Four orange darts stick in a numbered target board against weathered gray wood.

East Bay Market Update: Competition is Fierce, But Why Are New Contracts Declining?

Four orange darts stick in a numbered target board against weathered gray wood.

East Bay Market Update: Competition is Fierce, But Why Are New Contracts Declining?

Blue home with a Red Oak Realty Coming Soon sign on a landscaped residential street.
 
After two years of the pandemic, the number of new listings is growing - right in time for the spring market. Open house traffic has remained high and stable and we broke a record for price over asking.
 
However, the number of new contracts fell for the past two weeks. Is this because buyers have more listings to consider before writing an offer, or is it because of the increase in mortgage rates (4.88% conforming, 5.25% high balance, 4.75% jumbo), inflation (7.9% in February), war and gas prices?
 
The number of new listings that come to market each week has been on the increase as we head into the spring market. This aligns with 2021 data as well as 2020 (until the pandemic, of course).
 
Line chart comparing weekly active and coming-soon single-unit listings in East Bay cities for 2020–2022.
 
The number of new contracts fell for the past two weeks. Is this a concern, or do buyers suddenly have more listings to review before writing an offer?
 
Line chart compares weekly new pending single-unit dwellings from 2019 to 2022; 2022 is 119, down 18% year over year.
 
The number of all active listings is 12% higher than the previous year, which means buyers now have more to choose from. However, there still isn't enough inventory to meet demand, with the number of active listings 20% lower than 2019.
 
Weekly active and pending single-unit dwelling inventory charts compare 2019–2022, with 2022 year-over-year annotations.
 
Looking only at Red Oak transactions by offer date, price is up versus last year (up 17% year-over-year) and price over asking is at an all-time high (previous high was 26% in spring of last year). The average number of offers is still high at 5.8, and while it is on the decline, this is consistent with previous years as more inventory hits the market.
 
Line chart comparing weekly sale prices, OLPSP, and offer counts for Red Oak transactions by year.
 
The number of offers written on Red Oak transactions remains high, with 72% receiving 6 or more.
 
Stacked bar chart of Red Oak transactions by offer count across 12 weeks in 2022.
 
It's too early to tell whether the decrease in contracts is something to be concerned about - we'll need more time and data. If you would like a more specific analysis of the market or have questions regarding real estate, please reach out.

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