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Solano County’s Housing Inventory Dropping Fast; How Long Will The Supply Last?
May 26th, 2009 categories: Benicia, Buying, Fairfield-Gr Valley, Market Update, Solano, Suisun City, Vacaville, Vallejo
Back in early January, if I had told you that we’d be talking about a scarcity of homes by summer, you’d have wondered who gave this man a license to blog.
Yet, at the rate the housing inventory in Solano County has been falling in recent months, we soon could be in a serious supply situation.
No one’s yet predicting a return to the real estate glory days of 2003-04-05, when the active listings in many local cities were counted in dozens and not hundreds.
But if activity remains as strong as it’s been since mid-January, we could find ourselves in a serious supply shortage in a very short time.
How short?
Well, it depends on the community. After tabulating the weekly statistics for yesterday’s Solano Weekly Homes Report, I decided to see just how many more weeks worth of inventory each city in our Solano market area really had, based on the recent rate of pending and closed sales in each community.
The results were pretty startling, as the charts below illustrate.
In Vallejo, as you can see, there’s now less than a seven week supply of homes, based on the average number of weekly pending sales so far this month.That compares to an almost 14-month supply that existed as recently as early March.
The story is similar in Fairfield, Suisun and Vacaville — with a 5-9 week supply today compared to a 12-18 week supply back in March.
And even in Benicia, where sales haven’t been nearly as strong as its lower-priced Solano County sister cities, the inventory is also down considerably — from a 10 month supply in March to a 2.5 month supply today.
Even if you base the results on closed sales rather than newly pending sales, the results are very similar, as the chart above clearly shows. Every city has a supply of active listings considerably lower than just a few months ago.
Just look at the weekly housing report and you can see how rapidly the inventory has plummeted. Vallejo had 899 homes on Jan. 12 and only 372 homes for sale today. Fairfield had 719 then and 284 now. Suisun was at 240 in mid-January and has a mere 64 active listings today.
No one really knows whether this trend will continue. Right now, investors and first-time buyers remain highly motivated, especially in the lower price ranges. Part of that is due to low interest rates, part to the $8,000 first-time buyer tax credit that expires in November, and part due to a general feeling that the local market has already hit bottom.
In other words, if you’ve been waiting for a larger supply of homes to choose from, that ship may have already sailed.
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