How can this continue? At some point, these prices have to come down … right?

It was a question we’d considered for months, as we weighed our options of continuing to rent or test the waters of homeownership.

My friend offered a short laugh. 

“Nah, real estate in California doesn’t go down … only plateaus and then up again.”

After six years of watching prices continue to climb, we jumped in as first-time homebuyers.

That was 2006. 

BY THE NUMBERS A snapshot year-over-year look at the month of October real estate market stats for western Nevada County. $490,000 — Median sold price (2020) $412,00 – Median sold price (2019) 12- median days on market (2020) 47 — median days on market (2019) 155 – homes sold (2020) 121 – homes sold (2019) 289 – total homes listed for sale (2020) 501 – total homes listed for sale (2019)

The following year, we learned that, in fact, California’s real estate does decline — particularly amid a complete collapse of the market across the country.

(No worries, my friend. Names will be withheld to protect the innocent.)

We’ve been considering the same question, now years later, as homeowners on whether it’s time to consider selling. 

OK, truth is my wife has been considering such a question and I’m panicking to change the subject before any actual discussion of substance can be had, because … well … I don’t want to move!

But the market now seems to once again have our home valued somewhere in the neighborhood of our initial investment. So the conversation typically begins and ends with her seeing opportunity with each new listing, and me being a stick in the mud who can’t imagine moving outta our home.

Of course, we’re both right to have such perspectives.

The roof over our head is both our home and our investment. And it would seem likely this market has invited similar discussions in our neighborhood, and those across the region and the state, for that matter.

SUPPLY & DEMAND?

As I continue to learn about this industry on a daily basis, it seems the driving force behind what experts continue to call this current “hot market” basically boils down to the simple supply and demand principle.

There are currently 289 homes for sale in western Nevada County.

That’s 42% fewer than the 501 that were in the market this time last year.

And of the 155 homes sold in the month of October, the average days on market was 12 — that’s no typo: twelve days — and the median price of those sales was $490,000 — an 18.9% increase over October 2019’s median of $412,000.

The reduction in monthly inventory has been consistent since the end of the first quarter, which was on pace with 2019 numbers. Both the second and third quarters of 2020 saw significant dips in inventory in year-over-year comparisons. In fact, not once in a single month last year did western Nevada County’s inventory of homes for sale drop below 300. 

October marked the fourth-straight month below that threshold in 2020.

But, despite the reduction in inventory, there were 30 more homes sold last month in western Nevada County than in October 2019. And 2020 in total is on pace to surpass 2019 sales. 

And, of course, all of that brings us back to question on the table, whether we should be considering the current state of the market and a potential return on our investment, just as we did years ago when we first became homeowners.

Which reminds me, Hon.

Not to change the subject, but can you believe Notre Dame is ranked No. 2 in the nation? 

Brian Hamilton is assistant to the regional manager for the Betsy Hamilton Real Estate Team. Contact him at BrianHamiltonRE@gmail.com.