My last newsletter and market update were sent out in late May when I mentioned that we were beginning to see signs of the market changing as indicated by fewer showings, slower open houses, longer marketing times, fewer offers and increasing inventories. Fast forward to today and we are still seeing the same conditions in today’s market as it continues to normalize after several years of craziness that was further exacerbated by Covid. Overall showings are down, and interestingly, private showings of my listings are almost non-existent with the vast majority of showings now taking place at open houses. This is a big change from just a few months ago when showings were closer to 50/50 between private showings and open houses. Open house traffic has slowed down, but not dramatically, as a result of this new trend in showings. Multiple, over asking price offers are no longer the norm for listings and we are seeing a lot of price reductions and homes closing for less than their asking prices. The market has become much more buyer friendly as inventory levels have increased to much healthier levels. All of this has resulted in what I would estimate to be a 10-20% correction in values, depending on the price range, individual neighborhoods and other factors.
Here’s a comparison of today’s active inventory levels as compared to active inventory levels at this time last year:
Pleasanton: 121 (+20) – Dublin: 126 (+32) – Livermore: 173 (+56)
San Ramon: 156 (+56) – Danville: 120 (+27) – Alamo: 44 (+20)
Rates have been very volatile, but seem to have settled in at close to 5% for a jumbo 30-year fixed and in the high 5% range for a conforming 30-year fixed. I expect that the volatility will continue as the economy struggles with out of control inflation, which is forcing the Fed to continue with aggressive rate hikes. Some people in the financial world are speculating that the FED will overshoot with the rate hikes thus causing too much of a slowdown and be forced to reverse course with their rate hikes sometime in 2023, which could give people purchasing homes today a window to refinance into lower rates. Given the 2nd quarter of negative GDP being reported last week along with some other less than optimal financial reports, this sounds like a plausible scenario. Stay tuned and buckle your seatbelt!