When the cost of buying a home is close to the cost of renting one then the decision to buy often is fairly easy. However Davis is one area where owning a home is much more expensive than paying rent. Here are a few intangibles of owning a home.

• As a property owner you are likely to be more invested in the community – caring more about issues like taxes and schools than if you were just renting.
• Even though it costs more money to make a mortgage payment, at the end of 30 years (if you do not refinance) you will have been forced to save the original cost of the home and it is likely that the house will be worth more at the end of the 30 years than when you purchased the house.
• You can decorate, paint, remodel without needing permission from a landlord. Although if you do make modifications, especially in the city of Davis, be sure to check with City Hall because when you go to sell your home, they will do an inspection and then make you pay extra for things that required permits.
• You won’t get evicted if the landlord decides to sell or for whatever reasons decides to stop renting the property to you – so as long as you make the mortgage and other payments on time you can stay in the house you buy for as long as you like.

Interest rates are really attractive right now and while prices have stayed fairly strong in Davis they are lower than they were at the height of the market. If you are looking to buy for the long term and not just to flip a property you may want to start getting a feel for the market. It is not very likely that there will be a complete meltdown of home prices in Davis – there is limited supply and because of the schools, the university and the community, there is a strong demand to live here. Let me know if you would like help to start your Davis home search.

This is a little late because January is almost over but here are my predictions about Davis Real Estate in the upcoming year.

• Inventory will remain relatively low. People who don’t have to sell their homes will likely keep them off the market.
• The rental market will see a slight increase in vacancy rates. The vacancy rates (meaning the number of rental properties that are not occupied) have been very low for years in Davis. However with UC Davis providing some additional housing through West Village and with housing prices falling dramatically in areas surrounding Davis this will create a slight increase in available rental housing.
• Interest rates will stay low throughout 2012.
• Although rates are low some buyers will stay on the fence because they think prices will fall more than rates will rise.
• There will be some distressed sales in Davis (short sales and foreclosures) but as in the past several years, they will not make up the majority of home sales.

Thinking about 2012 predictions – nearly the entire list would have been true for 2011. Sellers likely will feel prices are not strong enough and buyers sitting on the fence that prices are too high. Buyers can take comfort in that there have been some motivated sellers out there and when a property is priced correctly it will sell quickly although other buyers are out there and sometimes this creates multiple offer situations even in this market. With a relatively stable population and very little new construction things in Davis look to stay on a fairly even keel for the year.

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According to TrendGraphix there were 15 closed sales of single family homes in Davis for the month of November, that is one less than for October 2011 and 2 more than what sold in November 2010.

Inventory continues to track lower than last year while pending sales remain steady. Interest rates remain at some of the lowest levels ever but there is not a sense of urgency on the part of many buyers. Because Davis has relatively low inventory and also relatively few distressed properties there is still a good chance that a properly priced home will sell quickly.

Technically there are still a few weeks left in 2011 but the majority of the year is over and here is the year to date breakdown for single family homes in Davis.

• Central Davis 54 sales
• North Davis 48 sales
• East Davis 67 sales
• West Davis 40 sales
• South Davis 72 sales

While there were slightly more homes sold so far this year in South Davis than any other neighborhood it does not mean that a well priced home will not sell quickly in one of the other Davis Neighborhoods. South Davis is made up of everything south of Interstate 80 and also includes El Macero.

For the purpose of this post and on my website I define “Luxury Homes” as anything listed over $750,000. I understand that not every home in that price range is “Luxurious” however often it gets more difficult to get financing for properties when they start to reach this level. Currently there are 25 properties in Davis for sale with a price of at least $750,000. There are currently 112 homes for sale in Davis so luxury homes represent 22% of the current inventory. There are currently 3 pending sales in this price range and there have been 39 sales since January 1, 2011.

Of properties that sold over $750,000 there were 18 homes that found a buyer within the first 30 days of going onto the market. The average sales price to list price was quite high for these homes at 99.04%. Homes that took longer than 30 days sold between 93.76% – 88.03% of their list price. The average number of days on market for this price range was 101.

Sometimes it is difficult when a property has some unique features to determine a list price, but what the past years sales has shown is that if a price appears “reasonable” to a buyer they will make a good offer and do so fairly quickly. Sometimes properties in this price range take longer than average to sell because often a buyer of this type of home has another house to sell. If the house is also in Davis it is my experience that as long as the house to be sold is priced properly and the buyers are motivated that they do whatever is necessary to get their current home sold.

Statistical information pulled from MetroList MLS. See Luxury Homes for sale in Davis.

One of most important decisions when selling a house is determining how it should be priced.  Pricing a house too high will effect the amount of buyer interest and often cause it to stay on the market longer than a well-priced home. The chart shows for homes that have sold during the past 14 months that the ratio between the original list price to the actual sales price has varried between 90 and 97%. It is important for buyers to know this information – and making an offer 20-30% less than the list price most likely will not be accepted.

The numbers get even tighter when you look at the last list price to sales price. For the past 14 months they have consistantly been 97 to 98%. What this means if you are a seller and you are not getting offers is that buyers think your price is too high. Buyers when you see a price reduction to what other comparable properties are selling for, it is probably not the best time to put a low-ball offer in on the property. The housing market in Davis is still tight enough that demand for homes in Davis is still pretty strong.

Why is Davis a bike friendly community and why we are designated a platinum bike city?

Davis is a very bikeable city, my husband and I are sharing a single car right now and it has not been a problem. Everywhere I  go on a regular basis is within biking distance,  the majority of my daily routine does not even consist of riding on the street but on bike paths. It took a few weeks for my now 8 month old baby to get used to the bike trailer (we started with the trailer when she was six months – in her car seat) but we now can go most anywhere in Davis. With bike/pedestrian overpasses crossing over the freeways and a lot of greenbelts and bike paths, it is no wonder there are so many bikers in Davis. If it has always been a dream to live somewhere that is bike friendly – then consider moving to Davis. If you are a casual bike rider North Davis has a really nice series of greenbelts that are a lot of fun to bike.

Davis is known for being a very bicycle friendly community and it is easy to travel from one part of town to another by bike. Although it isn’t a totally new feature, you can now plan a bike route using google maps. For example a trip from downtown Davis to downtown Dixon is 11.5 miles and it is estimated to take about 56 minutes. Of course if you are a speedy rider it would likely take less time but 12 miles an hour is a pretty reasonable rate. For casual riders like myself this is a good tool to estimate how long a bike ride is likely to take – I’m more a ride around town kind of cyclist these days.

View larger map

Once you have your start and end point, you can always move the blue line to different streets/roads to create a different route. There is also often several options just like with driving directions. Since this is Davis – I would be happy to arrange a home tour by bike – I’m not the fastest cyclist in town but can offer a slow steady ride of different neighborhoods in Davis.

Here is a snapshot of single family homes in Davis from July 2010 through September 2011. The light green represents homes for sale, while the red line are pending sales and the dark green line are properties that sold in that month. Davis has a very cyclical home cycle and more homes typically will sell during the spring and summer months than the rest of the year.

There were fewer homes for sale in Davis in the summer of 2011 than in 2010. While inventory was down, this really did not have an effect on home prices. Average price per square foot in September 2010 was $265 and in September 2011 was $264. While price per square foot isn’t always a good way to make an offer on a house, it does show there was not a lot of variation in the Davis market in the past year, even with lower inventory. Interest rates are still near historic lows, will this mean that Davis will have a stronger fall than we typically see. It will be interesting to watch because September pending sales were lower than what we saw in 2010. The next few months could be interesting to watch. Currently you can search all active Davis homes for sale now with my website.

While some of this information is a little out of date – the article was written February 2010 – it still has some good pointers and some reminders like the first time homebuyer’s federal tax credit is still available for current military personnel for several more months.

It’s always best to speak with your tax consultant for specific tax savings but doesn’t hurt to have this information as a way to ask questions.