The real estate market was challenging last year with so many changes and variables. The data shows this year will likely be more steady for buyer and seller expectations.
2023 reflected the lowest volume of home sales in the past fifteen years, but this was to be expected from the data I reviewed in a similar newsletter a year ago. A very important metric to understand is that 90% of homeowners with a mortgage are have an interest rate below 6%. This means these owners refinanced or purchased homes when rates were low and have no plans to make a lateral move anytime soon. The decrease in volume is because of higher interest rates and buyers that were compelled to buy while prices were stagnant and often no longer wanted to rent.
The monthly homes sales data is very encouraging because it shows that 2023 shifted back to more traditional monthly sales metrics with higher sales volume in springtime. 2022 monthly sales were directly correlated with a sharp rise in interest rates leading to predictably lower monthly volume by the end of the year.
Inventory nationally has slowly crept up as interest rates decreased and stabilized in recent months. The Bay Area has experienced proportionally less new listings and inventory availability compared to national averages but I am seeing a shift towards more listings in certain areas even this month. Expect to see more homes on the market in most areas the next few months leading into summer.
Dean Powell
Keller Williams Realty Danville
CA DRE # 02108792
925-765-8584