Red Oak’s leadership team presented a webinar about the current state of the Inner East Bay real estate market on September 13, 2023. The team reviewed hyperlocal statistics covering supply and demand, changes in financing and the mortgage market, the state of insurance in California, listing prep best practices, and how these factors may affect buyers and sellers.

 

You can register and watch the full recording here. In the meantime, here are 3 top takeaways from the presentation:

 

The number of new listings that have come to market Jan-Aug is at its lowest level since Red Oak began tracking in 2011. As a result, year-to-date sales are at their lowest level since the local multiple listing service (MLS) went online in 1997.

 

 

However, buyers remain in fierce competition for the most attractive homes. In fact, homes that sell in the $2M-$3M range sell an average of 20% over list price.

 

 

Other discussion points included how buyers use contingencies in their offers (hint: they’re almost never used in transactions above $2M), and how the number of disclosure packets on a listing can help predict the number of offers.

 

Mortgage rates are in the 6-7% range. Although this may feel high, especially when compared to the record-low rates that were offered during the pandemic, they are roughly in line with historical averages. And they are significantly lower than the highs experienced in the 1980s.

 

If the Fed finds that the U.S. is headed towards a recession, they typically lower interest rates, which lowers mortgage rates. This may happen again in the coming months.

 

 

Sellers are able to generate competition for their listing when their house looks great: it’s move-in ready, priced right, and often in the most desirable areas. A critical way to put the best foot forward is to make improvements to the property before it goes on the market.

 

The cost of these improvements has increased dramatically over the past few years, given inflation and the higher cost of construction. Red Oak currently sees clients spending an average of $110,000 to improve a property, but clients have a wide range of budgets, and each scenario is optimized to deliver a 2.5x return on investment. In all cases, clients should work with their agents to understand the best way to move forward.

 

Be sure to capture all of the takeaways in the recording here, then reach out with any questions you may have.