Figure The Future Out Now

Should I Buy or Sell? One way to figure out if it’s a good time to sell or buy a home is look at the current trends on what is selling and for how much. First, the lowest mortgage rates in 5 months boosted home sales above the 250,000-unit annualized sales pace for the first time in 4 months. February’s sales pace was up 17.6% from January at 284,010 (as seen on the graph). Despite the third straight monthly improvement, sales of single-family homes remained below the 300,000-unit pace for the fifth consecutive month. Median sold prices slid in the SF Bay Area by 13% in 6 counties. Reasons for the slide: This number seems drastic, but here in the SF Bay Area we found 2022 home sold prices were dramatically high due to historically low interest rates (3%), low inventory and a robust economy. For example, in 2022, 4 of the 6 SF Bay Area counties had sold price increases (year over year) of 10% in February. Logical to the stats are that such dramatic high prices could come down to a more historical sold sales price average. The Economy: Another factor for overall slower sales numbers is the uncertainty in the tech sector which drives a good portion of the local economy. The other stats in the graph show supply or homes for sale is down and not shown in the graph is the statewide unsold inventory index (UII) grew from 2 months in February 2022 to 3.2 months in February 2023. Some conclusions: finding a good priced first, second or investment home (with rents holding steady or slightly increasing) at a better interest rate (until the Fed decides to tighten inflation more) is attractive and February’s sold statistics show many buyers have been doing this. What’s available for sale is tight and not expected to improve any time in the next few months. A Future Projection: as soon as interest rates stabilize, “bottom” sold sales prices will start to increase, and if existing inventory doesn’t improve, we may be back at over-bidding since the SF Bay Area is a very desirable place to live.