Many people believe spring is the best time to sell a house, so they take their property off the market during winter. It is precisely this behavior that could make your property a hot commodity during the coldest months.
As I compare housing statistics from April 2015 to statistics in October 2015, I see some interesting trends. January through April, the average time on the market for residential properties in inland Mendocino County was 113 days. Through October, the average time on the market was 91 days. Homes are selling faster now than they were in spring. During the first four months of the year, 75 homes sold. Through October, 217 homes sold; that’s an average of 19 homes per month for the first four months compared to 24 homes per month through October, or put another way: a 26 percent increase in the number of homes selling per month. This market is heating up and, therefore, this suggests it is not a good time to take your property off the market.
I knew a real estate agent years ago who consistently sold more houses in the month of December than during any other month. Why? Because, he explained, everyone else stops working. As the holidays approach, sellers do not want to be bothered with the hassles of having their property on the market, and Realtors—who also have families and personal lives—tend to slow down, too. When fewer homes are on the market, the laws of supply and demand are in your favor: fewer available homes means less competition for your property. If you’re motivated to sell, do not let the holidays scare you away.
This is not only a good time to sell compared to last spring. It is encouraging to look at housing statistics from a year ago. Last October, the median home price in inland Mendocino County (excluding Hopland) was $308,000. This October, the median price was $345,000. That’s a 12 percent increase. If you’re a buyer, I’d say, get into the market while the getting’s good—before prices rise even more, not to mention interest rates.
Bear in mind, “median” is not the same as “average.” Median means there are as many properties with a higher price as there are with a lower price. If you have ten houses evenly spread between $300,000 and $400,000, your median is $350,000. If eleven more houses are put on the market and they are all priced at $290,000, the median price is $290,000.
Average means you add the total of all the prices and divide by the number of properties. Averages can be more dramatically influenced by outlier properties (super expensive or super cheap).
Market forces can certainly influence the median housing price. If there’s a run on higher priced or lower priced homes, the median price can change, but the individual price for many houses will remain consistent. Let’s say COSTCO is finally allowed to open its doors in Ukiah, and they pay salaries between $30,000 and $40,000/year, so a dual-income family makes $70,000. This means the family can afford a $400,000 home at today’s interest rates, so the increased demand for homes in that price range may drive up prices for houses between $350,000 and $450,000. If you are selling a mobile home or a million dollar ranch property, dozens of new COSTCO employees looking to buy a home will not affect the value of your property much.
Regardless of price, the financial factor that always affects the housing market is interest rates. According to Ginny Richards at Sterns Lending, rates are down about three-eighths of a percent compared to last year. I think rates will remain stable until the presidential election is over next year, but my crystal ball doesn’t always work, so don’t count on it.
If you have questions about real estate or property management, please contact me at email@example.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.