11/28/2023 0 Comments Bay area housing bubble 2021![]() Sellers will start to be more realistic and lower their listing prices, and bidders will meet those prices or go slightly above them, she said. “The Bay Area needs a recalibration of prices and seller expectations.” “I think we’re probably close to the bottom, and I expect it to flatten out and maybe recover by summer or maybe next year,” she said. The housing market will eventually recover, she said, because the Bay Area is still a desirable place to live. ![]() However, Fairweather doesn’t think the ratio will continue falling much more, and will likely be more in line with the rest of the country. Many neighborhoods in San Francisco logged the biggest declines in the period, which experts said is because the city is so expensive to begin with, and with higher mortgage rates, more and more potential buyers are being priced out. The Bay Area has led the recent nationwide housing market downturn, with home values declining in a majority of the region from June to December 2022, according to data from Zillow. It has declined ever since, last at 98.1% in December. The average nationwide sale-to-list percentage has been below 100% a majority of the period from early 2012 to present, surpassing the mark only during the pandemic from March 2021 to July 2022. The metro had fallen under 100% multiple times since 2012, at the beginning and end of 2019, and in February 2012. The San Jose metro, which includes Santa Clara and San Benito counties, dipped below the key benchmark even earlier, reaching 99.9% in August 2022. When I moved back to the Bay Area in 1999, we bought a house during the Dotcom boom. The Oakland metro, which includes Alameda and Contra Costa counties, had a sale-to-list percentage of 99.7% in December, after last dipping below 100% in April 2012. Now, with 30-year mortgage rates above 6% since September 2022, demand has gone down as many buyers are priced out of the Bay Area market, unable to reckon with both the big down payment on a costly home and a sizable monthly mortgage, Fairweather explained. As mortgage rates reached rock bottom during the pandemic, home buyers took advantage, sparking the home-buying frenzy.īut at the same time, many residents left the Bay Area because remote work enabled them to no longer be tethered to expensive cities. If it’s less than 100%, the home sold for less than the list price.ĭuring the pandemic, after reaching a low of 101.4% in January 2021, the sale-to-list percentage peaked at 111.6% in April 2022 before descending sharply to the current low of 99.2%ĭaryl Fairweather, Redfin’s chief economist, said the Bay Area was the hottest pre-pandemic housing market in the country with the fastest price growth. If it’s above 100%, the home sold for more than the list price. The sale-to-list ratio is the final sale price divided by the last list price, expressed as a percentage. It was the first time that metric has dropped below 100% since February 2012, which is as far back as Redfin’s data goes. The latest data shows the average sale-to-list percentage in the San Francisco metro area, which also includes San Mateo County, was 99.2% in December. ZIP code where home prices have declined the most since July
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