March Market Update – Part Two
Housing Market Update for the East Bay
Median home prices have been trending upward since summer 2019 due to low-interest rates and a period of economic expansion. The stock market hit all-time highs in the third week of February before pulling back considerably.
In January, median home prices in both Alameda and Contra Costa increased slightly compared to last year. In general, appreciating prices signal a healthy demand for housing and encourage sellers to price their homes slightly above comparables.
Here is a look at the median prices for single-family homes across the major cities in the East Bay. The Lafayette/Moraga area was the most expensive, with a median home price of $1.5 million. Emeryville was the most affordable.
Months supply of inventory measures how many months it would take for all current listings on the market (including listings under contract) to sell at the current rate of sales. In California’s high-demand market, a balanced supply level is three months, which means there are three months of housing inventory on the market at the current rate of sales. A market with less than three months supply of inventory favors sellers.
In January, supply levels inched up from the previous month, reversing its downward course over the last 12 months. The January months supply of 2 in Alameda and 2.3 in Contra Costa are considerably low for January, when the market typically cools. This trend is caused by more buyers entering the market since the beginning of 2019 to take advantage of low-interest rates.
The sale-to-list price ratio reflects the difference between the original list price of a home and the final sale price. For example, a ratio of 100% means that a home sold for the price it was listed. Single-family homes typically have higher sale-to-list price ratios than condos.
In January, most East Bay properties sold close to the original listing prices. Neither buyers nor sellers are making many price concessions based on the listing price of the home.
Days on market (DOM) measures how many days it takes from the first day of listing for a seller to accept an offer. The East Bay housing market spent much of the last 12 months moving slower compared to the previous year. In January it finished down from the previous year.
In the East Bay, condos take longer to sell than single-family homes. Single-family homes in Alameda moved quickly in January, spending only 20 days on the market.
Looking ahead, we believe lower interest rates will continue to benefit buyers, and supply levels will shrink even further as buyers continue to have access to more favorable financing.
Current rates are so low that 9.4 million borrowers could save an average of $272 per month if they were to refinance to a lower rate (Black Knight). Approximately three million homeowners who took out mortgages in the past three years now could save 0.75% or more on their mortgage rates. That’s a collective $2.6 billion per month—the highest potential savings in twenty years.
As always, we remain committed to helping our clients achieve their current or future real estate goals. Our team of experienced professionals would love to discuss all the information we’ve shared in this newsletter. We welcome you to contact us with any questions about the current market or to request an evaluation of your home or condo.