We recently published an article titled “Navigating Bay Area Real Estate: Balancing Wealth Optimization and Limited Data Amidst Shifting Market Dynamics” that sparked significant reader inquiries seeking clarity. Within this piece, we delved into the year-over-year assessment of home values for June, a customary method to analyze housing trends.
However, exploring micro trends can prove beneficial during market volatility. This involves observing month-to-month changes. The challenge in doing so is the presence of seasonal fluctuations in the real estate market. The trends we compiled for San Mateo County and our residing city, Belmont, illustrate a gradual price recovery compared to the preceding article, where annual values had receded in quarters Q2-Q4 of 2022.
Though yet to reach the peak levels of 2022, at least for now, home values appear to have stabilized and are maintaining, if not gently appreciating.
We exemplify this by presenting an illustrative graph generated by Fred®, utilizing the Case-Shiller® data methodology linked here. While this data trails the market by three months, it remains valuable for investors analyzing value patterns. The most recent trend depicted suggests we may have surpassed the market trough and are trending upwards.
Opting for gradual growth is preferable due to its sustainability. The graph we provided indicates growth is so gradual that any economic shift could easily reverse the trajectory.
The market correction following the hyper-growth observed in Q1 of 2002—driven by imminent interest rate hikes—seems to have subsided. The question now is the duration it will take for buyers and sellers to adjust and realize that the era of sub-3% loans is unlikely to return, prompting them to proceed with their life plans.
Sales in the Bay Area have declined by 30%, a result of a similar 30% drop in available new listings.
Presently, prevailing market dynamics impact our housing sector, with both sellers and buyers hesitating due to current interest rates, despite their historical below-average nature.
A further incongruous position we have today is the dichotomy between sellers awaiting price rebounds and buyers finding that prices are already too steep.
According to a recent survey by Fannie Mae, the nation’s primary purchaser of secondary market loans, 82% of buyers believe it’s an inopportune time to purchase a home.
The query remains: When will one of these groups move into action?
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
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The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Drew Morgan—Broker Associate 01124318 | Christine Morgan—Salesperson 01174047
Co-Owners of Morganhomes, Inc. Licensed under RE/MAX Star Properties 01811140