The West Side real estate market is sizzling, with buyers competing for the few properties being listed for sale in Newman and Gustine.
In a seller’s market reminiscent in some ways of the housing frenzy of 2006, local real estate professionals say, values are appreciating, homes are often drawing multiple offers as buyers compete and properties are often snapped up in a matter of days – sometimes at above asking price.
“If the condition (of the home) matches the price, you are going to see multiple offers and most likely be under contract in five to seven days,” explained Jared Amaral with Stephens & Borrelli.
“It’s crazy,” JoAnna Lafler of Lafler Real Estate said of the market. “Usually within four to five days you are seeing multiple offers.”
The real estate professionals said an exceptionally limited inventory is one key factor driving the market.
“There is very little out there. It has been that way for the last four to five months,” commented Bill Mattos, broker at Valley Real Estate. “Our prices have gone up drastically. It is a seller’s market right now.”
A recent check of the MLS real estate listings, Amaral said, showed just two single family homes actively on the market in Newman and two more in Gustine. That was at the beginning of April.
To put that into perspective, he explained, the available inventory was, as of that date, down 63 percent in Newman and 85 percent in Gustine from a year earlier.
Prices have escalated sharply, with homes priced below $300,000 becoming fewer and farther between.
Homes in the upper $200,000 price range can still be found, Mattos explained, but they will tend to be smaller, older properties.
“We still have some homes in the $260s and some $320s,” he said. “The mid-range would be about $300,000.”
Buyers are not dissuaded by homes in the mid-$300,000s, a price range at which buyers may have balked in recent years, Amaral and Lafler remarked.
“Around $350,000 is kind of a sweet spot” in the market, Lafler commented.
The median asking price of a single family home in Newman is $353,000, Amaral said.
With properties in short supply, it is not uncommon for buyers to come in above asking price.
“We are seeing over asking (offers),” Amaral explained. “It can be hit and miss. Recently I have seen properties go for $5,000, $10,000, $15,000 above asking. That may not be the case for every property.”
Extremely low interest rates are helping offset the higher asking prices, each of the real estate professionals agreed.
“This kind of a boom is fueled by historically low interest rates,” Lafler commented. “If it starts being raised substantially you may still have people who are looking but a person who could have qualified for $400,000 (at lower rates) might drop down to $350,000. That will depress prices.”
In recent years, though, prices have only appreciated.
Nationwide, Amaral said, housing prices escalated by 30 percent over the five years prior to the pandemic. In the past year alone, he told Mattos Newspapers, square footage prices paid for Newman properties climbed by 24 percent.
As a result, homeowners have seen their equity increase sharply.
“When I go to value a property, people are shocked at how much it has gone up,” Lafler remarked.
But the challenge, Amaral said, is that lack of available inventory and affordability issues may discourage those who in a more traditional market may be looking to parlay that equity into a new home.
“You have a lot of homeowners with a lot of equity in their home. But with no inventory and the affordability factor they are not able to make that move, so they just stay put,” Amaral commented.
“If somebody is selling to buy (another property) they will be up against a bunch of buyers on a new home,” Lafler agreed.
Mattos said many of his listing clients are not necessarily looking to move up or to down-size, but are investors cashing in on the high prices or sellers looking to move out of state.
Homes for sale are not the only scarce commodity in the local real estate scene, the trio noted, as rentals are also in extremely short supply.
Lafler said she attributes a recent uptick in activity with the arrival of spring, traditionally a peak season for real estate, and believes that the roll-out of the COVID-19 vaccines has boosted confidence among buyers.
But the fact remains, she remarked, that throughout the pandemic the real estate market has not only remained solid but is sizzling – at least from the perspective of sellers.
“I would have thought that the pandemic would be devastating,” Lafler reflected.”I never would have guessed that in a pandemic this would have happened.”