1st Quarter In Review
Bay Area real estate has been very resilient, and the market numbers are showing it. Despite tech job layoffs, Fed rate increases, and uncertainty about the economy, reports are confirming there’s a higher than expected demand for houses and comparatively low available inventory. I’m finding that spring is shaping up to be busy time for buyers and sellers.
Prices Stabilize
Altos Research graphed the percentage of single-family homes with recent price reductions spanning 2018 to 2023 to date. Comparing the end of 2022 where 40% of homes made price cuts, first quarter 2023 shows that number is now closer to 30%. The price reduction data shows that demand is sufficiently high, with buyers buying at current asking prices. So far this year, it points to home price resiliency.
Inventory Remains Very Low
Looking at the number of new listings nationally, the data points to lower inventory. RealTrends’ analysis indicates they don’t anticipate a surge of new inventory coming to the market. They anticipate that 2023’s home supply will stay closer to Covid-19 pandemic lows. Again, this puts pressure on buyers to agree on prices closer to listing prices.
Relatively Steady Month-Over-Month
The California Association of Realtor’s report below shows the median sale prices of single-family homes comparing March 2023 data to February 2023 and February 2022. For the entire Bay Area, the month-over-month data shows positive growth (17%).
Digging deeper at county-level data, eight out of nine counties showed positive month-over-month growth; only San Mateo County reported a -10.6% change. The biggest gains were seen in San Francisco, Santa Clara, and Contra Costa Counties.
In general, I don’t really focus too much on median price statistics for several reasons. First, the median price isn’t an average, which is a better measure of home values in my opinion. If more starter homes – usally listed at a lower price point – sell in a month, it artificially pushes down the median price. Second, I find the quartile report in our monthly county reports more interesting; it reflects home values by square footage and lot size.
What I'm Seeing
The market has remained consistent from what I’m seeing in the data and more importantly with working with clients.
- Overall, inventory is still very low, especially when you compare to quarters and years past. Many homeowners are reluctant to lose their extremely low mortgage rates. So, there must be a compelling reason to move. I am starting to see some clients considering a move, which may translate into more inventory available in the coming months. Even so, I really don’t think this slight loosening is enough to really make a significant dent in available new inventory.
- Much of Q1 was plagued with winter storms. Storm damage and bad weather delayed listings to market, putting even more pressure on our low inventory levels.
- On the buyer side, I’m seeing that demand remains very high. This need for available homes translates into open houses that are well attended.
- The Bay Area news has been full of layoffs. While initially unsettling, I am finding that those laid off are finding work and rebounding relatively quickly.
- If you’re thinking about selling, it’s crucial your home is priced correctly. When helping sellers, I make sure a thorough market analysis informs our pricing and marketing strategies. Homes can sell quickly, especially if they show well, are prepared for market, and are located in a good neighborhood with desirable schools.
- Homes that sit typically don’t follow the market’s best practices: prepare the home properly by highlighting its best attributes and use custom research to determine a winning list and marketing strategy.
County Market Reports
When examining January through March 2023 data, using Santa Clara County single-family homes to illustrate the changes in the market, we found that:
- Inventory – there was an uptick in the number of homes available for sale. Even so, March 2023 inventory is still well below March 2022 levels.
- Closed Sales – The number of closed sales is trending up, with March 2023 nearing the 650 units per month mark. Yet, this is still one third less than March 2022’s sold volume.
- Days on Market – has remained relatively steady throughout the first quarter, ranging from 1.6 to 1.3 months.
You can see each county’s market report for single-family homes and townhomes/condos for January 2023 and February 2023:
Reach Out & Connect
I’m meeting with clients via phone, video conferencing, and by appointment. 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 like you successfully negotiate the most important financial transaction you’ll ever make.
For buyers and sellers, I invite you to call me to discuss your situation and options.
Q1 2023 Market Reports
Santa Clara County
