540 Ivy, Grass Valley Bungalow, 2 and 1, under 800 sf, pending in 3 days at $299,000

I was told there were multiple offers for this modest bungalow. Not the greatest house, located in a neighborhood where one end of the street is considered highly desirable, and the other end is considered undesirable, this home is in the middle of the block. Listed for $299,000- that’s $380 per square foot. Nothing in this home would seem to indicate that high of a price tag. What’s happening?
Inventory is really tight right now.
Interest rates are rising, and buyers may be panicking that they will be unable to afford the mortgage in the future.
But I don’t think these two factors alone can explain why the sudden rise in prices on the least expensive homes. There seems to be another factor.
For the last couple of years the low end of the real estate market has been defined by sellers flipping homes they bought in the great recession years between 2009 and 2012. People who bought in those years did not sell immediately after the market started to rise in 2013. Some sold in 2013, but more sold in 2014 and every year since thereafter there were homes being sold that were purchase in the down years. This year, that inventory seems to be fairly fully exhausted, and there are no more homes, bought in 2009 or 2010 that are now being flipped. The result, is- sellers today paid more for the homes they are selling than the homes that have been sold in the last few years and so base prices are rising, and seller equity is dropping. Sellers feel confident and comfortable squeezing the extra money out of the home they are selling precisely because they paid more for it to begin with. That is actually a sign of a normal market, and it might just be an indication of the long term trend in pricing.

Author: gordon

Nevada County Resident since 1988. Painting and Decorating Contractor 1985-2003 Nevada County Realtor Since 2004 Member of the Nevada County Masters Club (top producing agent) Every Year Since 2004