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Change Is Inevitable!

Happy Summer, Friends! I know for many it's a busy season, but I hope you've made time for a bit of fun shared with family and friends. If you have school aged children like me, doesn't summer feel much shorter than it used to be? We have just a few weeks left and are busy filling backpacks with new school supplies! I, for one, look forward to settling back into a routine.

As your trusted real estate advisor, I want to keep you up to date on the housing market. Whether you call it a change, shift or decline, there is no doubt that the absolute frenzy of the past couple of years has come to an end. Below I share some statistics on the current market and predictions on where it's headed. Headlines regarding housing are popping up everywhere, and much of what you will read covers the national average. I also share my take on what I'm seeing locally in the Bay Area market.

On a lighter note, I also share a list of free outdoor concerts. Nothing better than live music on a warm summer night! I hope you can catch one before the season winds down.

As always, feel free to reach out with any real estate needs. I can receive no greater compliment than your referral. I would be thrilled to assist your family and friends with their upcoming move!

All my best,
Daniella

Comparing the March stats sent last quarter to the recent June stats below, here are my key takeaways:

The median sales prices in the Bay Area have not moved. This is the first quarter-over-quarter tracking without an increase in value in the past 2 years. Alameda and San Mateo's medians were static (less than 1% change) , while Contra Costa is down 2.5% and Santa Clara's median sales price decreased by 5%.
Active listings have doubled in 3 of the 4 counties.
Costa Contra experienced the largest decrease in number of sales (17%).
Average Days to Sell increased slightly by 3.5 days. At an average 15 days on market with less than 2 months inventory, we are still in a historically fast-paced market.

Rates, Recession, Inflation....OH MY!

What’s happened and will happen with rates? The low rates of the last few years were an anomaly. Mortgage rates have been consistently going up since the start of this year, and are expected to climb throughout 2022. Of course, interest rates are dynamic and unpredictable -at least on a daily or weekly basis- as they respond to a wide variety of economic factors. The Federal Reserve has increased interest rates three times this year and has signaled its intention to hike rates again to try to contain inflation.

Does a recession equal a housing crisis? Today's housing market is nothing like it was in 2008. Home prices have appreciated in 4 of the last 6 recessions. Home prices fell only twice- minimally in the early 90's, and then by nearly 20% in the housing crash of 2008. Most economists and industry experts say the housing market is not a bubble ready to pop.

Should I buy a house with inflation on the rise? Inflation is at a 40 year high, and we are all feeling it in our daily purchases. But real estate has remained one of the best ways to hedge against inflation. In most decades since the 70's, housing has outperformed inflation and it remains one of the best long-term investments.

Where are home prices headed? After this year, experts predict home price appreciation will continue, but at levels that are more typical for the market. Don't anticipate another double-digit appreciation, but likely a more normal price appreciation of 4-5%.

My take on the market...

The sky is not falling! This is an overdue correction of an abnormal market. What we are seeing today is a market that is merely reaching a new normal of sorts. We needed a slowdown, but the adjustment is happening faster than we expected.

Higher interest rates spurred much of the change but in my experience, rates aren’t solely to blame. We started to see signs of a cooling market as housing affordability worsened and buyers were burnt out from the seller-dominated market. Some buyers have begun to mitigate the rising cost of home ownership by opting for 5 or 7 year adjustable rate mortgage or by widening their geographic search area to more affordable regions.

Buyers and sellers should know that your home's value isn’t projected to fall but waiting to make your purchase does mean your next home could cost more. Rents are also at historic highs, so I encourage future buyers to run the numbers on a potential purchase and consider the benefits of homeownership.

The average homeowner gained $64,000 in home equity over the past 12 months- some parts of the Bay Area jumped 32% in value! Yes, the rate of growth has slowed and in some areas your value may even dip a bit, but at present it appears you will retain most of the massive equity growth you've experienced in the past 2 years.

The market data can also vary widely depending on the desirability of the neighborhood, school district and type of property (i.e.: single family home vs condo). The market shift is also price dependent. For example, I’m noticing more price reductions in single family homes in Concord under $1 million, while the $2-2.5 million market in Lamorinda is still seeing multiple offers. Presentation and condition of the home also plays a factor as buyers have more homes to choose from and are exercising patience.

There is no way one can time the market. If you find a home you love and plan to be there 7-10 years, there really is no bad time to buy. With my clients I always go back to your "why." Why do you want to make a move? Is it for a new job opportunity, a lifestyle change, to be closer to family? With many of my clients, it’s a non-financial benefit that is the reason for their move.

Summer Outdoor Live Music!

One of my favorite summertime activities is enjoying live music outdoors. In the East Bay, we are lucky that several cities host summer series. From cover bands, to rock and soul, you’ll be sure to find one to fit your taste. All are family friendly and free!

Clayton: Clayton may be a small town, but they pack big crowds at their Concerts in the Grove series on Saturday nights. My tip: Go early to set out your lawn chair and pre-order a pizza at Skipolini's!

Concord: Pair up your weekly produce shopping with live music at Concord's Music & Market series on Thursday evening at 6:30PM (farmer's market starts at 4PM), or check out Tuesday night's Blues Series.

Danville: Danville’s Music in the Park series is held on Saturday’s at the picturesque Oak Hill Park and always features a fun food truck. A Tom Petty Tribute band is playing on the 23rd!

Lafayette: Rock the Plaza Friday evenings. I love the location within walking distance of some of my favorite restaurants on Mount Diablo.

Pleasant Hill: The Summer Concert Series is back, located in front of Jack's Restaurant from 7-9PM. Next up on June 16th is East Bay Mudd (Classic Soul + R&B)!

May I ask you for a favor?

May I ask you for the favor of writing a review about your experience with me? I hope you were delighted with my service, and I would appreciate your feedback about it. Virtually all of my new buyers and sellers come from referrals from happy clients. These reviews help future clients gain full confidence in my skill and professionalism. If you have worked with me in the past, I kindly ask you take a minute to write a testimonial. Click the link below to leave a short review on my Google Busines page. I am super proud of my 5 star reviews!

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