Davis is a university town, and home sales in Davis tend to be driven by the academic calendar, with the busiest months in late spring and summer.
This year is no exception — some 72 Davis homes were sold in June, including 57 single-family homes, according to Cory Gold, vice president of Coldwell Banker-Doug Arnold Real Estate. It was, Gold said, “the busiest June in several years.”
Gold said the median price for Davis homes in June was $551,272 for all homes (including duplexes and other multi-unit dwellings), and $595,000 for single-family homes. He calculated the price paid per square foot during June at $318 for all Davis homes and $320 for single-family homes only.
The price per square foot for Davis homes has been running above $300 pretty consistently during all of 2014.
“This is the first time I can recall in Davis where the listing average price, the sold average price and the pending average sales price have all been over $300 (per square foot),” Gold said.
What’s more, prospective buyers had more alternatives to choose from during most of June, as compared with recent months.
“As of last week, we had 99 listings in Davis, and we had more than 100 homes for sale for a couple of weeks recently,” Gold said. “If you compare this year against the same time last year, in Davis we had maybe 75 listings in 2013.”
Measuring the first six months of 2014 against the same period in 2013, home prices in Davis rose by double digits. The median price in Davis was $448,000 during the first six months of 2013, and that comparable figure for 2014 was $522,500, an increase of just over 16 percent.
During the first six months of 2014, 38 properties sold for under $300,000 (mostly multi-unit dwellings); 114 properties sold for between $300,000 and $499,999; 70 properties sold for between $500,000 and $749,999; 28 properties sold for between $750,000 and $999,999; and four properties sold for more than $1 million.
(The June figures included a six-bedroom, six-bath home with 3,627 square feet that sold for $1.45 million.)
The growing number of larger and more expensive homes sold probably contributed to the rise in the price paid per square foot during the first six months of 2014. Overall, 248 Davis homes sold during the first six months of 2014, versus 256 during the same period in 2013 — just a 3.1 percent difference.
In addition to the traditional spring/summer surge in Davis home sales, the rising home prices likely added to the pace of sales, as prospective sellers — who in some cases waited to put their homes on the market due to lower prices in recent years — are now listing their properties for sale.
However, there are other homeowners who locked in low mortgage interest rates, which dropped into the 3 percent and high 2 percent range in recent years. Some of these homeowners are opting to stay put rather than buy up, according to Gold. “They might be choosing to remodel instead of buy a bigger house,” he explained.
Other homeowners are biding their time, knowing that new homes soon will be built at The Cannery, where site preparation has been underway all summer. Upwards of 500 new homes, in a range of sizes, will be part of the new development at Covell Boulevard and J Street over the coming years.
Several homeowners interviewed for this article indicated that now that their children have grown up and moved out, they will be tempted to downsize into a new home at The Cannery in a year or two. But none are ready to put their current home on the market just yet.
Sales of existing homes in Woodland are moving at a somewhat slower pace than last year — 267 homes sold during the first six months of 2014, compared to 295 sold during the same time period in 2013, a reduction of just under 10 percent.
Woodland prices are higher: The median price was $278,000 for the first six months of 2014, compared to $226,000 in 2013, an increase of about 23 percent. But Woodland prices have remained fairly level during the past nine months, with the average price per square foot hovering at around $165.
All told, when the first six months of 2013 are compared against the first six months of 2014, the median home price in Woodland grew by $52,000 and the median home price in Davis increased $74,000, meaning the price differential between the two communities is gradually widening.
Gold believes the real estate market is entering a comparatively stable phase.
“I do not see a big spike coming,” he said. “We’re going to see 3 to 4 percent annual appreciation … what we would consider ‘back to normal.’ Mortgage interest rates will probably be stable for the next year.
“But when they do start to creep up, it will take away buying power — the difference between a 3.5 percent interest rate and a 4 percent interest rate makes a difference in the monthly payment. And that will slow appreciation (when and if it happens).”
Davis home prices, while high compared to other parts of Yolo County, should be interpreted in a larger context. The median home price for California homes in June was $457,160, as reported by the California Association of Realtors. And while the $300 to $320 per square foot figure in Davis is high compared to most parts of the Sacramento region, it is lower than the price per square foot in many parts of the San Francisco Bay Area.
In Berkeley, where home sales have been extremely brisk this year, the price per square foot ranges from $387 to $765 depending on the ZIP code. And in Silicon Valley — where the tech industry is booming, and home prices are fueled by high stock values and stratospheric salaries — it is not uncommon to find home buyers paying over $1,000 per square foot for homes in portions of Palo Alto, Atherton, Menlo Park and Los Altos.
— Reach Jeff Hudson at email@example.com or 530-747-8055.