Napa County California home prices on the rise | North Salem Realtor

Napa County home values are rising. The average price for an area residence reached $438,971 in September, an 11.6 percent increase over a year ago, according to local real estate services.

In September 2011, the average sold price was $393,278, Bay Area Real Estate Information Services reported.

A double-digit gain represents an improvement from the slump years after the housing bubble burst in 2008. From 2007 to 2008, the average sold price of a Napa County home dropped 29.6 percent from a peak of $864,297 to $605,617, then dropped again to $447,915 in 2009, according to Bay Area Real Estate Information Services.

The latest increase in prices is significant, said Randy Gularte, broker/owner of Heritage Sotheby’s International Realty.

“Prices are going up,” Gularte said. “Your best examples are Bel Aire homes,” he said. A year and a half ago they were selling for around $275,000. Now prices are closer to $350,000 to $360,000, he said.

“It’s simple economics,” Gularte said. “We have no supply, we have high demand, and we have no new construction.”

Inventory is down in Napa County, said Cheri Stanley, a Realtor with Frank Howard Allen.

Record low interest rates, a decline in foreclosures and more options for existing homeowners in “distress” add up to fewer homes for sale in the county.  

“There’s nothing out there,” Stanley said. “What is out there is getting multiple offers,” which affects prices.

“If it’s in decent shape, it’s going quick,” Stanley said. “A lot of qualified buyers are trying to take advantage of low interest rates,” but “you have nothing to sell. It’s slim pickings.”

A total of 166 homes were listed for sale in September, compared to 190 in August and 202 a year ago September. The number of closed sales also dropped, from 190 in August to 137 in September. The number of Napa County homes that were lost to foreclosure dropped to 31 in September, from 59 in September 2011.   

Mike Bolen of RE/MAX Gold said he’s seeing more “buy and hold” investors into the market. Such investors will purchase a home and rent it out to a tenant, he said. Because inventory prices are rising, the market for “flippers” has dwindled, he said. “The available product is not there.”

Banks are implementing new programs to help homeowners keep or remain in their homes, which is also impacting inventory, Bolen said.

One type of program, referred to as a mortgage to lease, allows homeowners in distress to remain in their home under a 3-year lease, but the bank takes title to the property. The homeowner avoids foreclosure but no longer owns the home, he said.

Bolen said he’s also seeing multiple offers on properties. “It’s hyper competitive on that lower end of the market,” he said. Bolen recently listed a property on Bellevue Avenue in Westwood for $189,000. He was stunned to receive 20 offers in five days, he said. Five were all-cash offers from investors and 15 were financed offers.

“It was extraordinary,” he said, adding that the property went into contract at $221,000 with an all-cash investor buyer.

Paulo Corro, a Realtor with Heritage Sotheby’s International Realty, said that potential buyers need to do whatever they can to stand out in a multiple-offer situation. He’s seen buyers offer to shorten the time frame for inspections on the home, increase the amount of earnest money placed in escrow accounts, or even waive inspections on a home, essentially buying it “as is.” Others will offer personal stories and photographs to sway a seller’s decision.

“They’re looking to do anything to have (their) offer stand out,” Corro said. “It doesn’t work all the time but every now and then it will work.”

“The first-time home buyer category is extremely brisk,” said Lynda Jensen, manager of the Napa office of Wine Country Group by Better Homes and Gardens Real Estate. With low interest rates, for some buyers, a mortgage payment will be less than rent, she said.

“Yes, the market has improved, but we’re not out of the woods,” Jensen said. More foreclosed properties could come onto the market, she noted. And existing homeowners looking to move may be hamstrung by a lack of equity in their current home. “They don’t have money to buy up,” she said.

Independent Realtor Gerry Bosch said he’s seen a 10 to 12 percent increase in asking price in single-family residences and condos.

“Most of this is being pushed by investors, first-time home buyers and those getting back into the market,” he said.

For homes priced at $250,000 to $400,000, “it’s a hot market,” he said. However, “the middle market between $700,000 to $1.5 million is sluggish. I think people are re-evaluating whether they want to buy that much home anymore because of the state of the economy.”

At the same time, some buyers remain unaffected by market conditions. “The very, very high-end market is very strong,” Bosch said. “Billionaires have plenty of money. They are getting big discounts in multimillion-dollar homes,” he said.

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