The Super Bowl is in the books, the acacia trees are blooming, and Ski Week is upon us. All of these things signal that we will soon arrive at the precipice of the Spring Real Estate market. And as we prepare for what is typically the busiest time of the year, the buzz word of the moment is “uncertainty”.
Up to now, we have managed to valiantly fight off inflation, and a possible recession, but we are not out of the woods yet. Unemployment figures remain stubbornly strong which provides the FED pause when considering if they have done enough to cool the economy. Rates have seemingly plateaued but with each passing report, that can quickly change. And here in the Bay Area, the biggest tech companies in the world are shedding jobs by the tens of thousands adding a micro layer of uncertainty to our environment.
What does all this mean for our market? Clearly, the mood is not bleak, but it is markedly reserved. The days of unbridled bidding are over, but a dearth of inventory is resulting in solid seller performance. While many buyers remain on the sidelines, content to hold onto their savings, those that remain active are highly motivated for one reason or another. It is a needy, but discerning bunch, with few quality homes available for them to purchase.
It really is clear that healthy inventory is the key for our near-term market performance. If enough inventory appears, it will satiate the current buyer pool and level out prices, which in turn will bring more buyers into the market. The good homes that have hit the market in January and February have sold quickly for the most part. When polling colleagues and service providers (stagers, transaction coordinators, etc.) about upcoming listings, most are running well below last year’s levels. It is anyone’s guess if the inventory will happen.
If all things remain the same, overall activity and sales volume will be greatly reduced this Spring. Prices should hold steady for good offerings. Lesser offerings, or poorly priced ones, will get bid down or languish. If we get a good push of inventory, then I expect sales volume to pick up and the median price of homes to be flat to slightly down.
In closing, I wanted to mention that it is essential to be adaptable in a market climate like the present. Adaptability means having the ways and means to achieve your goals regardless of the circumstances. Being equipped with experience and foresight at moments like these is essential and the agent you choose to work with can make a huge impact on the results your garner.
As always, reach out anytime to discuss your needs, the market in general, or anything that is on your mind!.
Cheers,
Jon
