2021 was an amazing year for real estate nationally, at the state level, and locally as well. No one could have predicted the intricate and interesting ways that the pandemic shaped the way people live, work, and move. For the Spring Market Report coming in April, I’m planning on doing a full summary of how these factors played out in Humboldt County, specifically, but for now, let’s just say the market is still trending up.
WHAT IS BUYER FATIGUE?
It’s nice to refer to it that way when you’re thinking about investments. Yes, I want my money to grow! It’s much more challenging, though, when you’re standing in my shoes. From my perspective, real estate represents more than investments – it’s also housing, and housing is for people. I work with some of those people, and for most of them, the market trending upward could just as easily be characterized as being competitive, tight and stressful.
Lots of buyers are getting tired of this market. People feel like they are paying too much, and making too many compromises in the process. Some buyers are flexible enough that they keep finding houses they like, keep writing reasonable, or even GOOD offers, and they’re being rejected over and over again. This can be extremely disheartening. So, the fatigue is real and some buyers are backing out and deciding not to buy because of this.
ARE PRICES LEVELING OUT?
Another phenomena that is interesting to note is that our prices, while continuing to rise, are not rising as dramatically as they have for the last 18 months or so. This is good, because it can’t go up that fast forever, and a little stability in pricing helps everyone out. As sellers more readily list their properties for higher asking prices at the outset, (because comps are available to support doing so) the pool of buyers might be a little shaky about how to respond. Buyers have been at this so long now that it’s hard to gauge how competitive they should expect to be (this is where a good Realtor helps…) and that just adds to the stress of the process.
SHOULD I SELL NOW?
For people who are selling, the drawbacks are fairly nil. Transacting in Real Estate always has some level of stress associated with it, and for many people can be a major life event. It’s very common for sellers to also be moving, and this makes the process longer and potentially more arduous. But the proverbial pot of gold is to be had at the end – almost everyone selling is walking away with a good return on their investment.
So, it’s a great time to sell. That might be obvious, but a lot of people do hold back on listing their property, and for so many different reasons. Those reasons often all boil down to money – or return on their investment. This is fine, but I do always like to suggest that if your life situation is dictating a sale of a home or property, you need not worry too much about the timing. One thing that Humboldt County has going for it, is that the market here is only forecasted to keep going up.
SHOULD I BUY IN HUMBOLDT, THOUGH?
I’ll probably write a separate blog post about this so that I can just link it in the future, but the with the poly technic coming to HSU, we’re in for a wild ride, for at least the next few years, and likely, the next decade. That one cultural shift in our coastal Humboldt reality will take years to ripple out fully into the community. HSU says it will double the student population in the next 5 years, and that statistic compared to the fact that there is very little housing development happening locally could be a perfect storm. We’ll have to ride it out and see – but at a minimum, it appears for the time being that your investments are safe.
WHAT ABOUT THE NATIONAL MARKET?
I do like to occasionally touch on what’s happening nationally, because everything from politics to interest rates affect the market.
According to the National Association of Realtors, the housing market in 2021 was the strongest in 15 years. Humboldt isn’t alone in seeing a sharp rise in housing prices, as nationally they have increased year-over-year for 116 consecutive months. Does this mean we’re in a bubble? Lots of people think so. The inflation rate in January of 2021 was 1.4 and as of November 2021 had hit 6.8. Indeed, property prices are definitely inflating. That kind of economic intensity will probably eventually cause the market to slow somewhat.
Of course, looking at real estate markets with the bubble-to-bursting lens doesn’t really make space for the way the market can be more fluid. It can go down without “bursting” – and I believe that for Humboldt, at least, if there is a drop, it will be gentle.
Many people predicted that the end of the forbearance program would cause a glut of foreclosures that would lead to a drop in housing prices. I indicated 3 months ago that it didn’t seem likely, and that has panned out, as the national, and local markets have not had this happen. So, people can stop waiting to buy for that reason, at least.
I HEARD THERE’S “NOTHING” FOR SALE RIGHT NOW…
Switching gears somewhat, here are our local market inventory stats for residential properties:
There are 195 residential properties on the market. Most people are looking to buy somewhere between Trinidad and Rio Dell. Otherwise known as “Coastal Humboldt County”. When I refine the search to include only these properties, that reduces the available number of residential properties to 78! So, interestingly, the majority of homes for sale in Humboldt County are in rural, inland areas.
If I take fixers off the list, we’re down to 69 properties left. Would you believe that 17 of those 69 are listed for over a million dollars? The average Humboldt home buyer isn’t able to spend that much, so now the number of available properties is 52, which isn’t a lot.
If you can do your part by listing a property for sale, please do! 🙂
To close, I’ll just summarize here that we have a robust, stable market in Humboldt, with a low inventory of properties for sale. Buyers are still out there, interest rates are low, and Sellers are have an easy time getting extra money for their investments. HumCo’s growth is slated to continue, and buying here, even at this higher price point, is likely still a good idea.
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I love to talk Real Estate, so you’re welcomed to call, text or email anytime!
If you enjoyed the photos in this market report, check out Martin Swett’s Flickr page and take note that he also is a local loan officer!
