Danville Real Estate: 2016 Another Great Year in Real Estate?
So, the Fed finally raised interest rates. We have been expecting it for years. Now that it has happened our worst fears have not materialized. Mortgage interest rates are now lower than they were before the Fed rate hike. Go figure.
With the Fed’s action and the implementation of new stricter lending standards in October of 2015, I thought it might be worthwhile to examine the last 3 months of 2015 plus what we have of 2016 so far and compare it to the same time frame in 2014 to determine if any significant change has become apparent in the Danville market.
What we can see is the number of pending sales has stayed the same while the number of sold homes has slipped a bit. Pending sales are 51 in both time periods. This would be a great sign if sold properties were in lockstep with pending sales. More buyers and sellers are always good for the market. However, sold homes are down 5% from 194 to 184. This may or may not be a negative as it is unclear if this is a real sales decrease or if slower mortgage processing as a result of has retarded the movement of homes from pending to sold and this anomaly will self-correct over time. We will have to wait and see on this one.
List price for the sold homes has certainly increased moving from $1,013,605 all the way up to $1,136,792. That’s a big move of 12% in one year’s time. More surprising is the change in sold price which increased at the rate of 13% from $1,011,397 to $1,127,875. I would think a change of this magnitude at the slowest part of the selling season portends a strong year in 2016. If the current pending sales hold this price level it would be a really good sign for continuing market strength.
Before we get overly excited about the huge price change exhibited here, we should take a look at the relative size of the homes sold and the price buyers paid per square foot. It’s still positive, but a little less dramatic. Home size increased 5% which accounts for at least some of the reported increase. Price paid per square foot increased, from $427 to $469. That’s a significant increase of 10%, so people are a paying quite a bit more for a home this year as compared to last year. That is a pretty good sign that we are still in a hot market. Also, since the $469 per square foot is a bit more than was being paid last spring, it’s one more indication that our market is still hot and seasonality is not depressing prices.
Days on market increased somewhat from 33 days to 35 days. Both numbers indicate a hot market and given the 2 days increase in the time it takes to sell a home, one must conclude the market isn’t cooling. Once again, we cannot know at this time if this this 10% increase is being negatively influenced by TRID. Time will tell. Unless days on market spikes to 90 or more, the market remains hot.
One can never predict the next doomsday scenario that will send the real estate market into a tailspin. It’s only happened once in my lifetime and I don’t see another one on the horizon. I do believe the Danville Market has rebounded, is fully recovered and there is every reason to believe home prices will continue to advance. While I’m not predicting double digit appreciation in the year ahead, I suspect we will have another very good year in Danville Real Estate.
Trying to figure out your next move? Need numbers and answers to your fix up questions to make your decision? Nancy and I will be happy to provide you with a personal consultation, including a multi-dimensional analysis of your home’s current value, to help you figure it out. No charge and no pressure just our honest opinions. Please call 925-989-6086 or send me an email firstname.lastname@example.org.