Bishop Real Estate Year in Review 2016
2016 saw home prices rise significantly here in the Eastern Sierra. While 2015 saw a slight increase of 3% in the median price from the preceding year, 2016 rose 17% from the year prior. Year over year, the median home price for the past 12 months increased from $257,000 to $300,000. There were several bright spots throughout the market, total number of homes sold increased by 20% and the total dollar volume of property sold in our market increased 17% from 2015.
National and statewide sales prices of existing single-family homes have been on an incline for the past several years. Locally, the last decade began with home prices peaking in 2006 and then steadily declining through 2011. Over the past 5 years we have seen a stabilization followed by recovery.
Other statistics which I feel are important to consider are interest rates, the number of distressed sales, and the supply of homes on the market. Interest rates, currently about 4.2% for a 30 year loan, have remained historically lower over the past 12 months. This still provides very inexpensive financing and near historical lows. Lower interest rates allow more buyers to purchase as their purchasing power is increased. In addition to lower rates making homes affordable for more first time buyers, those buyers wishing to “move up” may have the ability to qualify for a larger mortgage without increasing their monthly payment.
The number of distressed sales in the Bishop market was down again considerably in 2016 and is gradually returning to pre-recession levels. A distressed sale includes any home which is either a foreclosure or a short sale where the seller is selling the home for less than the debts against the property. The lower number of distressed sales is positive aspect for the real estate market because distressed sales tend to sell for a much lower price than a traditional sale and can bring down prices in an area.
The number of homes currently for sale remains low. At the end of December there were only 51 homes on the market, down from 83 homes available in July of 2016. There is currently a 2.86 month supply of homes priced between $300,000 and $400,000. This means that if no new homes came on the market, the existing inventory would all be sold in just under 3 months. Generally any inventory below 6 months is considered a sellers’ market. Seventy three percent of all sales in 2016 were sold for $400,000 or below. The number of higher end homes sold had a very large gain in 2016. In 2015 there were only 5 properties sold over $600,000, while in 2016 there were 11.
The important factors to keep in mind are while interest rates are low the predications are they will increase, and while home prices have increased over the past year, the reduced inventory could cause them to go even higher.
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Jake Rasmuson is a 1999 graduate of Bishop Union High School, and has a Masters of Science Real Estate degree from the University of San Diego. He is a Broker Associate at Coldwell Banker LeeAnn Rasmuson and Associates.