At the height of the recession some Napans might have wondered if their homes would ever appreciate again. Today, that answer appears to be a resounding yes.
The median price for a Napa County home rose 21.2 percent, from $335,000 in March 2012, to $406,000 this March, according to Bay Area Real Estate Information Services (BAREIS).
While prices were rising, the number of Napa County homes listed for sale in the first quarter of 2013 dropped 36.8 percent when compared to the same quarter a year earlier.
In March, for example, a total of 287 area homes were listed for sale, compared to 454 a year ago. The number of homes sold also dropped, from 114 to 100 in that same time period, said BAREIS.
Demand continues to outstrip supply, experts said.
“The problem is there is nothing on the market,” said Latife Hayson with Sotheby’s International Realty. “The inventory is so low. A lot of the foreclosures have been scooped up.”
For some agents, “It’s hard to make a living on real estate right now because there is no inventory and so many buyers,” she said.
Hayson primarily sells wine country homes in the $1 million price range and above, but notes that “we have huge demand in every price range.” The Realtor said buyers from outside the U.S. have are interested in Napa Valley real estate. Asian, Persian and Indian buyers have approached her about buying property here, she said.
Demand is even picking up at the uber-luxury price ranges, Hayson said. “We’re starting to see more people looking in the $20 million range. We don’t normally see that. Real estate is booming like it’s never been before.”
Mike Bolen of RE/MAX Gold Napa Valley said low inventory and rising prices are partially due to fewer distressed properties for sale. In addition, “The average homeowner has not realized prices have rebounded. As people start to see neighbors homes selling for more money than a year ago, we will start to see inventory come back up as people realize that now they can sell.”
Move-up buyers are starting to emerge again, he said. “We haven’t seen that in a long time. People don’t want to miss the opportunity to move up to another home,” like before the market crashed during the recession.
Bolen estimated there are three times as many buyers looking for homes than this time last year. Clients put out as many as five offers before they get something accepted,” he said.
He’s seeing rapidly increasing prices in downtown Napa. “We are seeing multiple offers (for) everything under the $500,000 range,” said Bolen. “On virtually every home we are competing with multiple buyers again to the likes we haven’t seen since 2005 and 2006.”
“The good news is in the past four to six weeks a great deal of new inventory has come on the market,” said Heidi Rickerd-Rizzo with Terra Firma Global Partners. “In the beginning of the year, we might have had four to six open houses,” on the weekly Realtor open house caravan. Last week there were 24, she said.
Rickerd-Rizzo said buyers today can take advantage of low interest rates. While underwriting standards remain strict, lenders are starting to come out with new conventional loan products “giving buyers additional opportunities.”
Appraiser Bruce Bradley of Bradley & Associates said low inventory can negatively impact higher home sale prices.
“What happens is we don’t have enough higher-priced data out there to report to lenders that would justify the higher contract prices,” Bradley said. Remaining bank-owned properties also negatively impact appraisal values, he said.
The appraiser noted an increase in circumstances where a buyer will offer to pay the difference if an appraisal doesn’t match the home’s contract sale price.
Last year, he didn’t see those type of offers, Bradley said. “This year, we’re seeing people doing that.”
The real estate affiliation of Heidi Rickerd Rizzo has been corrected since first posting.