Merced housing prices reaching all-time high. But is the California market shifting?
The median price of single-family homes in Merced continued to rise to record highs in August and September, but the market may soon level out.
The median price of a single-family home in Merced County climbed to $369,250 in August, eclipsing the previous record of $365,000 set just a month earlier in July, according to Infosparks data.
In September, the price of a home jumped to $375,000.
“While my Infosparks data only reaches back to (January) 2008, based on a few title searches I have done for homes that sold in the 2006 peak, I believe it is safe to say we are right on par with our previous all-time values,” said Brandon Ruscoe, an agent for Better Homes and Gardens, Everything Real Estate.
Single-family home prices in Merced have steadily climbed the past six months, starting at $320,000 in March, $336,500 in April to $356,000 in May to $360,000 in June to the numbers in July, August, and September.
The rise in home prices is happening across California.
The median price of a single-family home rose to $827,940 in August, the fifth record high in the last six months, according to the California Department of Finance.
The record-breaking amount comes after housing prices experienced a slight dip, to $811,170, in July.
The August record marks a 2.1% increase from July and is up 17.1% from August of 2020, according to the Finance Department.
Sales of single-family homes totaled 414,860 in August, down 13.3% from July and nearly 11% from August 2020. This marks the second consecutive year-over-year decline of sales volume and the seventh month-over-month decline in the last eight months, according to the Department of Finance.
Merced has seen a slight uptick in homes on the market recently.
“We are still at historical lows for our inventory. However, in May we only had 167 single-family homes active on the market in the county and jumped to 205 in August,” Ruscoe said. “I think word is starting to get out about this being a seller’s market, and more sellers are inclined to list and test the market, especially ones who purchased back in 2005 to 2007 and are no longer underwater.”
According to local realtor Andy Krotik, there are currently 91 homes for sale in Merced, up from 54 homes for sale six months ago. Before the COVID-19 pandemic, there were 295 homes for sale in Merced.
Krotik said he buyers in the market to prepare to be frustrated. With inventory so low, buyers need to move fast when houses become available and have clean offers.
“We’re starting to see signs of the market shifting,” Krotik said. “I think it’s the interest rate, increased inventory, and it’s the winter season. Traditionally, putting the last two years aside, once kids are going back to school and it’s the holiday season, people are more interested in the holidays than buying houses.”
Six months ago, the interest rate was down to 2.25%. The interest rate has increased to 3.25%.
“Interest rates are key here. If they continue to go up, the market will level, especially going into the holiday season,” Krotik said.
