Home prices in Lake County are still on the rise despite the recent issues with major fires in the area, prices have jumped to their second highest level in well over eight years, making them closer to their replacement cost for new construction.
Home sales remained robust and has sustained a good pace for the last few months, which is normal for Lake County; however, the market is healthier than it has been in the last six to eight years. June, July and August have historically been the highest closing months of the year. Closed escrow sales in Lake County totaled 82 units in July, according to information collected from the Lake County Multiple Listing Service (MLS).
The July figure was down 24.8 percent from the 109 level in June but up 3.8 percent compared with the home sales of 79 in July 2014.
“While July home sales rose at the statewide level, the market is still constrained by low housing affordability and a tight supply in areas where job growth is robust, such as San Francisco and San Jose,” said California Association of Realtors (C.A.R.) President Chris Kutzkey. “Neighboring regions such as Napa, Solano and Sonoma are experiencing strong sales due to their affordability and proximity to job centers. However, housing affordability could become a bigger issue in these areas if housing demand continues to grow but supply can’t keep pace.”
The median price of a Lake County home rose 0.5 percent in July to $211,000 from $209,900 in June. July’s median price was 25.6 percent higher than $168,000 recorded in July 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.
Home prices are finally getting to the level where the cost of the home is close to what it would cost to build. When this happens Lake County should see more land sales and new construction started as home building speculators look close at their bottom line. Lake County is still one of the most affordable places to buy and live in California.
Other key points from Lake County’s July housing report include:
• Even though the number of sales has declined last month, they still remain strong throughout the year. The number of active listings also remains strong. Statewide, active listings increased 3.3 percent from June but dropped 4.5 percent from July a year ago. Regionally, the number of active listings increased 1.7 percent in the Central Valley but declined 4.1 percent in Southern California, and 13.3 percent in the Bay Area.
• The July Unsold Inventory Index rose from June’s four months, coming in at six months, but was the same six months in July 2014. The index shows the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.
• The median number of days it took to sell a single-family home rose in July to 90 days compared with 61 days in June and was up from 56 days in July 2014.
• Mortgage rates increased in July, with the 30-year, fixed-mortgage interest rate averaging 4.05 percent, up from 3.98 percent in June and 4.13 percent in July 2014, according to Freddie Mac. Adjustable-mortgage interest rates ticked down in July, averaging 2.52 percent, down slightly from 2.54 in June and 2.39 percent in July 2014.
Ray Perry is the 2013 Realtor of the Year for Lake County and works for CPS Country Air Properties. He can be reached at 277-8000.
