July 1, 2022 | Sexton Real Estate Group
The Bay Area housing market has been notoriously hot in recent years, with prices skyrocketing and bidding wars becoming the norm. But recently there have been some signs that the market is starting to cool down. So, how can you tell if the Bay Area housing market is cooling? Let’s take a look!
High Mortgage Interest Rates
When people are buying expensive homes in the Bay Area, they are often taking out mortgages with interest rates that are quite high. This can be a sign that the market is cooling off, as people are not willing to pay as much for a home when they have to pay more in interest. Additionally, if you see mortgage rates going up while home prices stay the same or even drop, this is another sign that the market may be cooling.
Of course, there are other factors that can affect mortgage interest rates besides the health of the housing market. The overall economy plays a role, as do interest rates set by the Federal Reserve. However, if you see mortgage rates rising while home prices stay flat or drop, it’s a good indication that the market is cooling off.
The Number Of Homes For Sale On The Market Is Rising
In addition to high mortgage interest rates, there are a few other signs that the Bay Area housing market may be cooling. One is an increase in the number of homes on the market. If there are more homes for sale than there were previously, it means that sellers are having a harder time finding buyers. Additionally, if you see prices dropping or homes staying on the market for longer periods of time, these are both signs that the market may be cooling.
Of course, it’s important to remember that the Bay Area housing market is notoriously volatile. So even if you see some of these signs, it doesn’t necessarily mean that the market is cooling off. However, if you see a combination of these factors, it’s a good indication that the market may be heading for a slowdown.
Median Sales Price Is Increasing
The San Francisco Bay Area housing market has been on fire for the past few years. Prices have soared to record highs, and there has been no end in sight. However, in the last few months, there have been some indications that the market may be cooling off.
One of the most obvious indicators is the median sales price. In July 2018, the median sales price for a home in the Bay Area was $935,000. This is a significant increase from the $892,500 median sales price in June 2018. However, it is still below the all-time high of $1,000,000 set in May 2018.
Recently, single-family house median sales price in the Bay Area climbed by 13%. In April, the median price in Santa Clara County was $1.8 million, a 23 percent increase over the previous year. With a 20% rise, Alameda County wasn’t far behind.
Not Many People Are Bidding Or Making Offers
When the housing market is cooling, there are fewer people bidding on homes or making offers. If you’re in the market for a home in the Bay Area, you may have noticed that there are fewer homes being sold and fewer people making offers. This could be an indication that the market is cooling down.
Of course, there could be other reasons why there are fewer people bidding on homes or making offers. It could be that there are simply fewer homes available for sale. But if you’re seeing homes sitting on the market for longer periods of time, or if prices seem to be dropping, it’s a good idea to pay attention to these trends. They could be an indication that the Bay Area housing market is cooling down.
Sellers Are Removing Their Properties Off The Market
The cooling of the Bay Area housing market may be more apparent to sellers than buyers. A study recently released by Zillow shows that the number of homes for sale in the San Francisco metro area has increased sharply in recent months, while the number of homes sold has declined.
In the fourth quarter of 2018, there were 22 percent fewer sales than a year earlier, while the number of listings was up 36 percent. The trend continued into 2019, with a 9 percent drop in sales and a 28 percent increase in listings from a year earlier.
Notably, these changes come after years of very tight housing inventory and record-breaking home prices in the region.
This cooling off of the market may be due to a combination of factors, including unfavorable conditions for sellers, such as high taxes, increased regulation, and the threat of an economic downturn. It could also be that buyers have simply reached their limit on what they’re willing to pay for a home in the Bay Area.
Whatever the reasons, if you’re thinking of buying or selling a home in the Bay Area, it’s worth paying attention to these trends.
The Bay Area housing market is cooling down, but it’s still a great time to buy or sell. If you’re thinking of making a move, now is the time to do it! Call us today and we can help you navigate these changing waters. Our agents are experts in the Bay Area market and will make sure that you get the best deal possible. Don’t wait – the market may not stay this way for long!
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