Here’s our July 2019 Update for your market area.
Any questions or needs, let us know.
RicRoc & Callista
Stock markets hit new peaks and interest rates hit multi-year lows. The market had its typical spring bounce in demand, but generally speaking, remained cooler than it was in the first half of 2018. Year-over-year home-price appreciation has basically disappeared for the time being, with prices stabilizing, more or less, at last year’s peak levels. However, luxury home sales hit a new high in Q2.
Median Home Sales PricesThe overall median house sales price for the region is very slightly lower – a difference not statistically significant – than the peak price reached in Q2 2018. This chart below looks at median home price changes in 3 area market segments by price range – markets that have relatively substantial numbers of sales on a quarterly basis. As one can see, they all fluctuate up and down quarterly, sometimes significantly, but have relatively parallel trend lines since 2015. (It is true that the Lafayette and Orinda markets are not the exact same, nor are the Walnut Creek and San Ramon markets, but their home values, appreciation rates, and general market statistics are typically very similar.) Longer term trends are much more meaningful than short-term fluctuations in median sales prices.
Average Dollar per Square Foot AnalysesMedian sales prices and average dollar per square foot values don’t necessarily move in lock step. If the median size of homes sold during a particular quarter goes down, then median sales prices will typically decline, but average dollar per square foot values will usually increase. And vice versa. All things being equal, smaller homes generally sell at a higher dollar per square foot. It is worth remembering that averages and medians are gross generalities bundling together an enormous variety of home sales.
Luxury Home SalesSales of homes selling for $2 million and above hit a new peak in sales volume in Q2, but in the $3 million+ segment, sales are a little below highs reached in 2018.
Selected Supply & Demand StatisticsAfter peaking during the big spring selling season, sales typically gradually decline toward the nadir in activity seen during the mid-winter holiday period.
Overpricing: Negative Effects for Sellers & Opportunities for BuyersWe performed longer-term analyses of the effects of overpricing – as indicated by the need for price reductions before the property sold – on every major market in the Bay Area and the results were uniformly similar. As would be expected, there were dramatic differences in the sales price to list price percentage and time on market before sale. But there were also very substantial differences in the average dollar per square value realized upon sale. So, overpricing lowers values for sellers – even in very hot markets – which also signifies opportunities for buyers who keep an eye out for price reductions and react accordingly.
Mortgage Interest Rate Trends