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2023 Outlook - Part 1 - Home Sales And Prices

Every day I am being asked about the market and my thoughts on whether prices or inventory will go up or down in coming months or years. The good news is after much deliberation and analysis of the data we have available I can finally share my thoughts. Most of my analysis will pertain specifically to the Bay Area market and that is because our market has always been, and currently is, an anomaly that can sustain recessions and other national trends. Let's jump right into the charts and remember to reach out to me directly with any questions you may have about your situation or in general.

The long-term national trend over the last 30 years has held steady at a 4% average. We all know the reasons for the spikes in 2006 and 2021 were due to speculation and low interest rates respectively. What does the flattening of prices and the convergence of this trend line mean for 2023? For the Bay Area I think we are going to see a much more traditional market with homes priced transparently, longer days on market, less games and buyers that are more motivated than 2021. Expect prices to hold steady through the end of the year with negligible fluctuation and steady demand even past the summer months. What is driving the demand now even when there is uncertainty about the market? I can speak for my buyers and the fact that everyone is settling into the reality of current interest rates and pushing forward.

More national data suggests that prices should not be expected to drop anytime soon. The low inventory and listings with price drops are just as significant here at the local level as they are almost anywhere else. Everyone is keen to the fact that homes now are not only experiencing price drops, but often linger on the market endlessly as many sellers cannot accept they will not get the same sales price as their neighbor a year ago, at least not in 2023. I have already walked away from a handful of listing opportunities this year because the potential sellers were not realistic with their expectations, and honestly they did not have much motivation to sell in the first place. Motivation will be the theme of 2023 as those in the market will be buying and selling out of necessity, and not capitalizing on the previous high prices or low interest rates.

Is 2023 going to be the year you buy, sell or invest? I would love to help you answer that question. Reach out to me today and schedule a time to discuss your real estate goals.

Dean Powell

Keller Williams Realty Danville

CA DRE # 02108792



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