Wheeeeeew! The past few weeks have been a roller coaster! Whatever the
stock market has been going through, that uncertainty has poured over to the real estate market. Yes, even in the Bay! So here's a quick update of what I've observed and questions I've been getting.
How's the interest rates?
10YR bond has been staying afloat at 4%, and at one point last week, it was breaching north of 4.5%. This means rates have not seen much decline or movement compared to what it was 2 months ago. Most major lenders such as Wells Fargo, Chase, Bank of America, etc. are offering between low 6% to mid 6% for 7, 10, and 15-year ARM. With some banking relationship establishment, you might be able to lock in high 5%. As for 30yr fixed, you can expect high mid 6% to low 7%.
How's the inventory?
The market was producing consistent inventory at the beginning of the year, up until early April. The
percentage of inventory in San Mateo, Santa Clara, and Alameda County remained relatively similar to last year. However, once tariffs became the main focus, I'm noticing a handful of sellers aren't as motivated. If there's no financial distress for them, sellers are totally fine with holding off their sales. Some even pulled their listing off the market and rented their property out instead. So while some houses have been sitting on the market more than 2-3 weeks, I wouldn't be surprised if we start to see a decline of inventory in the next 1-2 months until we get more clarity on the trade war.
"Should I underbid on every house?"
Maybe. Homes with setbacks such as bad location, poorly rated school, fixer upper, etc. might give you some leverage when it comes to negotiating your offer terms, especially homes that have been sitting on the market for over a month with little to no interest from the public. On the other hand, I made 2-3 offers over the past 2 weeks when the Dow Jones was tanking nearly 15%, and all of the offers were up against extremely competitive buyers. One of them had an all-cash offer of $ 2.25 mil with 7 days close, noncontingent! The common theme that all of these homes had was that they were all ready to move in conditions with good location/school. So I wouldn't put a blanket statement that every home should be underbid. Although there are opportunities out there if you're looking hard enough and know what to look for.
"Should I wait a bit longer for further decline?"
Sure! But know that possibilities are all speculation. It could go in your favor or it could go against. I always encourage my people to buy within their means so that the fluctuation of the market won't have much impact on them. In reality, you'll always feel more confident buying whenever you see the majority are buying. Unfortunately, that's where the excessive bidding war comes from. If owning a home is a necessity to you, wouldn't it be nice to buy it for a bit cheaper?
This turbulence will require some time to absolve. In the meantime, if you've been active, stay active as you may find a good deal! And if you're thinking of buying/selling, consult with a qualified realtor and see if now is the right time for you.
