Real estate is on sale right now in Santa Cruz County, and much of the California Bay Area. Yes, you heard that right. The first three months of 2023 saw year-over-year price decreases of -6.4%, -13% and 25% respectively. This is the first time the market has seen a consistent decline since 2010 - 2011 if we don’t include the blip of pandemic chaos in early spring 2020 - an anomaly if you ask me.
After more than two years of pandemic-driven housing boom and low mortgage rates that boosted prices, we are now seeing a shift in the market, with factors such as affordability, supply and job growth playing a more significant role in determining home prices. Cities most closely associated with tech have the fastest falling home prices (San Jose, San Francisco and Seattle for example). Moreover, interest rates have risen year-over-year putting downward pressure on home prices as they impact affordability. Currently a 30-year fixed mortgage is standing at around 6.42% as compared to 4.17% in March last year.
Many economists expect home prices to fall further on an annual basis this spring or summer.
While it is too early to tell how recent turmoil in the banking industry could slow the economy, the trend seems to be moving more towards a buyer's market, or at least towards equilibrium.
So, if you are planning to buy a house, now may be a great time to jump into the market. Remember, marry the house and date the rate. You can refinance down the road, but the home price and the property taxes in relation will remain the same.
With the current market conditions, buyers can find great deals on their dream homes, while sellers may have to adjust their expectations and pricing strategies. If you are a seller just remember: it is still very much a seller's market and inventory remains low.
For those wondering what this means for you as a buyer or seller in the months ahead, it is recommended to connect with a highly experienced real estate professional. This is a difficult market to navigate, but opportunity awaits.
With over 10 years of experience I can guide you through the market shifts and trends and help you make the most informed decisions. If you have any questions or concerns about buying or selling a home, feel free to connect with me:
