2019: A Look Behind, A Look Ahead
If I had to describe this past year's real estate market in one word, it would be uncertainty. After five years of staggering appreciation and white-hot competition, a modicum of rationality returned. The fear of an impending recession caused many buyers to hesitate, and many sellers to overprice.
But 2019 has not been slow, and as I explained in this recent article, 2020 will continue to be a robust real estate market in the Bay Area. In fact, the return of rationality, and some fortunate environmental factors, have created great opportunities for savvy buyers and sellers. A few takeaways from this past year:
Mortgage rates have dropped over 1% since a year ago, vastly improving home affordability. (Saving ~$10,000/yr. on a median-priced home in Silicon Valley or SF.)
Median home prices are down across the Bay Area, but the real story lies in price segments. The luxury market (>$3M) has slowed considerably while the lower price segments continue to be quite competitive.
Well priced homes are selling quickly (about 3 weeks) at or over asking, but price reductions are becoming more common. Overpricing a home yields a lower average sales price than if the home had been well priced at the start.