It's only March & what a year! After some major storms, the state drought is behind us with much damage repair and flood prevention awareness planning in front of us. The new Presidential administration is underway and that is a topic for a whole other blog & industry... The economy is doing remarkably well, inflation is firming up and the first non-December rate rise in years hit last week. Many expected this to be the year that prices moderated and inventory loosened up...but that has yet to be the case. In this week's blog we wanted to share the latest available data from the California Association of Realtors (CAR®) on pricing and inventory.
With regards to year-to-year median sales prices, the February data reveals as follows:
| CA Single Family Home Prices: Up 7.6% (Feb 2016 to Feb 2017)
| CA Condo/Townhome Prices: Up 4.5% (Feb 2016 to Feb 2017)
| SF Bay Area Single Family Home Prices: Up 12.2% (Feb 2016 to Feb 2017)
| Santa Clara County Single Family Home Prices: Up 16.7% (Feb 2016 to Feb 2017)
***As reported by CAR®: http://www.car.org/marketdata/data/countysalesactivity/
With regards to inventory, the lack thereof can be seen by the drop in home sales. The fewer the homes on the market...the less sales there are, right?!
In fact, a state survey of over 70 real estate associations documented inventory shortages as the number one concern in the market today (yes - even moreso than affordability!).
***Data above courtesy of CAR®'s "February pending home sales and Market Pulse Survey".
Clearly there is a strong correlation between the lack of supply and the upwards movement of prices. Its Econ 101 Supply & Demand in a nutshell...without the geeky class project (where you invent your own business and sell to your peers who are your competition anyway!). One other thing you may have noticed is the large discrepancy between the state year-to-year changes and the local county and SF Bay Area year-to-year changes. We have the largest home price jumps AND largest home inventory drops, which explains the fierce competition, and maybe our gray (or lack thereof!) hair?!
The projected rate rises further threatening affordability may drive some move-up buyers or downsizers off the fence, and those thinking of selling should consider doing so IF they have a plan in place of where to go (and a great agent team who can help you create a winning buy/sell strategy!).
Let us know if you need any assistance planning and prioritizing your real estate goals given the current state of inventory and pricing. There may never be the 'right' time - only the time that is right for the circumstances you are in and the potential of the current market. We'd be honored to help you assess both!
All our best,
Mark & Jason