Home prices continue to climb because of demand in Merced, Los Banos

Limited supply and growing demand led home prices in Merced County to jump 6.6 percent in December, outpacing the state average, according to housing data tracker CoreLogic.

Merced County’s growth over December 2015 prices was stronger than the statewide average increase of 5.7 percent, CoreLogic reported.

Merced-area experts said prices are continuing to rise because of a shortage of houses on the market.

“What we’re seeing is a significant increase in demand over the last year,” Merced Yosemite Realty owner Terry Ruscoe said. “We are in a very low inventory right now.”

The median home price in Merced County is $230,000, according to Zillow.com.

The number of properties for sale in December declined by about 23 percent compared to the same time the previous year, according to numbers from Ruscoe.

The growth of UC Merced has more and more parents of students looking for a house in town, he said. The $1.3 billion 2020 Project is supposed to make room for 10,000 students by doubling the size of campus.

The target enrollment for the coming fall semester is 7,800, according to campus officials.

On the Westside, rising home prices can be attributed to spillover from the Bay Area, according to Geneva Brett, a real estate agent with Century 21 M&M and Associates in Los Banos.

“When you look at what’s going on in the Bay Area, (we get) people coming over here for the affordability, and there’s a lot of people that feel like interest rates are going to be rising soon,” she said.

Los Banos tends to attract commuters who work in the Bay Area, where homes are two or three times more expensive than in Merced County.

Los Banos, too, suffers from a shortage of houses on the market, Brett said. Seventy-one homes are on sale this month, she said, adding that’s an increase from a year ago but still “isn’t very many at all” for the market demand.

Prices have risen nationally, according to Corelogic.

“Last year ended with a bang with home prices up over 7 percent nationally, led largely by major metro areas,” Anand Nallathambi, president and CEO of CoreLogic, said in a statement. “We expect prices to continue to rise just under 5 percent in 2017 buoyed by lack of supply and continued high demand.”

This story was originally published February 9, 2017 at 4:16 PM with the headline "Home prices continue to climb because of demand in Merced, Los Banos."