Before I close and file away the sales numbers for 2011 I thought it might be of interest to take one last look at yearly listing and sales activity across the county. Perhaps studying the past will give us a glimpse of the future.
According to the sales numbers furnished by the El Dorado County Association of Realtors, county homes sales increased 14 percent during 2011 over 2010, ending the year with 2,400 homes closing escrow. REOs accounted for one-third of all sales while short sales made up another 25 percent. The percentage of shorts and REO sales will increase during the coming year. Lenders have finally developed more streamlined procedures for handling short sale requests and the delayed backlog of foreclosures is working its way through the pipeline.
The county’s lower home prices are attracting an increasing number of first-time buyers. During 2006, with the median price of a county home in the $500,000 range, two-thirds of all sales were to repeat buyers, many relocating from the Bay Area. Today that percentage has been reversed with first-time buyers discovering affordable homes and quality neighborhoods. The real estate market in our coastal communities is beginning to show signs of life but it will be two years before Bay Area sellers make up a significant number of county buyers.
The median price of a county home fell 24 percent to $240,000 between the first quarter of 2010 and the first quarter of 2011. However, during the third quarter prices started gaining traction with the median selling price finishing the year at $255,000, an 8 percent drop from 2010. Even more encouraging was the $262,000 median selling price for December — only 5 percent below December of 2010.
If, as Gov. Brown pointed out in his State of the State address, California “is on the mend” then our property values should also be mending. The climb will take years. It could be a generation before prices reach 2005/2006 highs. But the worst is probably over for housing values that have been falling like a rock since 2006.
The number of homes available for sale is declining. By the end of the year there were 770 active residential listings (excluding active short sales with accepted offers called “active contingent.”) Based upon our current number of sales, averaging 220 a month for the last six months, that’s a three-and-a-half months supply of homes on the market. During 2010 the county had a six-months supply.
With fewer homes for sale competition increased. Multiple offers became more frequent, as did the percentage of sales over the listed price. Although the average county home sold for 97 percent of its currently listed price, 40 percent of all sales closed escrow at above their listed price. Some listings that sold over the listing price were short sales that listing agents had intentionally underpriced; others were REOs. Regardless, when homes begin selling at or over the listed price it’s indicative of the market’s direction.
By year’s end only 128 REOs (16 percent of all listings) were listed for sale. Most lenders delayed the foreclosure process during the holidays. The number of foreclosures listed for sale will double during 2012. Short sale listings now account for 21 percent of available inventory. Both shorts and REOs are expected to account for the majority of all listings and sales this year.
Thirty percent of all county home sales last year were in the El Dorado Hills area. The 700 sales averaged $459,000 which was $33,000 less than the 650 sales in 2010. Fifty-two percent of all sales were short sales or REOs. At the end of the year there were 175 homes listed for sale, 45 were short sales and another 18 were bank REOs. Although the average selling price declined for the year, December sales were 25 percent better than December of 2010 and the average selling price was $15,000 better.
The typical selling price of the 320 sold homes in Cameron Park last year averaged $250,000. Fifty- eight percent were REOs or short sales. The yearly average was off $30,000 from 2010 average but by early summer prices and the number of sales began increasing. December sales (39) were tracking 12 percent better than a year earlier and averaging $256,000.
The third most active area in the county was the greater Placerville area which reported 255 sales for the year, averaging $213,000. Of that number, 152 (40 percent) were REOs or short sales. December sales were nearly the same as a year ago.
Those three areas accounted for 53 percent of all sales in the county. Other most active areas were: Pollock Pines/Sly Park with 217 sales during the year, averaging $156,000; Diamond Springs/El Dorado with 124 sales, averaging $206,000; Shingle Springs with 117 sales, averaging $342,000; and the Georgetown Divide with 225 sales, averaging $200,000.
Typically, November and December are the weakest months for sales activity. This year they compared favorably to May and June. More sales recorded in December than in any previous month since June. It was a strong finish for our fifth year of declining prices.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website: kencalhoon.com.