We get asked all the time…”How’s the local real estate market doing?” Here’s this month’s answer.
With one quick glance you can tell that March 2018 in El Dorado County was a much different real estate market from this current Spring. Over 100 more homes were For Sale in El Dorado County this year, and yet 20 fewer homes actually sold. What does this mean? Speculating, we’d say it means there are fewer home buyers in the market and/or homes are being priced higher than a buyer perceives the value (IE the homes for sale are over priced). Why would a home buyer see homes as overpriced in an upward market? In the last half of 2018 we saw mortgage interest rates rise to above 5%. This means that a home buyer’s purchasing power was diminished. For the first time in 5 years home buyer’s really felt that they weren’t getting enough home for their hard earned dollars.
We have definitely seen an increase in the amount of home buyer’s beginning in January 2019, when interest rates once again dropped to the mid-4’s. And as you can see from the chart, home owner’s are still gaining equity – roughly 4.3% in the last 12 months. Om a $100,000 home, that’s $4,300. On a $500,000 home that’s an additional $21,500.
Important points to note:
- As a home buyer this may be the last time we see interest rates below 5% for several years. Interest rates effect buying power and monthly payment as much or more than the actual price of the home.
- Home buyer’s can also expect some negotiation power, especially if a home has sat on the market for over a month.
- Home seller’s can expect to sell their home for more than last year, however they need to be really careful with pricing. Buyer’s are VERY aware of value and will let a home sit on the market or come in with a low offer if the home is over priced.
OVERALL, now is an excellent time to both buy a home or sell a home in El Dorado County. It’s a balanced market that provides lots of opportunity for both home buyers and home sellers.
Give us a call for more information on your particular scenario. We’re here to help and information is free 🙂 530-350-6335