What Gives with Our Local Housing Inventory?
The El Dorado Hills housing market has entered into its peak annual spring season where buyers and sellers get most active. Only this year there’s something off: Not a lot of homes are going up for sale.
Mortgage Rates Have Locked Sellers in Place
According to Trendgraphix, (see chart below), only 78 El Dorado Hills homes were listed for sale in March. That’s above the 68 listed in March 2022 and the 34 in March 2021 and it’s far below the more typical 162 and 160 homes listed for sale in March of 2020 and 2019.
Demand is again outstripping supply in El Dorado Hills.
What’s gives? Well, it’s as if sellers have gone on strike.
Anyone wanting to sell right now is likely giving up a 2%-3% mortgage rate in exchange for one in the 6% range. This means sellers need a pretty serious motivation. Otherwise, they are choosing to stay in place for the time being.
In theory, this would mean there would also be a shortage of buyers as the would-be sellers are also buyers removed from the market. Interestingly, this is not the case in El Dorado Hills.
18 of 33 (55%) closed sales in March were transactions with multiple offers. This is a significant increase from last fall when only about 1-in-3 sales saw multiple offers.
The supply-demand equation has moved back into sellers’ favor. The proof is in a 12% increase in average El Dorado Hills home sale price in the last 6 months. This is a swift turnaround from the drop we saw in average price the second half of last year.
You Can Capitalize On The Home Sellers Strike!
Mortgage rates have stabilized and are lower than last fall. This is great news for buyers. Today’s challenge is the “sellers strike” and fewer homes for sale.
Buyers need to be fully approved by a lender and ready to make an offer when you find your home. The benefit is that if home prices continue their trend up, you are building equity immediately!
Fewer Homes, More Competition, More Opportunities.
Locally, the number of homes for sale is well below pre-pandemic numbers. What does that mean for your home purchase?
Make sure you understand our market.
There are two significant driving forces in real estate—the supply of homes and interest rates.
Low Supply + Lower Rates = Price increases.
Many headlines point towards lower prices. We talk to buyers daily, who are waiting for “home values to drop.” While we can’t determine the future, the reality is that there is more competition for fewer homes and values are trending up in El Dorado Hills this year.
(Anecdotally, one house we were watching that came on the market the end of last week went into contract on Tuesday with 11 offers!! We’re not saying that the market is repeat of the past two years, but for the right house, there is an amazing amount of demand!)
Real estate is local! We are happy to talk about specific local trends to help you build equity!
Happy Househunting!
Real Estate Questions? Let us buy you a cup of coffee and answer them for you!
