Gonella Realty's Market Update

The law of supply and demand is alive and well in the Merced/ Atwater Real Estate market.  In October, 2010, the inventory of available homes for sale stood at 2.3 months (meaning that if no new homes came on the market, the existing inventory would be sold out within 2.3 months if sales continued at their current pace). The inventory 2 years ago in 2008 was a 5.9 months which is a decrease of 61%.

The lack of available inventory is continuing to increase prices.  The median sales price increased from $105,000 in October 2009 to $113,000 in October 2010.  This is an increase of 8% over one year.  Interestingly, the median list price was $122,950 in October of 2009 and $125,000 in October 2010.  This is just a slight increase of approximately 1%.  What does this mean for buyers and sellers?  This represents an incredible buying opportunity for buyers because, although present inventory remains limited, prices are down 60% from the peak in 2005 and interest rates remain at historic lows, thereby increasing affordability for our local community.  In fact, over 90% of our local buyers can now afford to buy the median priced home, whereas in 2005 only about 11% of our local buyers were able to afford to buy the median priced home.

In October 2010, 205 properties were listed in the multiple listing service.  During the same period of time, 195 properties were placed in escrow.  New inventory is selling almost as quickly as it is listed.  This real estate phenomenon has resulted in the inventory continuing to remain tight.  This is a wonderful opportunity for sellers to sell their homes quickly and profitably as, in many cases, sellers are selling their homes for even more than their asking price.