Fairfield and Vallejo (Solano County) Housing Market Forecast for 2021

Note: We have an updated version of this story published in February 2021.

The Fairfield and Vallejo housing markets are seeing a surprising level of demand from buyers right now, despite the fact that we’re still in a pandemic. We expect these conditions to continue through 2020 and into 2021.

The forecast and outlook for the broader Solano County real estate market is mostly favorable as well, with strong demand putting upward pressure on home prices.

It’s hard to believe we are talking about “hot” housing markets when there is still a public-health crisis taking place across the country. But there’s no denying the facts. The Fairfield and Vallejo real estate markets are hot right now.

Home buyers are competing fiercely all across Solano County, often waving their contract contingencies just to secure a property. In that regard, it resembles a sellers’ market. There just aren’t enough homes for sale right now to meet the demand from buyers.

As a result, prices will likely continue climbing for the foreseeable future, as they have in recent months.

Fairfield and Vallejo Among the Hottest Housing Markets

According to the national real estate brokerage Redfin, a lot of the homes for sale in Fairfield and Vallejo are currently receiving multiple offers from buyers. And some of those offers have waived contingencies, which means buyers are doing everything they can to outcompete one another.

The company also reports that “hot homes” are sometimes selling for 2% to 3% above the original list price and going under contract in around 10 days, on average.

These trends and metrics indicate a hot housing market. In many ways, the Fairfield and Vallejo real estate markets (and Solano County as a whole) are behaving as if COVID-19 never happened. It’s surprising. It’s counterintuitive. But it’s true.

Back in February, before the COVID-related shutdowns, the research team at Realtor.com ranked Fairfield and Vallejo as two of the hottest housing markets in the country. Their report was essentially a list of the 20 “hottest markets” at the metropolitan level. The Vallejo-Fairfield metropolitan statistical area (i.e., Solano County) appeared in the number-six position on their top-20 list.

Now, in late summer 2020, it seems as though the Fairfield and Vallejo housing markets are warming up once again. Tight supply and strong demand and forcing buyers to outfox one another for desirable properties.

Home Prices Up Across Solano County

As mentioned above, home prices within the Solano County housing markets are still rising steadily. Average home values within the Fairfield and Vallejo real estate markets are currently around $500,000 and $456,000, respectively. In both cities, that’s an increase of roughly 6% from a year ago.

Similarly, a recent report from the California Association of Realtors (C.A.R.) showed that the median sale price for existing single-family homes in Solano County rose by 7.5% from July 2019 to July 2020.

Related: Bay Area house values not falling

Given the current supply and demand situation in the area, one could easily make a positive forecast for the Fairfield and Vallejo housing markets going into 2021. Granted, no one can predict future real estate trends with complete certainty. But it seems likely that home prices across Solano County will continue to climb over the coming months.

Buyers Competing for Limited Inventory

According to the August 2020 C.A.R. report mentioned above, Solano County has a very low level of housing inventory.

The county was down to a 1.7-month supply of homes for sale, as of July. That is significantly lower than what’s considered to be a balanced real estate market. It’s also one of the lowest inventory levels among California’s 58 counties.

This is partly why forecasts for the Fairfield and Vallejo housing markets suggest that home prices will likely continue to climb. It’s a supply and demand story, as always. There is plenty of demand within these real estate markets, but not enough supply to go around. Prices tend to rise under such conditions.

As you might imagine, sales activity is currently bustling across Solano County. The August C.A.R. report showed a 12.7% increase in existing home sales from June to July of this year. Annually, sales were up by nearly 9% from July 2019 to July 2020. And all of this during a pandemic.

A Positive Forecast Going into 2021?

So, what’s the general forecast or outlook for the Solano County real estate market? What kinds of predictions might we issue for the Fairfield and Vallejo housing markets?

In a word, competition. Demand will probably continue to outpace supply for the foreseeable future. This imbalance will force home buyers to compete fiercely for a limited number of properties. It also puts upward pressure on home prices, at a time when it’s sorely needed.

Disclaimer: This article includes forecasts for the Fairfield and Vallejo housing markets through 2020 and into 2021. Such predictions are the equivalent of an educated guess and should be treated as such. Economic and housing projections are based on trends that are constantly evolving.