What You Need To Know About Our Market

What you need to know about the condition of Bay Area’s housing market.

Today, I’m discussing crucial things you need to know about the current condition of real estate. First, let's talk about the market. The good news is things seem to have stabilized. In most cases, we can make predictions again because things aren’t changing at such a rapid pace. However, we can’t look at comps that are over about 45 days. This predictability is providing a lot of confidence on all sides of the transaction.

However, many are still wondering how this market compares to 2008. The last crash was fueled by subprime lending, meaning banks were lending to borrowers with bad credit. People bought homes they could not afford, and many purchased with no down payment. There was a high mortgage delinquency rate and a stock market crash. 

Right now, we’re hardly seeing any delinquent rates, and things are a lot different. Our market is actually very healthy. The median prices are even with the first quarter of last year, and most homeowners hold their mortgages at historically low interest rates. Plus, after 2008, lending became a lot stricter in the Bay Area. Today, most people have a loan that has a 20%, 30%, or even 40% down payment.

"Interest rates will go down eventually."

In addition, there hasn’t been a surge of desperate sellers. Many sellers want a certain price for their home, and if they don't get that price, they'll rent. This may create some upward pressure on sales prices with homes coming off the market. If you're a seller looking to recoup what you paid in the last few years, including fees like staging and commission, that’s probably not going to happen. That being said, if you do want to make a move, ask yourself: “Where do I want to be and why do I want to be there?” Does it make sense for you to wait? The answer for most sellers is no. 

For buyers, there are tremendous opportunities, which is typical for this time of year. This is the biggest inventory we've seen in an entire year. The number of listings going into contract is down by about 27% and prices are lower than they have been for a very long time. If you're waiting for the bottom, you'll likely miss it. Timing the market is impossible, so buy when you know it's soft, which is right now. We've sold a lot of homes to buyers in the last few months and all of them have gotten tremendous deals.

Yes, interest rates are higher, but I believe they will go down. There are creative things you can do with loans that will allow you to have a lower payment for now, and then you can refinance when rates go down. Inventory is going to fall off the cliff in November and there will not be much to choose from.

If you want to buy in the next six months, then getting serious now and taking advantage of this inventory is critical. Call or email me with any questions. I look forward to hearing from you.

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