A: One of the major driving forces of the real estate market in recent years has been exceptionally strong demand with minimal inventory, but the Bay Area real estate market changed in 2019.
While we still have a very strong market, inventory has increased over the past year. Realistically priced properties continue to sell quickly and at strong prices. In 2020, with more inventory, both underpriced listings, when the seller is not willing to sell at the listed price, and overpriced listings may take longer to sell, and often only after price adjustments.
Our philosophy has been to carefully evaluate the potential sales price range of a property and advise the seller to list the property within that range and at a number acceptable to the seller. With careful premarketing preparation, aggressive marketing, and strong negotiation, most of our listings sell at or above that number and within a very short time.
This approach has been exceptionally effective for our sellers, who are invariably delighted with the outcome.
As always, predicting markets can be tricky. What seems to be a clear path today may not be quite as simple as the year progresses. Multiple factors can affect the market over any time period, including politics, stock market performance, interest rates and world events.
Nonetheless, given the Bay Area’s strong economic growth and overall desirability, we believe that 2020 will continue to be an excellent year, offering buyers more inventory to choose from and sellers strong buyer demand.
A: The market has been cooling lately. Properties are taking longer to sell and some sellers have had to reduce their prices. Some of it may be the seasonal autumn/winter slowdown.
Market fundamentals point to slower growth in 2020, depending on the neighborhood and property type. Interest rates will hover at historically low levels.
The supply of homes will stay low and demand will remain high. Bay Area compensation for select workers will continue to be strong.
Buyers: watch for opportunities, paying particular attention to properties that have been languishing on the market.
Do not expect prices to plummet, but you may be able to write a winning offer with more contingencies, or even contingent on the sale of your current home.
Sellers: accept that the market has shifted. Your home must shine above the competition. Employ “just right” pricing, within 2 to 3% of the true market price.
Pricing above market is deadly. Pricing below market may result in lowball offers. Do not expect multiple offers, but remember that all you need is one good buyer.
John Solaegui, Compass, 415-999-0673, [email protected].
A: According to the California Association of Realtors, low mortgage interest rates will continue to support the Bay Area’s housing market in 2020, but economic uncertainty and affordability issues could mute sales growth.
Overall, the median home price is predicated to increase approximately 2.5% in 2020, and that is following a projected 4.1% increase from last year, in 2019. The average for 30-year fixed mortgage interest rates will dip to 3.7% in 2020, down from 3.9% in 2019, and will remain low by historical standards.
We predict the overall market will be challenged by changing migration patterns as some buyers will search for more affordable housing markets, particularly by first time buyers, who are the hardest hit, moving out of state. In fact, according to the most recent Housing Market Study, nearly a third of those sellers who planned on repurchasing said that they will buy their next home in another state outside of California- the highest level since 2005. Older generations were more likely to buy outside of California.
In our very specific Marin market, we expect overall a slight decrease in the number of sales, continued low inventory, and prices increasing moderately. Buyers will continue to seek Marin’s excellent schools, and desirable quality of life.