FAIRFIELD — Inventory is king.
As Solano County home prices continue their upward climb – rising about 25 percent in the past year – the number of homes available remains few.
In February, for instance, only 358 homes sold in the county– the fewest for any month in nearly six years.
That’s bad news. The good news? Inventory should grow in coming months.
“We’re seeing more listings come on the market,” said Amanda Mills, the 2015 president-elect for the Northern Solano County Association of Realtors. “It’s loosening up a little bit. But when the market really changes, it can change overnight.”
Mills, a Realtor for Coldwell Banker Kappel Gateway in Vacaville, said the inventory has been tight for the past few years, but now that prices are increasing, more homeowners see the possibility of selling their homes.
That knowledge, says Mills, is power.
“And if you connect with a Realtor and can get a real value of your property – and get data about sales in real time – you can zero in the value of your home,” she said. “People are very surprised.”
Many homeowners don’t know their property has regained much of the value lost during the Great Recession. Many discover that they have equity for the first time since the housing bubble burst in 2007, dropping the county’s median sales price from $420,000 to less than $200,000 in less than 18 months.
Mills isn’t alone in seeing homeowners come on the market as sellers.
Denise Kirchubel, a Realtor with Re/Max Gold in Fairfield, said there are more traditional sales happening now than there have been in the past few years.
“We’re seeing more up-and-down buyers,” she said. “We have people who now feel comfortable moving up or down to a more- or less-expensive house. We didn’t have that for a while. Now the buyer-seller situation is really that (with both buyers and sellers). We didn’t have sellers for a while, especially equity sellers.”
Kirchubel said the main reason for the increase in inventory is the rising prices.
However, it’s unlikely that we’ll see the rapid increase of early 2013 continue – months when the median price for homes went up from less than $200,000 to more than $250,000.
“I think for the coming months, we’ll see more of a gradual increase,” Kirchubel said. “We’re not going to see the spiky stuff. And that’s good – I’d rather see a stairstep, where the price goes up, levels off and then goes up again. That’s better than the other way.”
Mills said that two major factors will play a big role in whether prices continue to increase – inventory and interest rates. If both increase, the prices won’t likely increase much.
All parts of the market should loosen up in the coming months, but Mills said the higher end will likely come first.
“When (the market) came back, the lower end was almost impossible to get into,” she said. “Then it was the homes for $250,000 and below. It’s truly like a ladder – but $350,000 and below is still tight.”
Kirchubel is pleased because the inventory – which has such an impact on everything – is better.
“We’re looking toward a 90- to 120-day inventory,” she said. “I have another agent I work with who expects it to be six months. It’s turning into a longer period.”
Reach Brad Stanhope at 427-6958 or [email protected] Follow him on Twitter at www.twitter.com/bradstanhope.