Finally some good news from the National Association of Realtors. February existing-home sales rebounded. Strongly. Up 11.8% which is the largest month-over-month gain since December 2015. Three of the four major U.S. regions saw gains. The exception? The Northeast. In general, the median existing house price increased 3.6 percent from a year ago to $249,500 in February.
As a comparison, the median sales price for a single-family home in Santa Clara County is $1.18M as of February 2019, down from February 2018’s $1.38M. On the positive side, sellers are getting slightly above list price, on average.
CONTRIBUTING FACTORS
One of the contributors to February’s surge was mortgage rates. The Federal Reserve indicated easing back from rate hikes. In a recent Reuters report, they cited the national housing market has been held back by land and labor shortage, leading to tight inventory and more expensive homes.
Certainly this isn’t big news for us in the San Francisco Bay Area. Santa Clara County’s unemployment rate is hovering just under 3%. Even though inventory has sharply increased since December 2018, the number of single-family homes in Santa Clara County is still below 1,000, substantially below a peak in October 2018.
To put things into perspective with mortgage rates, current rates are still historically low. See WFG National Title Insurance’s chart of interest rates since 1953. Today’s interest rates are actually below 2018 levels and they are still well below 5%.
PREPARING FOR THE SPRING SEASON
In a letter to our team, Sereno Group’s President, Chris Trapani, shared optimism as we officially move into the Spring real estate season.
Once again, our 2019 market forecast was spot-on and is beginning to be fulfilled right before our eyes. More inventory, but increasing multiple offers and buyer activity, partly from Q4 2018 pent up demand and heavy rains over the first few months of this year. The pending IPO’s will likely add another positive jolt to real estate activity and values over the course of 2019 and 2020.
Others in the industry also share Chris’ optimism for California’s real estate market. ManageCasa, a property management platform, provides a comprehensive analysis as well as predictions for 2019/2020.
PROVIDING GUIDANCE TO BUYERS AND SELLERS
For perspective on where the market’s been and economic predictions, I invite you to read my latest market analysis.
Whether you’re looking to buy or sell, you need an experienced guide in this complex and fast-paced real estate market. I’ve helped hundreds of individuals just like you successfully negotiate the most important financial transaction you’ll ever make. Contact me today to get started.