The Napa Real Estate Market Today
In the past year and a half since the 2017 fires, the Napa real estate landscape has had some unpredicted shifts. Most significantly, it has shifted quickly from a seller’s market to a more balanced market. Right after the fire, sellers were in control of the market, not many were selling and those that were selling could ask a premium price for homes. In that time as the market has settled, inventory has increased significantly and prices have stabilized in recent months. That said, buyers are starting to take a more relaxed “wait and see” attitude. One trend that is driving the increased inventory shift is the fact that sellers are moving out of state. The cost of living, an older demographic and the availability of reasonably priced housing are some of the reasons for this exodus. According to a poll conducted by Edelman Intelligence, it found the chief reason for trend isn’t wildfires or earthquakes, but housing cost and availability. By leaving California, homeowners can get more economical housing in other states and retain funds for retirement. This along with jobs and a lower tax base, it is also driving some millennials out of state to purchase their first homes.
Statistics Tell the Story
Statistically, according to the California Association of REALTORS, the Napa County median home price continues to grow year after year, but sales have dropped. The median price of a home in Napa County for March 2019 was $699,000. That is a 3.6% price increase from March 2018 when the median price was $675,000, but the year to year sales were down 27% in the same time period. Additionally, while the median price increased, the price per square foot was down 4.3% in Napa County. Overall home sales in all of California have been down for the past 11 months. The good news, “time on market” for median priced homes fell below 30 days for the first time in 4 months. The same cannot be said for the luxury market homes. In the quarter ending March 2019, homes in Napa County priced over $1M, the “days on market” was 157 and the median sales price was 96.3% of asking price. But this is an improvement from the same quarter in 2018 where “days on market” was 312. The highest sales price for a luxury home in the first quarter of 2019 was $13.5 million.
What may have caused some of these statistics? Historically, homes sell faster in the spring and summer. In 2019, because of the extraordinary amount of rain in the North Bay, we did not really have a spring market. Now that the weather has calmed, we are seeing more and more houses coming on the market in the second quarter of 2019. And because of the increased inventory coupled with low interest rates, we are seeing more buyers who are taking their time selecting a new home. It’s a more relaxed “wait and see what’s coming on the market” attitude.
What That Means
We are seeing an extremely well-balanced market going into the summer months. The shift is good for both buyers and sellers. We are still seeing multiple offers on homes which is good for a seller, and more choices available which is good for the buyer. Interest rates are low which is also driving a strong market. With inflation slowing, rates will hopefully remain unchanged for the rest of the year. This along with a healthy inventory has increased the number of people who may want to buy up into a bigger home. In the recent past, these sellers have been fearful of putting their house on the market and then having nowhere to go once their home has sold. All of this has contributed to a much more stable and balanced market.
Additionally, lenders have more options available for first-time home buyers or veterans. There are several CalHFA loan programs that are available through a CalHFA-approved lender. Information is available at calhfa.ca.gov. For veterans who would like to buy, CALVET has programs and can be reviewed at calvet.ca.gov/homeloans.
So, what does all of this mean for the rest of 2019? It means that the Napa real estate market is alive and well. It means there are plenty of buyers and sellers, and there is something for everyone seeking the pride of homeownership.
From the first-time home buyer to someone seeking a luxury estate in one of the most beautiful places in the world – “The American Dream” can still be found here.