Editor’s note: The following is a local real estate market review prepared by Realtor Ryan Searcy on behalf of the Merced County Association of Realtors.
The Merced County Association of Realtors would like to take this opportunity to share a year-end review of the local Real Estate market and express what a fantastic time it is to be a resident of Merced County!
2019 brought unprecedented growth to Merced County in multiple ways.
This summer, the California Department of Finance listed Merced as the fastest growing county in the state. As housing prices in the Bay Area and Southern California have skyrocketed, the Central Valley’s relative affordability has become attractive to a record number of people.
In welcoming our new neighbors, we begin to see the urgent need for additional dwellings to be built. For the time being, population growth has outpaced construction expansion and we’re left with a shortage of housing supply. The immediate demand for housing has presented local officials, builders and developers with a variety of challenges and opportunities. The surge in residency has driven the county’s vacancy rate to below 1 percent. As a result, a great deal of construction is already under way to combat the issue, which brings us to our next milestone.
The Merced County Building Department has already shattered the record for the amount of permits issued in one year.
More than 600 were for new homes. Around 1,000 for apartment units, and Los Banos added more than 900 new residents last year. The point is, we are growing about as fast as we physically can and we’re trying to grow even faster.
What does this mean for local homeowners?
Scarcity of inventory in this market has driven median sales prices up over 20 percent in the past two years. In fact, county records indicate the median home sales price and median price per square foot have been steadily rising for more than six years.
Simply put, if you purchased a home in Merced County in the past few years, your home is likely worth considerably more than it was when purchased.
This is called equity. When your home is worth more than you owe on it, you can borrow against your equity and reinvest in other endeavors or you can refinance and negotiate a lower mortgage payment.
Having equity in your home can give you many options but everyone will agree — it’s a good thing!
It is no secret that Merced County is experiencing a dearth in the rental market.
While availability is getting tighter, experts believe the majority of dwellings in California will be rentals by 2025.
Unemployment rates have fallen to an optimistic statistic and people are finding work more easily than in times passed. Additionally, the federal government is dictating fairly low interest rates and the opportunity for home buyers should be stronger. The only problem is the availability of affordable housing. Developers are scrambling to meet the need but they undoubtedly face their own set of obstacles including lengthy environmental reviews and countless legal processes.
Slowly but surely, the supply of housing will begin to catch up to the demand. Meanwhile, the impressive expansion of U.C. Merced is enticing larger developers into the county and the next decade promises to see the Merced area expand in ways few have imagined.
The swelling populations of the county’s West Side and unincorporated areas, the revitalization of Downtown Merced and the rise of the U.C. combine to leave Merced County residents with the notion that the future is robust!
The holiday season is traditionally a time when real estate activity slows a bit before picking back up in the new year. However, the overall picture reflects a steady market and gives local consumers every reason to believe that buying or building in Merced County is a terrific investment!