Last spring, the market for single-family homes in Davis got busy. There were a limited number of homes on the market, but those that were for sale tended to sell at a brisk pace (often with multiple offers), and at higher prices than were seen in spring of 2012.
The pace of home sales slowed a bit as spring blossomed into summer, and summer faded into fall. But prices have continued to rise, reaching an average price of $300 per square foot during September, a threshold that the local market hadn’t seen in several years.
Year-to-date figures for Davis showed 402 homes sold between Jan. 1 and Sept. 30, with an average price of $509,461 and an average of 32 days on the market — a very low figure. In comparison, during the first nine months of 2012, there were 397 homes sold, with an average price of $446,382 and an average of 60 days on the market.
The September 2013 numbers featured 29 homes sold, with an average price of $571,514 and just 26 days on the market. This compares to 41 homes sold in September 2012, with a $452,444 average price and 66 days on the market.
Dave Taormino, co-owner of Coldwell Banker-Doug Arnold Real Estate, said the local market was in “a short-lived buying frenzy (this past spring) … the low inventory (of homes for sale) in the Bay Area and Southern California kick-started multiple offers and fear in buyers of having to buy right now before prices escalated.”
But Taormino said that frenzy didn’t last very long. He thinks Davis is heading into more of a “normal” market in terms of gradually rising home prices and steady, but not spectacular, purchasing activity.
“I expect next year to be a typical one, with modest appreciation (in home values) as interest rates will likely rise in the spring,” he said.
With the average home price in Davis clocking in at upwards of $500,000 once again, and the average price per square foot for single-family homes topping $300 for the first time in several years, that realization may trigger action by UC Davis to build more homes on campus for faculty and staff.
UCD began construction of the West Village neighborhood in 2011, with the intention of building new apartments for several thousand students, plus several hundred homes for faculty and staff. The apartment component of West Village — consisting of student-oriented complexes known as The Ramble and Solstice, plus a complex called Viridian that is intended to serve faculty, staff and graduate students — was completed this fall.
But the single-family home component has been on hold, at least until now. University administrators recently indicated that the university would like to proceed with construction of several model homes in West Village, which could open for public viewing as early as next spring. But no formal announcement has been made, since discussions between UCD and other members of West Village Community Partners, a public/private entity, are ongoing.
Meanwhile, Regis Homes has graded the final lots in the Verona neighborhood, near the corner of East Fifth Street and Alhambra Boulevard in Mace Ranch.
“We started the project in 2010 — originally we were going to build 83 homes,” said Bill Heartman, project manager. “We got 10 more lots approved in June. Foundations for the remaining Verona homes will likely be poured by the end of the year.”
Three-bedroom market-rate homes in Verona, measuring 1,751 to 2,033 square feet, are selling for $529,990 to $619,990. There are also smaller two-bedroom, 935-square-foot units, built as part of the city’s affordable housing program, priced at $251,578.
As of Sunday, seven market-rate and two affordable homes were still available in Verona. Then, Regis will sell the two model homes at market rate and the project will be finished.
Asked if he’d like to start building another new home project in Davis once the Verona homes are sold, Heartman said, “If I could find (the right piece of property), I’d build it. (But) Davis doesn’t have a lot of available land to build houses on.”
Meantime, the Davis City Council will discuss The Cannery project, which proposes 547 dwelling units on 100 acres at Covell Boulevard and J Street in North Davis, on Nov. 12 and 19, with a decision expected on the 19th. If it is approved, it would be several years before any new homes at The Cannery would be finished and ready for sale.
— Reach Jeff Hudson at [email protected] or 530-747-8055. Follow him on Twitter at @JeffHudsonDE