January sales numbers are in, and the Folsom housing market, like many others around the state, suffers from high demand on a short supply.
Compared to last year at this time, sales were up, listings were down.
It's a familiar story, yes?
The month ended with 49 homes for sale in Folsom, and 48 sold.
Worse yet is the type inventory available. Whether for affordability or psychological reasons, many buyers try to stay around or under $500,000. The average home sold in Folsom in January was just under 2100 sq ft, and went for $526,000.
23 buyers snagged homes for under $500k in Folsom last month, but today, out of 54 homes for sale in Folsom, only 8 are below $500,000.
This means that buyers have to either step up their price, choose another community, rent, or wait for something to happen. Looking at those options...
- Stepping up in price. If you can't afford it, you can't afford it, but let's look at the numbers. According to Bankrate.com, the average 30 year fixed mortgage for California borrowers is 4.2% today. If you were to raise your price range by $50k, that would increase your payment by about $235. If you can afford that, and really want that Folsom house, go for it, but if not...
- Choose another community. While the surrounding areas are seeing an increase in prices, many still offer relative bargains compared to Folsom. Rancho Cordova, for example, has 24 homes priced below $450,000. To get under $400,000, your best choices may be in Elk Grove (51 listings), Roseville (26), Citrus Heights (38), or the City of Sacramento, which has over 500 of them. If you insist on Folsom, you may have to...
- Rent. This might be your best bet if you gotta have Folsom, want to wait for an increase in inventory or for something to cause downward pressure on prices. The issue in Folsom is that the rental market is just as tight as the re-sale market. I called Andrea Hamburg of www.HomeRunRentals.com, and she confirmed what I already knew; rents in Folsom are soaring. She has a 2 bedroom home renting for $1650, and a $2100 square footer for $2195. She also said that for every rental they list in Folsom, they get a couple of dozen good applicants, and a few not-as-good. There's competition rentals as well as purchases. So, some people are...
- Waiting for something to happen. Waiting for what? Interest rates to rise? They have, and the general consensus is that they will continue to creep up. This can cause affordability issues, forcing a drop in prices. When that happens, the houses may be cheaper, but payments may be close to the same. So, you might the the that 2100 sq ft house in Folsom for less out the door, not saving on a monthly basis. Also note that with our increased population and household formation, more buyers coming from the Bay Area, and lack of tradespeople to build more houses, the supply is likely to stay strong while inventory remains low.
I expect to see more Bay Area people coming up this way, selling their 80 year old cracker boxes for $1.5 million, and perhaps buying some of the higher end homes here. I've had a few of those recently.
If you are a home owner who's been waiting until 'next year', well, it's here, and buyers are waiting for you.
Like me, nearly every active Realtor I know has got a list of clients waiting for the right home to come along.
Do you want to buy, sell, or just cry on my shoulder? Drop me a line.
Steve Heard is a Realtor with Keller Williams in Folsom, and is owner of MyFolsom.com
Reach him at 916 718 9577 or email firstname.lastname@example.org. CAL BRE#01368503