A REALTOR'S REFLECTION ON THE EAST BAY | July 2024
We’ve again witnessed remarkable resilience in the East Bay housing market during 2024's second quarter, with prices still approaching record highs. This surge, driven by a robust economy and employers pushing for a return to office, has significantly increased demand. And with a wave of new inventory or “catch-up” volume due to 2023’s super low activity when sellers and buyers chose to delay moving, 2024 brought our housing market back to life.
Buyer Behavior and Pricing Trends
Although over two-thirds of homes sold above their list price, on average fetching 7% over asking, the level of competition is less. Despite high interest rates, buyers are willing to pay premium prices with the median priced home in the East Bay at $1,617,000 - just 1% less than a year ago. Recent reductions in mortgage rates have been a welcome development for homebuyers. According to Freddie Mac, "Spring homebuyers received an unexpected windfall… , as mortgage rates fell below the seven percent threshold for the first time in over a month."
Inventory and Competition
Active listings have surged, indicating a significant increase in inventory compared to San Francisco, where the market has tightened - an East Bay trend found across all price categories, especially at the higher end. The increased inventory has been matched by buyer demand with most homes selling with multiple offers…. though far few than compared to years past. With the exception being in Oakland where competition dampened the last two months, particularly those areas more urban or further up in the hills - these neighborhoods experienced a notable decline in value. Buyers have found more homes to choose from resulting in a discount of nearly 20% of more. It’s been over 15 years, around the pit of 2008, when it last felt like a buyer’s market.
Macroeconomic Influences and Future Outlook
Despite Oakland’s tough times, the strong economic foundation found in the rest of the East Bay (perhaps because of Oakland's poor performance), combined with pent-up demand, positions the housing market for continued strength throughout 2024. Recent macroeconomic trends suggest potential interest rate relief later this year, which could further stimulate buyer activity if mortgage rates decline.
Overall, increased inventory, strong buyer demand over recent months, and potential interest rate relief are likely to drive continued home-buying and home-selling activity, which sets the stage for a vibrant housing market for the rest of 2024.
-Alex
