Gina Piper September 7, 2023
Rates continue to increase as the FED’s inflation policy and statements remain aggressive, with more rate hikes likely. Despite the current rates being at their highest level since 2001, there is still a strong buyer demand, and our local property values are projected to continue to increase at least through 2024. The stubbornly low inventory levels are driving the value increases as the demand far outpaces the available inventory. The ultra-low inventory levels are not expected to improve in the near future for many reasons, including potential sellers being “rate-locked.” With more than half of existing mortgages currently under 4% and more than 85% under 5%, very few sellers are willing to sell their homes and give up their existing rates. This explains why the vast majority of sellers in our market fall into one of three categories:
This is not necessarily true for all Bay Area markets, as many buyers moving into the East Bay are selling their homes in the South Bay and relocating here for the great schools and convenient commute location.
Despite the healthy demand and low inventory levels, it is essential to price a home correctly, as buyers are well aware of the recent market activity and not willing to overpay for a home. Homes priced correctly (not overpriced) are selling quickly, often with multiple offers. On the other hand, overpriced homes sit on the market for extended periods before selling, usually after one or more price reductions.
I expect the current conditions to continue through the rest of the year and likely throughout a good portion of 2024, when rates may decrease to the point that some of those rate-locked sellers are willing to move.
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1200 Wetmore Rd, Livermore, CA 94550
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