HomeSection.comHomes By Herman

Are Solano Home Prices Now Heading North?

September 6th, 2009 categories: Benicia, Buying, Fairfield-Gr Valley, Market Update, Selling, Solano, Suisun City, Vacaville, Vallejo

Prices Heading North

Median Sales Price Appears To Be On Its Way Up In Several Local Cities…Others To Follow?

It’s hard to believe that only about six months ago we were still wondering how much longer before the local real estate market would finally start to show signs that better times were on the horizon.

Little did we know back then that prices were finally bottoming out.  And now, here we are in early September and not only are we continuing to see very strong home sales activity, but we’re now at long last, also starting to see a slight rise in home prices in some parts of Solano County.

August’s Home Sales Numbers

I just downloaded the median sales price data for our monthly Solano County Home Sales Report and as the chart below illustrates, home sales in several cities in the county have finally begun to head north.

Solano Monthly Median Home Sales Price Graph

I’m always hesitant to make too much out of a single month’s median sales numbers, for the smaller the sample size and the narrower the time period, the greater the chance that a few extreme random sales will skew the numbers dramatically.

A Little Caution Before You Get Too Giddy

That’s what happened to Fairfield back in June, when its median price, which had been hovering between the $180,000’s and low $200,000’s suddenly plummeted to the mid-$150,000’s. A month later, it shot back up to $200,000, illustrating how a single month’s data doesn’t always tell the true story.

But when you start to see the same thing happening over several consecutive months, then it’s a safer bet that a real story may be starting to unfold.

And that’s what I think is happening in some parts of Solano County.Pull Quote

Take Benicia, for example. The highest-priced city in Solano County saw its median sales price increase 7% in June, 8% in July and now another 5% in August.

Or Fairfield, where, the median price has jumped over 20% for two straight months (though, July’s increase essentially just made up for June’s aforementioned hiccup).

A First For Solano County In ‘09

August also was the first month all year when none of the cities in our Solano market area experienced a decrease in its median sales price. Every city either held its own or saw its median price go up.

County-wide, the August median price stayed the same, compared to July ($197,250). Individually, here’s how the cities shaped up (July in blue, August in red):

  • Benicia — $383,750 / $402,000
  • Fairfield-Gr Valley  – $200,000 / $244,425
  • Suisun City — $176,000 / $177,500
  • Vacaville – $230,000 / $230,000
  • Vallejo – $142,000 / $151,000

I think it’s too early to call this a real trend, but it certainly bears watching.

As you know if you read this blog regularly, homes in the most affordable parts of Solano County are usually getting multiple and above-asking-price offers. If that trend continues, then we may very well continue to see the median price continue to climb.

For sellers, this potentially emerging trend has to come as very welcomed news — and something that nobody could have predicted back in early spring, when prices were still free-falling with seemingly no end in sight.

Nobody Knows What The Future Will Bring

We’re now hearing that the banks will start putting more of their REO inventory on the market around the end of the year or the beginning of 2010.

A dramatic increase in inventory could take some of the steam out of the  market. So could any significant rise in interest rates. The market could also cool if the first-time buyer tax credit isn’t extended before it expires at the end of November.

So there are still a lot of “ifs.” But at least for the time being, things look a lot rosier for sellers than they have in a long time.

I’ll continue to keep an eye on things. So check back regularly.

Or, better yet, click on one of the buttons at the bottom of this screen to receive new HomeSection.com posts automatically, either via email or in one of the popular feed readers.

FURTHER READING

MARKET UPDATES

listings-by-mls-button news-by-email-button search-the-mls-button

This entry was posted on Sunday, September 6th, 2009 at 7:47 am and is filed under Benicia, Buying, Fairfield-Gr Valley, Market Update, Selling, Solano, Suisun City, Vacaville, Vallejo. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply