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We keep hearing that the days of a strong sellers’ market are over and that may be true. But there are still a few areas where the sellers’ market is strong (although nothing west of Texas…)
The news continues to be tough in the housing market. Mortgage rates climbed to 6.73 % for a 30-year fixed mortgage while hoe prices increased by 6.3%.
New listings have declined for 35 weeks straight, down 26% compared with 2022. And houses on the market continue to sit for up to 18 days longer than last year.
Spring is here (almost) and the housing market is expected to … who knows? Mortgage rates are high and, based on the comments from the Federal Reserve on raising interest rates, expected to go higher.
Sellers have seen prices moderate a bit and and many have been forced to decrease asking prices. Houses are sitting on the market much longer as well.
Most analysts expect to see an upturn in the market in the coming months but nowhere near the craziness of the pandemic years or even the pre-pandemic times.
Some good, some not-so-good, but here are the current trends in the housing market:
New listings – essentially sellers putting their homes for sale – are down 13 percent from a year ago. Analysts agree that many potential sellers simply don’t want to be the position of becoming a buyer again.
Many, many qualified buyers have lost out to all-cash purchases over the last three years – often several times – and the cumulative effect is simply burnout.
Even though home prices have moderated a bit, high mortgage rates and a shaky economy have seen home sales decline by approximately 33 percent. And some metropolitan areas have seen sharper declines that others. The ten US cities where home sales have fallen the most include:
The news is good for the city of Oakland as their plan to add 26,000 new homes in the next 10 years has been accepted by California’s state housing officials.
This means that Oakland will be eligible for needed funding and maintaining a degree of control over local development rules.
To date, only five local governments – Oakland, San Francisco, San Leandro, Emeryville, and the city of Alameda – have had their final plans approved by the state.
According to Redfin, for the first time in over 10 years, Bay Area homes are selling, on average, for less than the asking prices. Of course, with mortgage rates around 6.3% many would-be buyers are being forced to wait.
With less competition, those who are still in the market now have a wider choice and a stronger negotiating position.
In an era when cities are shrinking or, at best, remaining stagnant, from 2010 to 2020 Dublin saw it’s population increase 58 percent from 46,000 to 73,000, making it the fastest growing city in California, let alone the Bay Area.
And the reason is simple: Dublin has built housing. From 2010 to 2020, 1,800 new housing units were permitted per 10,000 existing residents as of 2010; nearly double the rate of Milpitas which ranked second in permits approved.
A new report by realtor.com lists the metro areas where it’s cheaper to rent than to buy and the San Francisco / Oakland / Hayward area finished second nationwide as it’s 97 percent cheaper to rent a starter home.
Specifically, median rent for a starter home in the Bay Area is $2,943 and the monthly cost to buy is $5,798.
Not surprisingly the San Jose / Sunnyvale / Santa Clara area finished 4th with a rent-to-0buy difference of 83 percent.
