Following three straight months of growth, western Nevada County’s real estate market saw fewer home sales last month, but the slight shift also fell short of a June gloom.
Despite a 2.8% monthly decrease in homes sold, the local market closed out the first half of 2024 ahead of pace with the prior year — the slowest sales year in any of the past five, according to Multiple Listing Service data.
But whether June sales data amounts to a mere speed bump or actually buyers — shouldering higher prices, interest rates and fire insurance — pumping the brakes remains to be seen.
Third-quarter sales will be telling. A single month doesn’t establish a trend, but July should start to show which direction the second half of 2024 is headed. Meanwhile, more sellers are listing their homes and price reductions are more prominent, as properties with longer stays on the market seek to remain relevant to buyers.
One year ago, the month of June saw 124 homes sell, which marked a 34.7% increase over the prior month’s 92 closed transactions — and 22.7% more than last month’s 101, the fewest sales for the month of the June in any of the past five years.
Through six months of 2024, western Nevada County has recorded 517 homes sold, which amounts to nine more (1.8%) than the first half of 2023. But that performance falls well short in comparison with each of the previous three years, and even the pre-pandemic market of 2019, which saw 686 homes close escrow in the first six months.
Pending sales were up 2.9% in June, with 141 transactions in escrow, which is 2.2% more than the same month in 2023.
PRICE POINTS
The median price of a western Nevada County home sold in June was $575,000. That’s 5.0% percent higher than the May median price and 2.6% higher than the $560,500 recorded in June 2023.
Although the pace of sales remained the same as May, as the median days on market before receiving an accepted offer was 15 days, inventory continued to build in June.
Thanks to the white-hot sales frenzy of 2020-2022 with inventory struggling to keep up with the pace of sales — western Nevada County listings have lagged far behind the norm for the local market.
The most homes to hit the market in the month of June in any of the past five years was in 2022, when there were 459 homes listed. Prior to the pandemic, in June 2019, there were 611 homes for sale locally.
But for the second consecutive month, active listings stood above 400 units for sale with 428 active listings. As inventory has grown, however, so has the number of price reductions for homes making a longer stay on the market.
In fact, recent weeks have resulted in more price reductions than new listings, as was the case in the first week of June, when there were 42 new listings and 64 recorded price reductions.
In the seven days preceding Thursday, July 5, there were 40 new homes on the market and 35 price reductions on those already listed.
WAITING ON RATES?
One factor continuing to keep inventory low is the low interest rates many homeowners secured during the sales frenzy, either by actually purchasing a home during that period or refinancing for a lower rate.
According to Freddie Mac, rates on a 30-year fixed-rate mortgage stood at 6.86% at the end of June, which was down from the 7.03% recorded at the end of May and up from 6.71% at the end of June 2023.
Historically speaking, current interest rates are lower than what homeowners could expect from the early 1970s through the early 2000s. But current rates are considerably higher than what lenders were offering over the past two decades, particularly the record-low rates secured by many during the pandemic.
The impact interest rates have on home sales is considerable, and easy to see when the monthly sales data over the past five years is presented alongside mortgage interest rates offered at the point of sale. As rates began to rise significantly in first quarter of 2022, sales quickly cooled in the following months and set the stage for 2023, the slowest sales year among the past five.
If 2024 is going to beat the 2023 sales volume, third-quarter sales will be key.
In 2019, there were 404 homes sold between July-September locally. That number swelled to 595 homes sold 0ver the same three-month stretch in 2020. There were 479 homes sold in the third quarter of 2021 and another 414 sold in the third quarter of 2022.
One year ago, that number dropped to 335 units sold in the third quarter, a 19% decrease in sales from prior year.
Where that number stands at the end of September, closing out the third quarter, will likely make or break 2024.
- BY THE NUMBERS
- June home sales in western Nevada County:
- $575,000 — Median price (2024)
- $560,500 — Median price (2023)
- 15 – Days on market (2024
- 14 – Days on market (2023)
- 101 – Homes sold (2024)
- 124 – Homes sold (2023)
- 428– Homes for sale (2024)
- 360 – Homes for sale (2023
Brian Hamilton is a Realtor (DRE #02149112) for the Betsy Hamilton Real Estate Team at RE/MAX Gold (DRE #01949144) in Grass Valley. Email him at Br***@Be***********.com or visit www.BetsyHamilton.com for more information.
