When we analyze the state of the East Bay real estate market, it’s important to differentiate the past from the present. For example, the number of transactions in January and February dropped to its lowest point since the financial crisis of 2008. The general opinion is that many buyers and sellers took a break given the tumultuous job market, as well as the steady flow of atmospheric rivers.

 

But that changed in March: activity increased 55% month-over-month and median sale price increased 17%, matching 2021 prices (they were down 11% compared to 2022).

 

This increased activity is revealing a bifurcation in the market.

 

• One line is drawn by price: In Q1, the lower end of the market ($1M or below) saw little competition as these homes sold at asking; the “upper middle” of the market ($1.5M-$2M) was most competitive as these homes sold an average of 20% over list price; and the upper end ($2M+) sold 13% over list.
  
  
  

• The other line is drawn by days on market of inventory: older listings are sitting but newer listings are selling. Looking only at active listings in April, 45% of homes have been on the market for 5 weeks or more, but these homes make up only 21% of new contracts. Sellers with older listings can address this issue by taking a price reduction: 57% of homes that have been on the market for 5+ weeks and get into contract are those that lowered their price.

On a whole, as the spring market heats up, there is simply not enough inventory to meet demand. The number of new listings for this time of year is near an all-time low (since Red Oak began tracking in 2011) yet new contracts are on an upswing despite the limited supply.

 

And looking only at Red Oak transactions that ratified in April, key metrics are strong for sellers: average price is equal to 2022 levels, homes are selling an average of 11% over asking and attracting an average of 3.5 offers, which points to an increasingly strong overall market. (Activity appears to be much stronger for homes that sold above $1M: 41% attracted 6 or more offers, and 33% sold 31% or more over asking.)

 

Market trends can shift week to week. Reach out if you’d like some help navigating these waters.