With the East Bay real estate market still dormant from a holiday hangover and drizzly weather, the market's trajectory, and some projections, suggest that 2020 will be a softer market than 2019.

 

Signals pointing to this include a multi-year slowing of East Bay home price appreciation, the general housing disturbance that accompanies a U.S. presidential election year and some experts forecasting a dampened San Francisco housing market.

 

This suggests that East Bay real estate demand in 2020 will be lower than 2019, potentially giving East Bay homebuyers a leg up with less competition and prices that don’t soar as high over asking.

 

 

East Bay homes have rewarded owners with steady, healthy appreciation in recent years. However, data shows that as East Bay home prices sit at a median of $860,000 in November 2019, they may be approaching a ceiling.

 

In the wake of the housing recovery, East Bay single-family home median sale prices jumped a whopping 43 percent from 2012 to 2013, according to Red Oak Realty analysis of MLS data.

 

Median sale prices have continued annual jumps since, but have steadily shrunk each of the last three years: 10 percent in 2017, 7 percent in 2018 and 6 percent in 2019.

 

 

Source: Red Oak Realty analysis of MLS data.

 

Each year from 2013 to 2019, the data shows an annual stair-step decrease with one notable exception: 2016, the last U.S. presidential election year (see graph).

 

Presidential elections tend to have that effect on the real estate market -- prices and demand soften as people’s attention drift to the election and some wait to act after the nation chooses a new president.

 

As the area’s economic engine, San Francisco has a big influence on the East Bay housing market. A Zillow study published on January 1 predicts that San Francisco will have the coolest housing market in 2020 among 25 large markets it analyzed.

 

Our staff and agents have been debating the article, which surveyed 100 U.S. economists about their outlook on real estate markets across the nation. Over half of the surveyed experts (57.1 percent) expect San Francisco home values to fall in 2020, a higher percentage than any other metro.

 

Despite this outlook, the East Bay showed steady demand throughout 2019. Only time, and data, will tell for sure if this will drop in 2020.

 

We won’t know for sure how the 2020 market will shape up until the spring selling season really starts picking up in March. (For more on East Bay real estate seasonality, see this post.)

 

The five core metrics that show where the market will head include:

 

• Number of sales

• Median sales price

• Average price per square foot

• Average percent of price over asking

• Average days on market

 

In the meantime, we track qualitative feedback from weekly meetings with our over 160 agents throughout the East Bay and we’ll spotlight any remarkable trends in real time on this blog.

 

For example, we’ll know the market is truly softening if we see a number of great listings lingering on the market for longer than anticipated.