February Tri-Valley Market Report
In Compass’ February Tri-Valley Market Report, we see that 2022 Begins with Mixed Economic Indicators. Read on to learn more about the state of the housing market in East Bay, CA.
2021 was one of the most frenzied real estate markets ever, with buyer demand far exceeding the supply of listings available to buy – and all the usual indicators, including home price appreciation trends, reflected this sever imbalance As is the normal seasonal trend, listing and offer activity dropped substantially mid-November through early January, resulting in very low sales volume in the year’s first month.
As of 2/3/22, mortgage interest rates have risen 14% in 2022, putting them 34% above the low 1 year ago. Inflation is at a 40-year high, and the Fed plans to make major changes to its interest-rate policies and its interventions in the economy generally. Consumer confidence has been dropping, and financial markets have seen considerable turbulence in the new year. Geopolitical risks of major-power conflict appear to be rising.
In the Bay Area, real estate market indicators remain very strong: demand for the homes still very high, inventory extremely low. So far, buyers do not seem to be significantly rattled by stock market gyrations, and increasing interest rates may be motivating some to buy sooner than later. As the new year wakes up, a common dynamic in heated markets is for buyers to jump back in much faster than sellers: Demand outpaces supply right from the start, with all the usual results (multiple offers, overbidding, fast sales), even as the number of new listings starts climbing. This describes 2022 to date, but more will be known once the spring selling season – typically the biggest of the year – really gets underway. (In the Bay Area, the “spring” market can begin in February.)
As an aside: Compared to the general market, luxury home buyers tend to be less sensitive to interest rate movements, but more sensitive to turbulence and uncertainty in financial markets. To research further, please visit https://www.bayareamarketreports.com/trend/tri-valley-real-estate-market-report
Inventory is still tight, but working with the right realtor will make all the difference. I would love to take your call and discuss your future real estate endeavors!