Hardwood floors throughout the primary living area gives an elegant touch. Black tile in the kitchen gives it a contemporary feel while the white cabinets provide a rustic counterpoint that I think works very well. Huge backyard with room for a pool, lawn and a standing hammock. This would be a great starter home for a young couple or family. 1 hour notice to show, the home is not currently scheduled to be open this weekend (although that could change); they’re taking offers on Wednesday 8/6 @ 5pm so take some time to get over there.

Contact me for any of your real estate needs: 707.853.0797 or richard.peterson@pacunion.com