TO SUBSCRIBE TO THIS NEWSLETTER, CLICK HERE AND ENTER YOUR EMAIL. YOU’LL GET HUMBOLDT COUNTY REAL ESTATE MARKET REPORTS 4 TIMES A YEAR, SEASONALLY, AND THAT’S IT!
First some basic stats…
Sale to List Price Ratio
This percentage represents how close a property got to it’s asking price. It is normal to see it fluctuate somewhat seasonally, and in smaller parts of our market it isn’t too reliable of an indicator because of outlier properties that can skew the stats.
For all Residential Properties Sold in Humboldt County
- Peaked in June 2023 96.7%
- August 2023 96.3%
- Low point December 2023 91.8%
- Noticeable Spring Market Surge through February
- March 2024 94.7%
- April 2024 dropped again 93.9%
For Residential Sold in Eureka
Eureka’s stats show that property values have risen sharply by almost 5% since December and unlike the county wide stats didn’t drop as much in April.
For all Residential Properties Sold in Eureka:
- Peaked in September 2023 at 99.3%
- Volatile through winter…
- December 2023 91.9%
- January 2024 94.1%
- February 2024 91.4%
- March 2024 96.9%
- April 2024 96.2%
Why did sale-to-list prices drop?
It could be because properties were listed too high. But looking at overall buyer performance is another indicator.
Interest Rates
I like looking at this site, which has stats up to April 25,2023 at the time of this writing. This site indicates that rates are at 7.17%:
https://fred.stlouisfed.org/series/MORTGAGE30US
But Google quotes a different picture, saying that as of 5/1/24 a 30 year fixed rate mortgage nationally is at 7.9%.
Rates had started to come down a little to 6.6% according to stlouisfed.org, and that had the effect of inspiring confidence in the market and giving buyers a little breathing room in the process, but seeing them go up again has been disheartening for buyers whom find that a small change in interest rate makes a big difference in what home they can afford, or IF they can afford a home at all.
Then there’s the insurance situation – which you can read a bit more about in the Winter Market Report from a few months ago.
Basically, buyers are a bit weary, but still buying!
ACTIVE LIST VOLUME
The Active List Volume (for Residential Properties in all of Humboldt County) is fairly steady, showing a normal, seasonal fluctuation in total listing volume. Right now we are at $218.7M and last year’s peak volume was in July at $250.6M. The low point for the year was actually in March of last year at $197.2M. These stats basically indicate that the total number of residential properties on the market hasn’t changed meaningfully from what we would expect.
NUMBER OF RESIDENTIAL UNITS
For all of Humboldt County, there are a total of 431 Residential Units for sale. In Coastal Humboldt, from Fortuna to Mckinleyville, there are 192. This includes fixers and non-financeable properties as well. Removing those, offers 178 units for sale, and if you’ve been reading these reports for a while, you may remember that some months back we were at a dramatically low inventory. Low inventory tends to drive the price up and higher inventory tends the other way. When you combine higher inventory with fluctuating and rising interest rates, you get market volatility and buyers who aren’t sure now is the right time to get into the market. This is especially true for people in the lower price points who can’t afford the increasing interest. Even a small shift in rates could make a massive difference in how much house they can afford.
This is a good time just to remind everyone that if you’re planning on getting a home loan, DO shop around for your lender as rates and financing costs can vary quite a bit.
ABSORPTION RATE
This statistic indicates how long a property takes to sell. It can fluctuate for a wide-ranging number of reasons. In county-wide statistics, we see that the rate has dropped slightly through winter, possibly because there were less units/less competition on the market, which is also typical. So, nothing too exciting to see here. What we’ll be looking for through Summer, to indicate a robust market, would be that the number of units continues to rise and that the absorption rate also goes down, meaning more properties are getting put on the market, AND that they are selling relatively well. Right now, county-wide, it’s taking about 5 months to sell a Residential property. This SHOULD be a comforting statistic to any sellers out there right now who may feel like they are sitting around and waiting for an offer. You’re not alone. Buyers are being more savvy and more picky right now.
ARE PRICES GOING DOWN?
Well, in one sense they’re going up – if you’re a buyer, the price of the home is one factor, but the price of buying that home has risen precipitously.
As far as the solo statistic of what prices are doing in general, county-wide, prices are currently near the low point for the last 12 months. February was the lowest.
We are seeing price drops regularly right now. On the hot sheet yesterday there were 22 new listings, and 26 new price drops.
It also appears that Mckinleyville prices are significantly down overall currently at $400K, down from $507K in January. (Also, Mckinleyville stats can be seriously skewed by the sale of one or two 1M+ properties. For example, in December the Median price peaked at $675K, representing the highest median value for Mckinleyville in the last year. That was an outlier. Through last year’s Summer Market, the median Values for Mckinleyville were hovering around the high $400K – low $500K. SO, this statistic might seem very concerning, but might actually only be representing a mild dip in prices.
However, depending on the area the property is in, prices are not going down. Here are the stats for median sold prices.
- Eureka – $407K, up from $355K in January.
- Fortuna – $361K, down from $418K last month, but up overall from $300K in December.
- Southern Humboldt – $417K, down from $525K last month, but also up overall from $320K in January.
Putting it all together, the Real Estate Market is a bit unpredictable right now. If you’re extremely risk averse, you may want to avoid buying or selling at all right now. There really isn’t any indicator that things won’t continue this way. As long as the interest rates continue to shift the way they are, people will be reacting, and there will be a ripple throughout the way the market responds.
In the meantime, if you have a solid Realtor assisting you, or if you have a good amount of experience navigating average highs and lows in the market, there are still deals to be found for buyers, and sellers can still get a good price for their home/property, it’s all dependent on the individual factors.
FOR BUYERS
There is no rush – even if rates are going up… Investing in yourself and your future by moving into home ownership is a typically a good move financially, even at these rates. Prices probably will continue to adjust by staying low or going down somewhat locally, and you definitely have lots more room to negotiate for what you want. Since properties are sitting on the market a bit longer right now, some sellers are getting antsy and we’re seeing lots of price drops which may work in your favor. You also have the ability to be critical of what you are buying, and being sure you’re getting a home and property that really work for you – less compromises!
FOR SELLERS
As the rates and overall market performance are a little rocky at the moment, I predict that this is a bit like a turbulent take-off. I believe the Summer market will get rolling. You may find that if your property/home needs a lot of work, or will require significant investment in the near future (renovation & repair) that you might not be able to fetch top dollar for it like we’ve seen in the not-too-distant pass. The way the market favored sellers during covid is no longer the way the things are playing out at the moment. Property values have not dropped dramatically, so selling now is still reaping the rewards from those boom years, but you may find that you have more competition, that you have to be more willing to negotiate, and also that there are ways to be extra savvy as a seller to protect yourself from a difficult selling process. Putting a property on the market, especially if you’re living it in, makes you a bit vulnerable to the process, and that’s a stressor, any way you look at it.
FOR INVESTORS
Are rents keeping in pace with values? It seems that the single-family home has been a bit priced out for the time being. Interest rates are even higher for investment loans, and if you’re leveraging your resources, looking toward multi-family units is likely to be the trend. Humboldt has very few multi-family properties that come on the market, and when they do, they can be a mixed bag. As far as building goes, in general, it appears to be generally too expensive at this point, although investing in certain kinds of flips could still be viable. Parts of our area are opening up zoning to allow for some commercial properties to be partially converted into residential areas, which could make for an interesting investment focus.
To discuss any part of this market report, please feel free to reach out to me and connect. If you have specific valuation/market stats questions about your area or your specific property, I am happy to give you a personal assessment.
Leave a Reply