The East Bay’s housing market looks like it’s headed for a competitive free-for-all this year as a low supply of homes for sale has had droves of buyers bidding up prices so far. If you or someone you know is thinking of selling their home this year, they should talk to their real estate professional and see if now is the best time to list their home. We think it is and here’s why…
We’ve been grappling with low inventory for the past several years now. Still to be seen is whether high prices will finally lure sellers off the fence, and, if not, whether prices will continue to rise. Other constraints on sales include tough loan requirements and affordability. For many buyers, the prices may have finally gone beyond their reach.
If you look at the graph below, representing a combined Alameda and Contra Costa Counties, you’ll see we’re currently sitting on approximately 1.7 months of inventory, but double what where was at the start of the year.
Here are the general rules of thumb for buyer and seller markets:
Buyer’s market: more than 6 months of inventory based on closed sales
Seller’s market: less than 3 months of inventory based on closed sales
Neutral market: 3 – 6 months of inventory based on closed sales
Why wait until additional homes hit the market as Spring comes and we reach that tipping point where it is no longer a Seller’s market? Demand is strong. There isn’t localized buyer foot traffic data available and the national data is skewed by the horrible weather they’ve been having back east. But most Agents will tell you that buyer is demand is strong and much higher than this time last year. Mortgage rates? They’re still very low but been increasing over the last several months.
We really don’t see what is to be gained by waiting to list if this is the year to sell. Inventory = low. Demand = high. Prices = high. Mortgage Rates = low. That’s the equivalent of four aces and I’d take that hand every time…