It’s that time of year. . Diets have begun, the gym parking lot is full and sellers are getting ready for the Spring listing season! So is it a good time to sell? To buy? The 2017 Statistics are in, and (drumroll. . .) for the 6th consecutive year, homes in the Chico have appreciated. There is a “BUT” coming though. The rate of appreciation has slowed dramatically, and this Realtor thinks 2018 will be relatively flat in terms of home values.
The median home price in Chico rose 4% to $319,250 for the 12 months ended December 2017. Paradise and Orland also saw a rise in home prices to $247,000 (a 12.8% increase) and $234,000 (a 4.6% increase), respectively. A 4% appreciation is nice, but it is isn’t the crazy appreciation we have been experiencing since 2012. Something a little strange even happened this week – I logged into MLS to find a large number of price reductions. The new subdivisions in town have been steadily increasing prices as they release inventory, but we have actually started 2018 with a price reduction in one of the large subdivisions! And it isn’t entirely surprising to see double digit appreciation in Paradise. As Chico prices seem to be peaking, buyers will look to surrounding communities for more affordable housing. Prices in Paradise and Orland will likely continue to rise at a faster rate than Chico this year.
We continue to have historically low levels of inventory. There are 131 homes for sale in Chico today (there were 133 at this time last year). Our Month’s Supply of Inventory (MSI), which is the number of months it will take for all active listings (inventory) to sell if no new listings hit the market, fell to 1.7 months in 2017, down from 3-4 months in 2016. Paradise and Orland MSI also dropped to 2.6 months and 3.4 months, respectively. For perspective, we used to say, a normal/balanced MSI is around 6 months.
With so little available inventory, it is no surprise that homes did not stay on the market long. The median days on market for Chico were only 12 days. Paradise and Orland markets were a little saner with a median of 27 days (Paradise) and 37 days (Orland).
So what do all of these numbers and statistics really mean to you?
- Demand is clearly still strong
- Inventory is slim.
- I believe we have hit the affordability wall – we just don’t have income to support prices rising much higher.
- If you are a seller, don’t price your home higher than your neighbors sold for last year. . . The last sales comp likely IS the value of your home.
- If you are a buyer, you still have to move quickly. Homes that come on the market appropriately priced will still sell quickly.
If you are curious as to your home’s value, be sure to give us a call. We would love to discuss the market and your personal Real Estate goals!