We started a new poll last month asking the question “As a buyer how much would you offer on a $400,000 home for sale in Fairfield?” The results are a little surprising.
With a total of 38 neighbor responses the majority (34%) think offering prices on homes will be at 100%. The second most votes (26%) are at the lowest offering spectrum 94% of listed price.
Based on our April closings we can see that in Fairfield the listed to sales price was 98% . This is a 1% increase from March 2019 and a -2% drop from same time a year ago.
You can also see our DOM (Days On Market) for April 2019 dropped to 44 days which is down 26. 7% from March 2019 and up 12.8% from the same period a year ago. This follows in line with our previous findings that our Spring 2019 market is brisk.
Let’s look at the rest of our numbers to see how our Spring is defining itself.
We listed 36.2% (203) more homes for sale in April than in March and only sold 87 homes in April which is -20.9% less (110) than in March. For the same period year over year, our inventory is up 46% while the sold properties are down -16.6% indicating a slower Spring than a year ago. I always like to look at Pending sales since they are a strong indicator of how our future looks. 1st quarter of 2019 shows 332 new listings and 277 sold properties which is -7.5% down from the same period in 2018.
In April 2018 our average Fairfield home price was $484,000. In April 2019 that same Fairfield home is selling for $468,000 a $16,000 different or drop of -3.3%. Our average 1st quarter price in 2018 was $472,000 and 2019 1st quarter 2019 home prices are $470,000 which is a small decrease of 0.4%.
Inventory continues to be the main culprit driving demand and pricing. As inventory floods the market prices decrease and as the inventory levels shrink prices go up. It’s not very un common to see matching model homes selling for $10k to $25k apart from each other in a month or two span. If three homes in the same neighborhood with similar size and features are for sale at the same time the price will slip because the buyers will have a few choices and the seller will want their home to be chosen first and will usually drop the price a bit.
On the other hand when you have few or even one home in the neighborhood for sale the price can be much stronger because the choice is limited. We see this a lot in Fairfield and one reason looking at a month standalone market report is not a very good indicator of where the market is.
As you can see from the chart above inventory was extremely low in March. this pushed prices up. In April or inventory shot way up which in turn decreased home values slightly. In March of 2018 inventory levels were 1.3 months supply. While in April 2019 inventory levels remained consistent at 1.2 months supply. Like many of us, REALTOR’s will attest to last Spring was on fire! This was because the inventory was low. 1.2 months indicates a newly listed home could reasonably expect to sell with this time period. This would be a strong seller’s market.
In March 2019 inventory levels slipped to 1.4 months then show way up to 2.3 months in April 2019. 2.3 months is our highest level of inventory in the last 12+ months. If we have another major or even equal spike in inventory in May 2019 we could be in for price reductions this Summer.
We’ve been listing more homes than we are selling for most of the last 12 months. This, in turn, has slowed the market some. It is still very much a seller’s market and buyers should be aggressive with their offers. I continue to hear buyers say “I am waiting for prices to drop. I covered this before but think it’s worth saying again. If prices drop, interest rates will most likely go up. In fact, rates are predicted to go up through the remainder of the year. Unless you plan to live in the home for a year or two you should be buying when you can afford to not trying to gamble with the market. Buying now is a smart decision.