The Market May Be Heading for a Cooldown
We recently analyzed the East Bay’s second quarter stats, and they show us that the area’s once-blazing rate of house value appreciation is slowing.
Median single-family home prices rose just 4 percent from the second quarter 2018 to the same period this year. That’s down quite a bit from the 18 percent and 10 percent year-over-year second quarter jump in prices in 2018 and 2017, respectively.
The median price of single-family Inner East Bay homes fell 18 percent from June 2018 to June 2019. Source: Red Oak Realty analysis of MLS data.
In addition, the number of homes sold in June dropped 18 percent from June 2018. This is not due to a lack of inventory -- but to homes languishing on the market longer than they have in years past.
Average days on market, too, suggest a slowing market. Normally, we would expect an average of 28 days on market for East Bay homes. In the second quarter, we saw an average of 32 days, which is fairly high relative to recent years’ numbers.
This means that on-the-fence sellers may want to reach out to an agent to get a professional assessment on whether they should list now while the market may be still on the upswing. Every case is different, which is why talking to a professional is wise.
In 2019 through mid-July, 40 percent of active listings have been on the market for five weeks or longer. The same time last year it was 32 percent.
What This Means
We don’t know yet, but we think that East Bay buyers may be reaching their home price ceiling, after years of appreciation. If the pricing trend continues, we expect that prices may even drop year over year in the near future.
This is something we’re watching. Third quarter numbers will tell us more, and we’ll share what they say with you.
Red Oak Realty maintains a proprietary set of neighborhood-specific data. The list-to-sale-price ratios shown above reveal which East Bay neighborhoods had the hottest real estate markets in the second quarter. Source: Red Oak Realty analysis of MLS data.
