An already low inventory and a strong demand for housing – including from those displaced by the October fires — continue to drive home sales in Napa Valley.
Napa County home prices reached a 10-year high in 2017, according to a new report compiled by Bay Area Real Estate Information Services, Inc.
The median price for a county home rose 7.7 percent – from $580,000 to $625,000 – in 2017, said BAREIS.
The median price means half of the homes sold were above $625,000 and half were below.
The last time the median topped $600,000 was in 2007 when it reached $630,000.
It took almost the same amount of time to sell a house in 2017 compared to 2016, said the report. The average number of “days on market” was 80 in 2017 and 79 in 2016.
A total of 1,461 homes were sold in 2017, compared to 1,566 in 2016.
“Demand is still very, very strong” for Napa County homes, said Stefan Jezycki, board member of the North Bay Association of Realtors (NorBAR).
However, because of rising interest rates, tax reform and the lack of property tax portability, “We expect units sold to stay about the same or decrease” in 2018, Jezycki said.
By property tax portability, Jezycki means that some buyers are afraid to move because they don’t want to lose their base-year value property tax assessments. Under Proposition 60 sellers over age 55 can transfer the base-year value of their existing home to another house within the same county, but this doesn’t benefit all sellers.
And with prices remaining at 10-year highs, “It’s going to be very, very difficult for first-time homebuyers to break into this market,” said Jezycki of Pacific Union International.
Desi Capaz, chair of the Napa chapter of NorBAR, said 2017 was a good year for Napa County real estate, but not quite as strong as 2016 because of the lack of inventory.
Buyers continue to face the same problem this year, he said.
“There is not enough for buyers to purchase out there,” said Capaz, who is with Heritage Sotheby’s International Realty. “So sellers have the advantage over buyers.”
However, with increases in interest rates and a shortage of inventory, some sellers “are going to be reluctant to put their houses on the market,” he said.
With some new home developments underway, such as townhouses at the old Napa Valley Register property on Third Street, “hopefully we’ll slowly get some more inventory to relieve this problem,” said Capaz.
The October wildfires impacted the real estate market, said Jezycki.
“I think it had a slight effect on values,” he said, “more of a bump.” After the fires, “All of a sudden we had a wave of buyers” looking to buy.
“It did help cycle out some of that dated [or] ‘stale’ inventory,” he said.
At the same time, of those who lost their homes in Napa County, some had the financial wherewithal to wait to buy a new home instead of competing in a low inventory market. Those potential buyers may wait months or even longer before they get back into the real estate market, said Capaz.