The housing market in the East Bay has been in a whirlwind for the past few years, and experts don’t expect much of a change when spring comes around. Lowered post-pandemic interest rates are …
The housing market in the East Bay has been in a whirlwind for the past few years, and experts don’t expect much of a change when spring comes around. Lowered post-pandemic interest rates are moving up, hovering around 6%, and inventory remains minimal.
“While sellers are still in a strong position, it will likely continue to be a very trying time for buyers,” said Paula Martel, broker and manager of Century 21 Topsail Realty.
Lofty prices and inventory continue to be key issues, but some challenges are coming from outside factors.
“What’s happening on a macroeconomic level can affect the real estate market,” said Cherry Arnold, sales associate, Mott & Chace Sotheby’s. “Will there be a recession? Will the Federal Reserve achieve their goal of a ‘soft landing’? Even supply chain issues can have an impact. With more instability comes more fluctuation,” she said. “And for higher- end buyers, more than interest rates, inflation and the stock market can have a strong impact on them as well.”
Inventory shortages existed pre-covid
While Covid has affected inventory and demand, the transition was already in the works even before the pandemic.
“Back before 2020, no matter the season, we were starting to see a drop in inventory, down to about half of what we had the year before,” said Martel. “While inventory was nowhere near as dry as it is now, buyers had to be very proactive, and we often saw several offers coming in very quickly.”
The numbers reflect buyers’ demands. According to Mott & Chace Sotheby’s 10-year trends for single-family sales, in Little Compton in 2022, the median sale price jumped to $875,000, up $345,000 from 2019, and in Westport, the median sale price was $672,000, up $185,000 from 2020.
Move-in condition matters
What has slowed down, according to Martel, is the sale of high-priced properties in need of extensive work.
“Prices are sometimes not reflective of improvements needing to be made. Consideration has to be made for costs that will need to be added to the acquisition price, and will that equate to a reasonable resale value if a year or two down the road it goes back on the market? Consumers do their homework, so these houses can sit for a while.”
What to expect …
In times like these, it’s more important than ever to work with a Realtor, said Martel. “For buyers, a licensed Realtor sees within minutes when homes are listed,” she said. “It can take up to half a day for them to be posted on popular real estate websites, and every minute counts.”
And for sellers, pricing is everything, so work closely with a Realtor to stick to appropriate, not aspirational, pricing, said Arnold. “Know the difference between the value of the property vs. what you would like to get for it. You have to be very smart and price where the property is going to attract buyers.”
What can sellers do? Be ready
Some sellers make the mistake of waiting too long to prep their home before putting it on the market, said Arnold. “Even if you’re not listing for a few months, now is not too soon to get everything ready, including decluttering and painting. Make use of the time so that inside and out, your home looks its absolute best.”
What can buyers do? Be prepared
While sellers are still in the driver’s seat, buyers are out there waiting their turn, educating themselves on the market and coming prepared to move quickly.
“Buyers will need to have all of their ducks in a row financially and be willing to consider things like removing contingencies from their offers in order to be considered,” said Martel.
Because in a hot market sometimes only one viewing is possible before bidding, virtual house tours have become invaluable. Potential buyers can visit again and again online, and with measurement tools available room by room, buyers come even more prepared. “I’ve had people walk into a house for the first time and say ‘we’ve already measured the dining room to see if our table fits’ or they’ve looked at floor plans beforehand virtually to see what modifications they would be able to make,” said Arnold. “This is a marketing tool I can’t live without as a Realtor,” she said.
As the weather warms up, hopes for the market remain sunny. “I’m optimistic that spring will bring more properties for sale,” said Martel. “But it still won’t be back to normal. Houses will still come on and then fly off the market, so buyers have to be savvy and more organized than ever.”
And when it comes to sellers, said Arnold: “In this shifting market, the importance of appropriate pricing and strategic marketing cannot be overstated.”