October Market Update

As you can see in the chart above, inventory levels are decreasing as we quickly approach November and the holiday season. This decrease follows our typical pattern and will likely continue through the holidays and into January. The market remains somewhat stagnant, despite interest rates being at 12-month lows. Buyer activity has been surprisingly strong in terms of the number of showings and visitors to my open houses, but buyers seem very hesitant to pursue writing offers, as indicated by the increasing number of days homes are sitting on the market. The average number of days on the market in the Tri-Valley is currently 46 and has been increasing over the past few months. There are several factors that could be behind this hesitancy, including a tougher job market, higher-than-optimal interest rates, and recession fears, all of which are understandable.

This is not to say it is a bad time to sell a home. Homes are still selling, and some of them very quickly, with multiple offers. There is a lot less competition in our current market, and there are still plenty of buyers, albeit cautious ones. The two most important factors in selling a home successfully in this market are ensuring it shows at its absolute best and pricing it correctly. Most of today’s buyers are looking for turn-key homes and prefer not to do any work on them, so market preparation is of the utmost importance. Pricing is equally important, as overpricing a home will usually result in it sitting on the market for an extended period and selling for less than if it had been priced correctly to begin with.

After Friday’s lower than forecasted CPI inflation numbers, most people are expecting another rate cut this week at the Fed meeting. I think another 0.25% cut is already factored into the market and don’t expect rates to improve if they announce it. As we’ve seen in the past, Fed rate cuts don’t guarantee lower mortgage rates and can have the opposite effect, depending on the Fed’s comments and future guidance.

If history is a good indicator, our current market conditions are likely to continue for several months, until late February or early March, when we should see a pickup in listing activity for the spring selling season.