Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.
In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.
As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.
- Yvette Teng, LIC #01411998
The Big Story
The stage is set for 2024 to look a lot different from 2023
Quick Take:
• The Fed telegraphed that rate hikes are ending, and financial markets expect rate cuts in 2024, which will meaningfully reduce the cost of financing and increase home sales.
• High mortgage rates continue to drive low home sales, which are down 15% year over year. However, low sales have caused inventory to build, which will benefit the 2024 market as demand increases.
•Home prices are declining slightly, which is normal this time of year, but mortgage rates are keeping the monthly cost of financing a home at or near record highs.
Note: You can find the charts & graphs for the Big Story at the end of the following section.
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Big Story Data
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The Local Lowdown
Quick Take:
• The median single-family home price rose in the East Bay in November, staying in line with the six-month horizontal price trend. We expect that trend to continue until interest rates drop and more sellers come to the market.
• Active listings, sales, and new listings fell month over month for single-family homes and condos. Inventory will likely decline more for the next few months before rising in the spring.
• Months of Supply Inventory indicates the single-family home market still strongly favors sellers, but the condo market shifted more toward balance. It’s common for MSI to trend higher in the fall and winter, when fewer buyers are in the market and sales slow.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
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Prices increase across most of the East Bay in November
In the East Bay, home prices haven’t been largely affected by rising mortgage rates after the initial period of price correction from May 2022 to January 2023. Month over month, in November, the median single-family home price rose 0.4% in Alameda and 6.2% in Contra Costa. Condo prices were more mixed, with a 9.6% decline in Alameda and a 3.1% gain in Contra Costa.We expect prices to remain fairly stable in the winter months, but as interest rates decline and more sellers come to the market, prices will almost certainly rise in the first half of 2024. More homes must come to the market in the spring and summer to get anything close to a healthy market.
High mortgage rates soften both supply and demand, so ideally, as rates fall, far more sellers will come to the market. Rising demand can only do so much for the market if there isn’t supply to meet it. Unlike 2023, 2024 inventory has a much better chance of following more typical seasonal patterns.
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Inventory, sales, and new listings declined month over month
Single-family home and condo inventory barely increased at all this year, which is far from the seasonal norm. In 2023, inventory didn’t have anything resembling the typical sine wave, since far fewer sellers came to the market, especially in the first half of the year, and the low inventory and fewer new listings have slowed the market considerably. New listings have been exceptionally low, so the little inventory growth this year was driven by softening demand. Typically, inventory peaks in July or August and declines through December or January. However, this year, inventory peaked in October, further highlighting the atypical supply trend. In November, inventory, sales, and new listings dropped, which is normal this time of year. With the current low inventory levels, the number of new listings coming to market is a significant predictor of sales. Month over month, new listings fell 29% and sales declined 18%.
Thinking of buying or selling? Contact me today!
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🖥: www.YvetteTeng.com
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