There is less demand for county homes this year than last. The number of existing homes closing escrow in March was 18 percent less than a year ago, according to the El Dorado County Association of Realtors, and April sales are tracking 20 percent fewer than April of last year.
The pace at which homes are selling is also slowing. Last spring, two-thirds of all homes sold within the first 30 days of being listed and their average selling price was slightly more than their listed price. This year, 51 percent of homes sell within the first 30 days of their listing at 98 percent of their listed price. Still not bad in comparison to a few years back but an adjustment from last year.
One reason attributed for weaker home sales numbers is the price bump over last year. According to DataQuick, a real estate data and analytics company, the median price paid for a county home in March was $357,500, a 25 percent increase over March 2013. Median prices are climbing along with the temperatures. According to the most recent sales data from MetroList, the median selling price for April is $375,000. If that holds, it will be the highest median price paid for county homes in five years.
Higher home prices and fewer sales are happening all over our region. Sacramento County’s year-over-year sales are down 15 percent but prices are up 20 percent. Placer County’s median selling price of $360,000 is up 14 percent but yearly sales are down 15 percent and Nevada County’s median selling price of $340,000 is up 13 percent and its number of sales is down by 26 percent.
A word of caution, however, about applying the 25 percent year-over-year price increases across the county equally. There are wide differences in the rate of appreciation in our different communities. The average selling price of a home in El Dorado Hills for March was $604,000, up 24 percent from last year, but Cameron Park’s average selling price last month of $350,000 was only 8 percent above this time last year. Placerville’s $296,000 average selling price was a 21 percent year-over-year increase but Diamond Springs/El Dorado prices bounced up 54 percent.
While the current pace and demand for county homes isn’t what it was a year ago, they are averaging within historical norms. As an example, over the last 12 years monthly sales at this time of year have been averaging 200 to 225 a month and that’s where we are for this spring. The 200 existing home sales last month wasn’t as good as the 320 reported in March 2005 but much better than the 104 sales reported in March 2008. Last year there was a small real estate bubble inflated by investors and pent-up demand. That’s evaporated after investors pulled out of the market so we are just getting back to a more normal market.
Although buyer demand is down from last year, the number of homes for sale is about the same. As of last week there were 750 homes in our county listed for sale. At our current number of monthly sales that works out to a three-and-a-half-month supply of inventory — considered pretty balanced between supply and demand. Sacramento County, on the other hand, is unbalanced with only a one-and-a-half-month supply, meaning it would take about that long to sell all homes on the market.
Where is all the new construction? The BANANAs (Build Absolutely Nothing Anywhere Near Anyone) people are circulating different petitions to stop this wild reckless plundering of sacred open space in imminent danger of being asphalted over with new housing developments. Although well-intended, they shouldn’t worry. The existing Measure Y impact fees and development costs for new single family homes nearly guarantees that no significant numbers of affordable housing will ever be built in El Dorado County. In fact, new home sales are 25 percent less this year than last and the average selling price of the 15 new homes that closed escrow last month was nearly 39 percent higher than last year.
Another unintended consequence of the last stop-growth (Measure Y) initiative created a huge price differential between new homes and existing resale homes. In our county the median price of a typical new home is 78 percent higher than the county’s median priced resale home. This is the largest price difference between new and existing home sales in the region. In Placer County the price difference between its median priced resale homes and new is only 14 percent.
The county’s added impact and development fees for new homes ensures that only the very wealthy can afford to buy a new home if they want to live here. This price differential is separating our county into two distinct priced regions. We have El Dorado Hills where the median selling price is more than $600,000 and we have everyplace else. Remove El Dorado Hills from county sales numbers and our median selling price for the rest of the county drops below $300,000.
We all want to keep our county’s rural character; however, we must provide future housing opportunities for more than the just the very wealthy.
Ken Calhoon is a local real estate broker. He can be reached at [email protected].