We have seen a rather serious increase in year-over-year price increase in the Livermore Valley.
From March 2012 to March 2013, there has been a 37.5% increase in the median sale price of a single family home! The average time on market has dropped during the same time period from 64 DOM (days on market) to only 21.
Why are we see this significant change in market activity? There are 2 primary reasons: Record low interest rates and low housing inventory.
This being said, in just the past few weeks, we have seen a noticeable uptick in new listings hitting the market. Generally, as we head into summer, we see a larger quantity of homes hitting the market, as this is when families begin planning their move or upgrading to a larger home. Much easier for a family to move in the summer when children are out of school. However, with the increased inventory, we will see an increased appetite for housing, as those families need to find their replacement homes.
We’re also seeing increased inventory due to homes rising above the ‘under water’ line. When a homeowner owes more than there home is worth, it makes it very difficult to sell, or only possible to sell as a short-sale. As prices increase, the market is self-correcting the problem of value, allowing these homeowners to sell their homes without distress and actually return a profit. Much better on the psyche to sell when there is positive worth!
My outlook through the summer is a slight continued uptick in the appreciation in home values, but not rocket-roaring up to the moon appreciation as we’ve experienced in the last 12 months.