Why aren’t there more home sales in Mendocino County? That’s a question on the lips of Home Seller’s, Real Estate Agents and Lenders alike right now. Earlier in the year we were able to attribute the low sales volume to a low home inventory. Now, inventories are up across the board and interest rates nearly the lowest they’ve ever been, so what’s the deal Mr. Realtor Man?
Let’s take a look at the Ukiah market as an example and you can extrapolate from there. If you’ve been following my monthly market watch updates, you know what the numbers are for the past year. You know that prices have recovered somewhat from the horrific plunge they took during the recession getting homeowners almost back to being right side up on their mortgages. Notice that I said almost. Last month the median sale price for a home in Ukiah was $350K up nearly $50K from July 2014 and up $73K from October 2013. (based on single family residence sales in the 95482 zip code) However, the average list price for homes in the same area is $418,219.00, telling me that the average homeowner needs a higher price to make a profit on their home and in many cases just break even.
Are you with me so far? Prices are up and we are almost back to good for the majority of homeowners freeing up much needed inventory. The thing that has not increased is Buyer incomes. The median family income for Ukiah according to the last census is $44,958.00 annually ($43,721.00 Countywide). Based on $44,000.00 and the assumption that the Buyer’s credit is average to good, the maximum loan amount for a conventional loan (5% down, fixed rate, 30-year amortization) is $250,000 and that falls to $225,000 for FHA financing (3.5% down). I guess you know what comes next… most Buyer’s just can’t get there from here.
So what does all of this mean? Why aren’t there more home sales in Mendocino County? If you are a Seller , you need to understand that there are fewer Buyers out there that can actually afford your $350K house than you might think there are. If you are a Buyer, you may need to come to terms with the idea that we will need to range further afield to find your dream home. Of course every individual and situation is different and this is a broad generalization of our local market but it is just that, a picture of our local market. These are the numbers that matter here and now. If you are thinking of Selling or Buying a home please call or email me and we’ll work out a plan that is best for you.