Recap of Q3 Housing: What's Next?

Compared to the last 3 years, this year's Q3 concluded with a record-breaking $1.9mill average sales price in Santa Clara County. And yes, this was still achieved with higher mortgage interest rates than what it was 3 years ago.

How is this possible?  Big tech stock prices are doing well which is huge, but the big answer is low inventory!

While the sales transactions did increase 15% from last year Q3, we are still down by 37% compared from 3 years ago.

It's obvious that Bay Area sellers aren't motivated to sell their homes. Everyone talks about residents moving out of the Bay Area, but the numbers show that they ain't selling their homes when they do move!  Most of those moving out must be renters one would think.  At last, with rate cuts now entering the picture, this could change. If mortgage rates fall somewhere between mid-4 % to low 5% for 30-year fixed, I anticipate more sellers will welcome the idea of selling their homes (this would make the transition to purchasing a replacement home more palatable). This should ease the inventory constraint for buyers.

 

Those who already own a home can also be on their happy way to a refinance. However, when one side of the scale tips, something has to give. If rates do indeed come down, I also project we will be seeing higher sales prices than we are now.  Assuming the employment and stock market remain stabilized, sideline "watchers" of the past 1-2 years will enter the market aggressively in the next year. Why? Because these buyers have learned that rates never went back to 3% or less and it most likely never will.

With that being said, don't try to time the market. Get yourself educated and get all of your ducks in a row now. Roaming around open houses by yourself or working with an unqualified realtor could cost you a lot of time and a few extra hundred thousand dollars. Which would be a bummer.  Let me know how I can help!