In the East Bay, the housing market is always experiencing high demand. Even as prices rise quickly in Alameda and Contra Costa Counties, coupled with mortgage rates near 20-year highs, demand is still strong. High demand and low, but rising inventory are driving the one again rapid home price appreciation in the East Bay. Housing prices typically work in a counterintuitive way. In a classic supply/demand problem, as supply falls and demand remains steady or increases, prices rise. Housing works a bit differently. In the first half of the year, new listings usually rise rapidly, far outpacing sales and causing overall inventory to rise from the winter lows. Demand also tends to rise in the first half of the year, and the increasing supply actually benefits the overall market because buyers can more easily find a home that suits their wants and needs. Finding the right home is far more valuable than feeling forced into a home that’s not right, so prices tend to rise in the first half of the year.
Year to date, single-family home prices have increased 24% in Alameda and 22% in Contra Costa. Sales and new listings fell from May to June, which is common this time of year. Inventory remains depressed but has experienced some growth this year, which has helped alleviate some excess demand. As buyer competition has ramped up and sellers are gaining negotiating power, sellers are receiving more of their listed price. In January 2023, the average seller received 95% of list price compared to 105% of list in June. Inventory will almost certainly remain historically low for the year, and the market will remain competitive in the third quarter. Expect sustained mild sales and low inventory because of the 2020-2022 buying boom.
As always, Arrive Real Estate Group remains committed to helping our clients achieve their current and future real estate goals. Our team of experienced professionals are happy to discuss 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.
