Eagle Rock just had an incredible year in real estate. Let me tell you about it.
If I’m being honest, I didn’t think we’d see another crazy year like we did in 2014. If you remember, real estate was so hot that Redfin named Eagle Rock the #2 most popular neighborhood in the country.
Quick 2015 Back Story
Home sales in 2015 did not disappoint. There was a healthy increase in sales prices of 9%.
However, Sellers tried to push the envelope and drive prices higher, which resulted in a mild cooling-off in the summer of 2015 which I called the “NELA Opportunity Window” (NOW!) to explain when buyers should pull the trigger.
For those who listened, they picked up their homes for a lower-than-average-price, and saw their home appreciate dramatically the following year… And I mean dramatic!
Now for 2016
In 2016, homes appreciated 12% from January to December. Whether you’re looking at the average or median sales price, that’s about $90,000 increase in value.
$90,000 of equity in just 12 months.
Before you start kicking yourself, let me say this… The market is still on fire, and getting hotter.
Homes are Selling Fast
In 2014, homes took about 29 days to sell. In 2016, they took 23.
For the past three years, 3 out of every 4 homes listed for sale, opens escrow, and actually closes. We call this the “absorption rate”. That figure hasn’t changed. Also, the number of price reductions has actually decreased.
In 2014, there were 12 sales over $1 million. In 2015, there were 18. Last year, that number doubled: 35 sales over $1 million.
Predictions for 2017
If I had to guess, I would say we are in for a repeat of 2015 this year. We will see the market get a little saturated with new listings which will plateau prices just like we saw last year.
These phenomena are cyclical and like to repeat themselves. It has to do with supply and demand.
We may not see another 12% of increase in home values, but for buyers in 2017, that will be the last thing they need while they’re trying to get their own little piece of heaven for themselves.
While it is still very much a Seller’s Market, homeowners will see more competition with other sellers this year, and they will need thoughtful real estate agents who know how to draw a crowd. Ask me how.