Waiting for the Humboldt housing market to crash before making your real estate investment? Good. Keep waiting … and waiting. It’s going to be a while.
But Annalise, you might say, January was so slow and median sale prices were down over 7% from last year. Certainly, this is the end of the bull run.
I can confirm that this January was phenomenally slow. The number of residential units sold in Humboldt County was the lowest for any single given month in 30 years, just 52 homes according to Multiple Listing Services, a nationwide source of real estate listings. Arcata, in fact, didn’t have a single sale.
Was this purely a lack of inventory? No. Inventory remains tight but the supply of homes for sale was up over 90% in the month of January compared with last year.
Well, then, demand must have fallen.
Of those 52 homes that sold in January, most were initiated in December. Anything significant happen in Humboldt this last December? The Dec. 20 earthquake surely rattled the confidence of some would-be buyers and sellers, delayed processes up and down the line of escrow services, and was generally a distraction from everyday business. Pair that with seasonal lows, a temperamental interest rate environment on top of coming off of two straight record-setting years and that leaves us in a slump. But a crash? I don’t think so.
The February rebound from January is palpable. I’m experiencing a bit of flashbacks to summer 2020. Buyers are coming on strong. Even homes that need significant upgrades are tempting previously patient investors.
In fact, as of the writing of this article, median sale prices are up 5% from last February and the number of homes going under contract in the last week is about double that of the previous two weeks.
Whenever anyone references national trends, I have to remind them that real estate is extremely localized. Our already lacking inventory is being squeezed by growing enrollment at Cal Poly (with no current plan to add additional student housing until 2025), an increasing number of climate refugees fleeing fire-prone counties, and the successful marketing of Humboldt as a low-key nature lover’s paradise. Also, there are still several significant pending projects coming to our little slice of prime coastline that will further impact the housing shortage for years to come. And frankly, getting anything new built in Humboldt is challenging for many infuriating reasons.
The frenzy of the past two years might have cooled but the laws of supply and demand have this real estate broker believing we are moving into a market of meager to modest growth.
But if your plan is to wait for the crash, by all means, wait. My buyers and I will appreciate it.
Check with your local real estate expert about your unique situation, investment options and timeline.
Annalise von Borstel’s mission is to partner with her clients to understand and achieve their real estate and financial goals while strengthening and generating economic growth for the community of Humboldt. Agent Annalise is president of Rotary Club of Eureka, a board member of Compass Community Credit Union, and an active member of the Humboldt Association of Realtors. She can be reached at annalise@mingtree.com, 707-616-2548, or www.agentannalise.com DRE #02020546
