Best in the region
With regional home sales at their lowest level in ten years and available housing inventory at record highs, why is the median and average selling price of a home in El Dorado County continuing to increase? Could our rural county be exempt from the price corrections taking place all over Northern California or is this just a monthly anomaly?
According to DataQuick Information System, the median selling price of an existing home in Sacramento County last month was $345,000, a decrease of 5 percent from October of 2005. In Placer County, the median of $435,000 was an 11 percent decline from a year earlier. Nevada County’s median price dropped 9 percent, Yolo County lost 5 percent, Sutter County dropped 11 percent and Yuba County’s median price declined 8 percent from October of 2005. During the same time period El Dorado County median sale price increased 2.7 percent to $450,000. So what’s up with that?
Regional new home sales followed the same pattern of declining prices with an exception of El Dorado County. Placer County’s median price for a new home at $475,000 was a decrease of 14 percent from last year. In Sacramento County the median price of a new home declined 13 percent to $398,250. Yolo, Yuba and Sutter all reported lower prices on builders new homes. But El Dorado County gained 6.7 percent to finish the month at $590,000.
One reason county home prices are holding on both new and resale is that we are not over-stocked with unsold new homes. The largest decrease in home prices have occurred in counties that experienced the most amount of new construction over the last five years and now have the largest amount of new unsold standing inventory. When the real estate market turned south in the summer of 2005, builders initiated incentives and cash discounts in order to stimulate sales. Individual sellers have had a difficult time competing and have lowered their prices accordingly.
The delay in our county’s General Plan prohibited approval of many new developments and much of the building frenzy that occurred in most of the region skipped over El Dorado County. Large track builders in search of level land and a pro-growth political climate have not been the only ones by-passing the county. Investors and flippers who made up nearly 25 percent of all home sales in Sacramento and parts of Placer County during 2004 and 2005 never ventured above Folsom. There are many reasons to live in El Dorado County but our selection of rentals isn’t one of them. Neither is easily accessible public transit or close-in employment centers. Investors and flippers preferred homogeneous neighborhoods, affordable prices and new homes on small lots. Their past avoidance, has contributed to our currently stable home prices.
Not surprisingly, the number sales of both new and resale homes have declined in each of our eight-county region from 2005 levels. The percentage decrease looks like this: Yuba –54%, Nevada –35.7%, Sacramento –35.2%, Yolo -34.7%, Sutter –33.7%, Placer -21.1%, Amador –26.9% and the best in the region is (surprise) El Dorado County at –13.5%. While the decent is universal, the rate appears to be less for our county.
A slow-growth political climate and lack of urban infrastructure has prevented our rural county from achieving similar record high growth rates experienced in other parts of the region. Those same perceived real estate market handicaps are now holding area prices and sales above the regional average. If this trend continues through the winter, our local market could be in a good position for a turn-around in the spring.
Buyer’s uncertainty with the direction of the market is the number one factor now affecting local sales and prices. We do not have an abundance of low-end condos or high-end new homes lingering on the market. Investors and flippers haven’t been dumping their rentals. We don’t have endless tracks of vacant new homes. What we do have is a great opportunity for homebuyers.
According to DataQuick Information System, the median selling price of an existing home in Sacramento County last month was $345,000, a decrease of 5 percent from October of 2005. In Placer County, the median of $435,000 was an 11 percent decline from a year earlier. Nevada County’s median price dropped 9 percent, Yolo County lost 5 percent, Sutter County dropped 11 percent and Yuba County’s median price declined 8 percent from October of 2005. During the same time period El Dorado County median sale price increased 2.7 percent to $450,000. So what’s up with that?
Regional new home sales followed the same pattern of declining prices with an exception of El Dorado County. Placer County’s median price for a new home at $475,000 was a decrease of 14 percent from last year. In Sacramento County the median price of a new home declined 13 percent to $398,250. Yolo, Yuba and Sutter all reported lower prices on builders new homes. But El Dorado County gained 6.7 percent to finish the month at $590,000.
One reason county home prices are holding on both new and resale is that we are not over-stocked with unsold new homes. The largest decrease in home prices have occurred in counties that experienced the most amount of new construction over the last five years and now have the largest amount of new unsold standing inventory. When the real estate market turned south in the summer of 2005, builders initiated incentives and cash discounts in order to stimulate sales. Individual sellers have had a difficult time competing and have lowered their prices accordingly.
The delay in our county’s General Plan prohibited approval of many new developments and much of the building frenzy that occurred in most of the region skipped over El Dorado County. Large track builders in search of level land and a pro-growth political climate have not been the only ones by-passing the county. Investors and flippers who made up nearly 25 percent of all home sales in Sacramento and parts of Placer County during 2004 and 2005 never ventured above Folsom. There are many reasons to live in El Dorado County but our selection of rentals isn’t one of them. Neither is easily accessible public transit or close-in employment centers. Investors and flippers preferred homogeneous neighborhoods, affordable prices and new homes on small lots. Their past avoidance, has contributed to our currently stable home prices.
Not surprisingly, the number sales of both new and resale homes have declined in each of our eight-county region from 2005 levels. The percentage decrease looks like this: Yuba –54%, Nevada –35.7%, Sacramento –35.2%, Yolo -34.7%, Sutter –33.7%, Placer -21.1%, Amador –26.9% and the best in the region is (surprise) El Dorado County at –13.5%. While the decent is universal, the rate appears to be less for our county.
A slow-growth political climate and lack of urban infrastructure has prevented our rural county from achieving similar record high growth rates experienced in other parts of the region. Those same perceived real estate market handicaps are now holding area prices and sales above the regional average. If this trend continues through the winter, our local market could be in a good position for a turn-around in the spring.
Buyer’s uncertainty with the direction of the market is the number one factor now affecting local sales and prices. We do not have an abundance of low-end condos or high-end new homes lingering on the market. Investors and flippers haven’t been dumping their rentals. We don’t have endless tracks of vacant new homes. What we do have is a great opportunity for homebuyers.
posted by Ken Calhoon at 7:57 AM
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