Low Inventory and High Demand Drove Prices
Summer is officially over, and it was hot, in more ways than one. This summer brought record temperatures and record housing numbers.
Whether it was migration away from the Bay Area, low interest rates, low inventory, FOMO (fear of missing out), or all of the above, housing was in high demand and the prices reflect that.
Sales vs Inventory
271 Folsom homes were sold between June 1 and August 31. That figure is down from 308 last year, but it’s right around the average we’ve seen over the past 5 years or so. Low inventory it the problem. There just weren’t enough homes on the market to meet the demand.
While we were averaging 90 sales per month, there was an average of 63 homes on the market at any given time. As a result, prices continued to rise.
The lowest priced sale was $425,000, for a 3 bed 1 bath 1086 sq ft home, built in 1955, and the highest was $2.25mil for a 6271 sq ft home built in 2018.
The over all average sale was $761,271, a whopping 18.5% increase of 2020.
Buyers had to act quickly
Also with high demand and low inventory come quick sales. It took on average, 9 days to sell a home in Folsom this summer. That’s down from a 25 day average a year ago.
And with that comes multiple offer situations. 68% of homes sold had multiple offers. The highest number of offers on a Folsom home this summer was 34, and yours truly wrote the winning offer on that one.
The number that may surprise you is the percentage of cash buyers. Many seem to believe that prices are being driven by cash buyers, mostly from the Bay Area. That’s not actually the case. Only 17% of sales were paid for with cash.
We don’t know how many of them were from the Bay Area, but we do know it’s not a cash-buyer market.
So, where do we go from here?
We’re starting to see the seasonal slow down. As our kids go back in school, and we turn our attention to the upcoming holidays, it’s typical to see a slowing at this time of year.
We can expect to see fewer sales, longer sales cycles, and perhaps softer prices as we head toward the end of the year.
Today, there are 77 homes for sale in Folsom , averaging 27 days on market.
Some might see that as proof of a market correction, but for now, we’ll call it the seasonal slow down.
What do you think? Are you surprised at the numbers? Where do you think we’re headed?
If you have questions or comments, drop me a line.
Steve Heard – EXP Realty of California, Inc. – 916 718 9577 – steve@theheardgroup.com – DRE#01368503
