A Berkshire Hathaway Affiliate
Buy.Sell.Stay. January 2016 Market Report Wine Country
2016 Intero Real Estate Services Inc., a Berkshire Hathaway affiliate and a wholly owned subsidiary of HomeServices of America, Inc. All rights reserved. Data provided by Trendgraphix February 2016. All information deemed reliable but not guaranteed. This is not intended as a solicitation if you are listed with another broker.
Executive Insights Introducing Intero Real Estate’s January 2016 Wine Country Market Report It’s just the beginning of 2016, the year is new, there are endless possibilities, and we predict the future to be promising! At least that’s how Tom Tognoli, President & CEO of Intero Real Estate Services, Inc. feels. “I know the financial markets have been a bit rocky the last few months, but when you step back and look at the fundamentals of the Bay Area real estate market, it’s strong! Companies like Apple, LinkedIn, Netflix, Facebook, and Google are flush with massive amounts of cash, they are acquiring land and buildings to add more employees, and interest rates are still at ridiculous low levels. Combine that with the Bay Area being one of the nicest places on the planet to live and it makes me optimistic!” As January rounds out the holiday season, this year we found the Bay Area market started on a somewhat slow note – which was to be expected. As families celebrated the holidays, participated in numerous local Super Bowl events, and endured El Niño, housing sales slowed down. All of which is to be expected at this time of year. So as the weather becomes warmer and the flowers begin to bloom a natural increase in activity should present itself. Overall, we’re seeing the market to be slightly in favor of sellers. Inventory throughout the Bay Area has been somewhat low, giving buyers less to choose from and sellers more flexibility with higher prices. This can be largely attributed to the massive job growth throughout the area. California Association of Realtors (C.A.R.) projected statewide job growth to be 2.3% in California this year, creating the lowest unemployment rate we’ve seen over the past 5 years. To put it simply, more jobs means more people need houses, so as the year progresses, we will see more homes being built to accommodate new jobs, and more homes being put on the market. C.A.R. Vice President and Chief Economist Leslie Appleton Young echoes these sentiments, and provides a detailed outlook: “The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” she stated. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum in 2016. Additionally, as we see more sales shift to inland regions of the state, the changes in mix of sales will keep increases in the statewide median price tempered.” Okay – that may have been a little bit much and sounded a little confusing, we know. That’s why we’ve taken a much closer look, and broken it down into bite sized, easy to understand pieces for you. The market changes in meaningful ways each month, and we want to make sure that you’re always provided with the most accurate and up to date information possible so you’re always well informed. If you want to buy, sell, or just get a general sense of your neighborhood, this report has you covered.
Market Highlights Wine Country
Total Homes for Sale
39
Luxury Homes for Sale*
6
*Homes for sale above $3 million.
Total Homes Sold
Average Days on Market
Average List Price
Average Sold Price
24
$1,774,000
72
$1,029,000
Inventory Wine Country
Total Number Of Homes:
For Sale
Sold
89
91
68 46 39 24
27
29
18
24
20
32
33
30
33
41
41
48
40
50
55
58 48
57
54
50
59
62
60
76
70
82
84
80
89
93
90
87
100
10 0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Inventory Insights Following in December’s footsteps, sellers fared best this January. Total property sales in January rose by a third compared to this time last year, but dropped by a marginal amount compared to the previous month. This increase from last year is great news in the long term, and the overall low inventory is still pretty normal with seasonal factors taken into consideration. The holiday season is historically slower than the rest of the year when it comes to home sales; families want to spend time together undisturbed, the weather is less than ideal, people travel, large events like the Super Bowl happen – the list goes on. The total number of homes available for sale in January decreased fairly significantly compared to last year, and decreased slightly compared to the previous month. January was definitely a seller’s month; the extremely low inventory gave buyers a lot less variety in their house hunts, making sellers come out on top. But as winter passes and spring begins, we’ll begin to see more homes on the market accompanied by more sales. Buyers who are still willing to bide their time should take notice, because as the year progresses and the seasons change, the market will change, too!
Inventory By The Numbers Home Price Range
Homes For Sale
Year Over Year % Difference
< $500K
5
-81%
$500K $1M
19
46.20%
$1M - $3M
9
-40.00%
$3M - $5M
4
300.00%
$5M - $10M
1
0%
$10M +
1
-66.70%
Pricing Wine Country
Average Prices in $,000: 2500
Sold Price
$2,265 $2,078
2000
Active Price
$1,876
$1,924
$1,978
$2,070
$2,012
$1,844
$2,059 $2,048 $1,904
$1,999
$1,962 $1,800
$1,774
1500
$1,205
1000 $772
$823
$806
$769
$851
$1,076
$960
$942
15-May
15-Jun
$983
$919
$860
$974
$1,029
$643
500
0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Pricing Insights The average “For Sale” price in January was $1,774,000, a slight decrease from both last year and the previous month. The average “Sold” price saw a slight increase from last month, and a significant increase of 60% compared to last year, settling at $1,029,000. The difference between the average listing price and the average sold price is a decent chunk of change, which was great for buyers and really shows how impactful negotiation can be! It’s not all bad news for sellers, though; that substantial increase in “Sold” prices means that demand is already beginning to catch up with supply, and it will continue uphill from here. Since we are still getting over the fervor of winter and the holidays, the development of competitive pricing and negotiation may have a slow start. But as the year progresses, demand will continue to grow, leading to more competitive bidding.
Pricing By The Numbers
Average Price Per Square Foot.
$557
13.5% Month over Month
On The Market Wine Country
Average Days On Market
90
80
80 70
77
77
67
64
67 61
60
58
53
56
71
72
65
59
46
50 40 30 20 10 0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Days on Market Insights The Days on Market (DOM) shows, on average, how long properties are on the market before they sell. The amount of time it takes a house to sell can help us determine whether buyers or sellers are having a more favorable month. This January’s DOM was 72 days, just one day longer than the previous month and almost a week shorter than last year. In this sense, it was a great month for buyers; the longer a house is on the market, the more likely it is that there will be room for negotiation, and lowered prices. Sellers should not be discouraged, though! Homes are often on the market for at least a month, and while January’s DOM was exceptionally long, we’re still getting over the seasonal lull. Things will pick up as we spring into spring, and again, demand will continue to grow, eventually causing competitive bidding and much faster sales. Stay tuned, sellers!
DOM By The Numbers Home Price Range
Days on Market
Year Over Year % Difference
< $500K
109
6%
$500K $1M
64
31%
$1M - $3M
46
-137%
$3M - $5M
130
100%
$5M - $10M
0
N/A
$10M +
0
0%