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Yuba City real estate market forecast...

December 1, 2017

We also provide an assortment of charts showing local and regional sales and price information.

Sales activity is moderate and housing inventories remain low. Although building activity has increased, it is not keeping pace with increases in the population. The economy continues to grow and housing affordability is moderate. Home prices in Yuba City are up about 15% compared to two years ago. We expect to see continued increases in this range for the near term.

In the longer term, another housing bubble is currently forming in coastal California. It will force many home buyers out of those markets. Expect home prices in the Sacramento Valley, including Yuba City, to rise as well paid Bay Area home buyers come over the mountains in search of more affordable housing.
In speaking of another housing bubble forming, it should be noted that there is no expectation that the bubble will burst anytime soon. Housing inventories remain quite low. Additionally, bubbles take years to form and we do not see the signs typically associated with the later stages of a bubble. Yuba City's median home price of $288,000 is still well below the peak of $352,950 reached in November of 2005.

Positive Market Factors
Negative Market Factors
  1. The State of California estimates that California needs to build 180,000 new housing units per year. We have averaged less than half of that for the past 10 years because of California's restrictive growth management laws and high building fees. This housing shortage will put upward pressure on prices. The State Legislature took some steps earlier this year to ease the supply problem but it will likely take years before the impact of these laws is felt.
  2. Scarce inventory: There are only about 372 homes listed for sale in Yuba and Sutter counties today. Importantly, this number has been stable for about the past three and a half years. As a point of reference, there were 1,048 homes listed for sale on September 1, 2006.
  3. Rental inventory is very low and rental rates have risen approximately 10% in the last year.
  4. Sales activity is moderate and relatively stable. We have averaged about 70 to 75 sales per month in Yuba City since 2012. This compares to about 45 to 50 sales per month from 2006 through February of 2008. There are currently about 2.2 months inventory on hand.
  5. Thirty year fixed interest rates have been at or below 5.0% since January of 2009. These are the lowest interest since at least 1971. Today's rate for a 30 year fixed rate loan is about 3.875%.
  6. Housing affordability remains good. Approximately 53% of Sutter County households can afford the median priced home according to the California Association of Realtors. Sacramento housing affordability is at 45%.
  7. Only about 20% of San Francisco Bay Area households can afford the median priced home. This will put further pressure on home prices in the Sacramento region including Yuba City as Bay Area households seek more affordable housing options.
  8. The number of homes with negative equity continues to decline. This increases the number of prospective buyers as home equity is a primary source of down payment money.
  9. The economy continues to grow.
  1. The Federal Reserve Bank announced in September that it will begin selling $4 billion per month of mortgage-backed securities (MBS's) beginning in October of this year. The pace of MBS sales would then increase by $4 billion each quarter up to a maximum of $20 billion per month. This will likely push interest rates higher. In fact, the National Association of Realtors is predicting that interest rates on 30 year fixed rate loans will average 4.6% for 2018 and end the year at 5% in contrast to last month's 3.9% rate.

You can see the latest real estate market charts to get a bird's eye view of the Yuba City market.


What Clients Are Saying

quotes"I have nothing but great things to say about Lloyd and his wife, Tracy. They sold my home in four days and helped us get the home that we wanted. He followed up on all details above and beyond anything I expected. He has my highest recommendation.
- John


Lloyd Leighton Realtors

Address: 1212 Highland Avenue
Yuba City, CA 95991-6115

Phone: (530) 671-6152
Fax: (530) 671-3904

Cal BRE Lic. #00951505