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It might not come as a surprise to you that I find doing a deep-dive into the Humboldt County Real Estate Market to be a fascinating practice. Because of our smaller, insulated area, it’s so interesting to me how one variable can upend things, and get the rumor-mill going. I believe that happened last Spring with the Earthquake followed by some real Humboldt-wet-Winter weather. This Summer market report has stats to back up the idea that the HumCo market is relatively stable despite its seasonal variations and susceptibility to whims of culture, economics and forces of nature.Where we left off with the Spring report, I had said that I believe that observing what happens during our Spring and Summer markets will dictate our new normal (barring any major upheavals, of course). This Summer report uses the stats from the Spring Market – April-June, so definitely stay tuned for the Fall market report in October if you want an even better sense of wether or not our market has reached a good, new stable spot. Lets jump into the stats. I do like to start with Volume, because it’s a simple indicator. Most people want to know what VALUES are at – but Volume definitely plays into that.
As of this writing, there are 426 residential properties on the market in Humboldt County, representing a volume of $234.8M in active properties.
Sold Volume indicates how much of that inventory is moving overall, and has gone as low as $21.3M (in January 2023). It’s been steadily increasing since then, which we would expect to see moving into Spring.
The June Sold volume was an eager $47.52M, more than double January’s.
If there was concern that our local market had tanked since the interest rate hikes of Summer 2022, the stats show that the Sold volumes for July 2022 were $51.98M and stayed robust until November, when we started to see the seasonal downward trend.
Just assessing the overall Sold Volume tells us that we are still selling real estate here in Humboldt, and without too much variation in overall production.
However, if you’ve read my reports before, you know that I do believe in details, so let’s just take a look at the Southern Humboldt Stats, which skew our overall numbers just slightly. While the overall sales in SoHum haven’t changed dramatically in the last year, it is interesting to assess the Active List Volume versus sales.
Sold stats peaked last August at $4.3M and stayed elevated through October until they tanked at $658K in November. Meanwhile, Active List volume at the end of last Summer through Fall held steady around $50M. January was the low point at $41M and last month was at $65M. For June of 2023, Sold Volume for SoHum was $1.87M.
WHAT DOES THIS MEAN?
Well, a few things.
First, we know the land-grab-green-rush that came with legalization caused real estate prices to soar in that area. We also know that we are in a period of time when these properties are no longer at a premium and are being sold for a fraction of what they were purchased for. When you consider that out of the 426 residential properties available in Humboldt, 166 of those are in Southern Humboldt, you can see that there is a disproportionate number of listings available there based on the population. Thus, assessing COUNTY-WIDE stats for patterns in our market isn’t ideal because of that unique situation happening there.Nevertheless, coastal Humboldt is still seeing a good amount of listings, and while it feels like inventory is “low” to buyers, the reality is that properly priced homes, especially at the lowest price point, are being sold right away. Sellers who are testing the market with higher price points and/or multi-family properties and fixers are sitting on the market a bit longer.
This leads us directly into the Absorption rates, which indicate how quickly homes are selling in a given area. During peak markets, we see low rates, telling us that properties are getting into contract right away, and with shorter escrows. The longer the absorption rate, the longer it takes to sell a home. As mentioned many times before, this number is only a general indicator. The wide variety of homes for sale in Humboldt County dictate that the more desirable a property, the more likely it will sell quickly. Also, this number also factors in cash-only fixers and overpriced properties, so, it isn’t a precise indicator of how long it would take your home to sell, or how long you should let a property sit before writing an offer… more on that in a minute.
Eureka’s absorption rate was hovering steady between 1.65-1.67 months from December -May. This lack in variation is a good example of how our Winter market is more predictable than during other times of the year. In June, the number increased to 2.31months. The jump in the length of time it took for properties to sell in Eureka could be from a variety of factors. My best guess is that we had more people putting their properties on the market in Spring, and that provided buyers more options, and more time to shop around. Also, when there are more properties on the market, buyers don’t have to get quite as aggressive with their offers and can have slightly longer escrows (45 days instead of 30). Even still, selling your home in 2.31 months, is still pretty quick.
It’s interesting to note that a change in stats like this could be wildly interpreted in other ways – one could just as easily say that the longer absorption rate in June meant that our market was hitting a slower period – which isn’t true. The other sales stats bear that out. This is just a reminder that no one statistic is a full indicator of “market wellness.”
Mckinleyville had a relatively steady rate through late Fall and Winter as well. October – March, the rate was 1-1.13 months. Pretty quick, considering that so many people think it’s tough to sell your home in Winter!? By April-May of this year, the rate had dropped .54 and .38 months respectively. This is an incredibly low Absorption rate, and to me, indicates a long held belief that the best time to list your property is early Spring – assuming the weather isn’t horrible. Such a low absorption rate is likely to mean that there was a very low inventory, and that buyers were eager and active early in the year – and possibly, especially in that area. Indeed, after a long, wet and shaky Winter, people were ready to get out there and shop for new homes!
Fortuna’s Absorption Rate is typically longer than other coastal populated areas. In December, the rate was at 3.23 months, and by June it was down to 2.44 months. There’s several reasons that properties don’t move as fast there, and one big one is that there is just more inventory there. Also, fewer people come to the area looking to buy there. The “Cal Poly Effect” isn’t as profound that far south, and for as close as it actually is to Eureka – lots of people don’t want to do that beautiful commute for work.
SALE-TO-LIST PRICE RATIO
The majority buyers and sellers are most interested in knowing what the prices are doing.
ENTERING LECTURE MODE: I’ll repeat my usual statement, though – if you NEED to sell – do it. And if you’re buying for HOUSING, then – do it. Barring any huge national economic changes/crisis, it’s always a good time, if your life says it’s time. Also, even considering National economic changes, Humboldt County is somewhat slow to be impacted and the effect is usually less intense than elsewhere (for better or worse)… so buying or selling because of life needs and situations is almost always a YES, DO IT.
…okay… I’m off my soapbox.
Let’s just look at the Sale-to-list price values by area. This percentage simply indicates if properties are selling at, above or below the list price. This is still a tricky statistic because of our small market and the occasional unreasonable seller who wants to list tremendously high, OR super desirable house that gets caught in a bidding war – but in general is a pretty safe indicator of where values are at.
I have also broken down the statistics by “Sale-to-List” and “Sale-to-ORIGINAL List” The difference is that the first stat does not factor in any price reductions and the second one does.
I used the following dates because July 2022 was the peak in the last year, and February 2023 was the low point in the market. Note that the low point for Southern Humboldt was 11/2023.
7/2022 – 101.4% 7/2022 – 100.9 %
2/2023 – 95.4% 2/2023 – 91.2%
6/2023 – 99.1% 6/2023 – 96.6%
7/2022 – 102.5% 7/2022 – 104.7%
2/2023 – 96.4% 2/2023 – 93.8%
6/2023 – 99.8% 6/2023 – 97%
*** A note here on the anomaly of the July stats. It’s pretty unusual for the Original List ratio to be higher than the Sale ratio. My best guess is that there were some properties that did not have price reductions that went for way over the Original list price that made that statistic upside down like that.
Sale-to-List: Sale-to-Original List:
7/2022 – 101% 7/2022 – 98.8%
2/2023 – 92.9% 2/2023 – 91.9%
6/2023 – 102% 6/2023 – 101.7%
Sale-to-List: Sale-to-Original List:
7/2022 – 99.1% 7/2022 – 98.3%
2/2023 – 98.8% 2/2023 – 96.8%
6/2023 – 100.9% 6/2023 – 98.6%
Sale-to-List: Sale-to-Original List:
7/2022 – 98.6% 7/2022 – 99.3%
11/2023 – 80.1% 11/2023 – 72.3%
6/2023 – 90.7% 6/2023 – 82.4%
I’m not going to deep dive into those numbers, but I wanted to post these two stats side by side to show you how easy it is to manipulate market stats. For example, I could easily produce marketing that tells people that Properties sold for over asking price in Fortuna in June this year – when in reality, the stats that account for price drops show that they sold for less than the original ask price… Having both stats is important though, because using the same statistic, it would be accurate to say that price drops worked that month in Fortuna, because after sellers dropped their price, the properties actually sold for OVER the price they dropped to… Interesting stuff.
WHAT ARE PRICES DOING?
Yes, I’m finally getting around to it!
How much are homes selling for!?
Here is another statistical dump for New Average List Price, compared to Average Sold Price.
EUREKA RESIDENTIAL SALES
7/2022 List – $467K
Sold – $501K
4/2023 List – $455K
Sold – $416K
5/2023 List – $536K
Sold – $414K
6/2023 List – $471K
Sold – $438K
MCKINLEYVILLE RESIDENTIAL SALES
2/2023 List – $455K
Sold – $454K
3/2023 List – $640K
Sold – $552K
4/2023 List – $691K
Sold – $541K
5/2023 List – $534K
Sold – $453K
I know it may be frustrating that I don’t post detailed stats for each area of Humboldt, but please, if you want those numbers, just reach out- I’m happy to do that research for you.
Also, I wanted to make another example here, because of our relatively small inventory and the wide variety of types and quality of homes for sale – stats can fluctuate widely. Often people want to look at what Average values are in a given area, and try to surmise what their property might be worth, but in reality, one or two “unique” properties or sellers can completely throw off the monthly stats in either direction. It’s important to know that monthly fluctuations in market value may not actually have anything to do with the “market” – it might just be outliers throwing off the numbers…
The solution? Contact a Realtor who knows their stuff to analyze your property and it’s market for you – or better yet, contact a few and get some different opinions to compare!
NOTES FOR BUYERS
If you’re in the lower price points, properties are moving fast! Don’t linger if you think you might want to write an offer on a property you’re interested in. Multiple offer scenarios are still happening, so educate yourselves about how to write good, competitive offers. If you’re in a higher price point, depending on the individual property, we have enough inventory that you may be able to negotiate a lower price. Sellers are still interested in trying out the market to see how much they can get, and aren’t pricing their properties as cheaply as you would think considering the little shake up we had with interest rates last year. Also, towards the end of the Summer and especially Fall seasons, we do see sellers interested in getting their properties sold before Winter.
NOTES FOR SELLERS
It is always a good time to sell in Humboldt County because we always have buyers out there looking. Lots of local people are keeping a “long eye” on the market waiting for their dream property/home/investment to get listed. If you’re interested in timing the market, it’s a little tricky, because of our seasonal variations in weather and climate – but even still, the early Spring market seems to be the best time to get a jump. Historically, I’ve heard people repeat over and over again that Summer is the best time to sell – or even Fall, because the weather here in Fall is so lovely. The truth is, by Fall, folks are settling in to new routines, and many people who know they’re planning on moving try to do it during Summer. Those people are typically looking at properties all Winter long, and are truly ready by Spring. Even still, we don’t see a huge variation in the amount of money people get in Spring or Summer over Winter. The glut of Summer listings typically compensate for the slight increase in values that comes from the glut of competing/active buyers. So, if you need or want to sell, just go for it. With the proper marketing, you can still get a great price for your property.
Of course if you’re thinking – I can keep this property, I don’t “need” to sell, then you can assess the much LARGER and LONGER trends in the market. Regarding HumCO – my only comment on that is that we are just NOT seeing new builds here, and people are moving here… so our inventory is continuing to be tight. If you can comfortably hold on to property here, it’s likely to appreciate well.
FOR MORE INFORMATION
If you enjoyed reading this report, maybe you have more specific questions and want more detailed info? Maybe you’d enjoy a conversation about your sub-area or insight on your real estate situation? We’re always here to chat about real estate, and our services are free until you decide to hire us to buy or sell.
Give us a call or email us for more information or questions!