A “buyer’s market” occurs when the number of homes on the market exceeds the number of interested buyers. As the United States faces more economic uncertainty, many wonders when we will have the next buyer’s market in East Bay Real Estate. Here are the top signs to watch for that could indicate a buyer’s market.
Sign #1. Home Prices Appreciating at a Lower Rate
In a seller’s market, home prices tend to rise, while in a buyer’s market, prices will either remain flat or decrease. Consider April 2022 single-family home sales stats from the American Institute for Economic Research:
- Nationwide sales of new single-family homes declined 16.6% in one month, from 709,000 in March to 591,000 in April.
- New home sales have steadily declined month over month in 2022: March new home sales declined 10.5%, February saw a 4.7% drop and January’s decline was 1.0%.
- Total inventory of new single-family homes for sale rose to 444,000 in April, an increase of 8.3% from the previous month.
Even though sales of new single-family homes declined, the median sales price for those homes increased: :
- Median sale prices across the United States for new single-family homes in April rose to $450,600, up from $435,000.
- In April, California’s median home prices increased to $884,890, an all-time high.
Note: Home prices are not included in inflation calculations but have a direct impact on various housing-related costs such as rent. These costs are included in the Consumer Price Index (CPI), and account for 40% of the core CPI.
Sign #2. East Bay Real Estate Inventory Exceeds Demand
An increase in inventories indicates a shift to a buyer’s market. In January 2022, total housing inventory in the United States decreased to 860,000, a new all-time low. In April 2022, the total housing inventory increased to 1,030,000.
In California, the following cities reported the following housing inventory data:
Los Angeles
- Housing inventories: In February 2022, housing inventories were 3590, compared to 6119 homes available in February 2021.
- Home sales: February 2022 home sales were 1877 compared to 2063 in February 2021. In February 2020 home sales were 1630.
- New listings: New home listings dropped 15% in February 2022 to 2416 from 2021 numbers of 2842.
- Number of days on the market: In February 2021, the average number of days a home for sale spent on the market was 50 days. In February 2022 it dropped to 36 days.
San Francisco
- Home prices: Home prices increased 10% in February 2022 to $1,485,000 from $1,350,000 in February 2021.
- Housing inventories: In February 2022, available homes for sale was 821, down over 30% from 1177 homes in February 2021.
- Home sales: Home sales were pretty much the same compared to 2021, with 408 sales in February 2021 and 409 sales in 2022.
- Number of days on market: In February 2021, the average number of days a house was on the market was 44 days. In February 2022 the average number of days dropped to 17.
Sacramento
- Home prices: Median home sales increased by 14.8% from $425,000 in February 2021 to $488,000 in February 2022.
- Housing inventories: Housing inventories in 2022 were 413 in February, down from 490 in 2021.
- New listings: In February 2021, new listings were 679 and rose to 713 in February 2022.
San Diego
- Home prices: In February 2021, San Diego home prices were $705,000. In February 2022 they increased 17.2% to $826,000
- Housing inventories: In February 2021, housing inventories saw 1,223 homes listed, with February 2022 home listings reduced to 669 homes, a 45% reduction.
- Number of days on market: The number of days homes were for sale in February 2021 was 15 days. In February 2022 houses were on the market for 8 days.
An increase in foreclosures could potentially signal a buyer’s market as well. A January, 2022 Foreclosure Marketing Report from Attom reports a total of 23,204 U.S. properties with foreclosure filings — default notices, scheduled auctions, or bank repossessions — up 29% percent from a month ago and 139% from a year ago.
Sing #3. Homes Stay on the Market Longer
The longer it takes to sell a home is an indication of slowing demand. First American Financial Corporation released the following May 2020 data:
- Potential existing-home sales. A 2.0% month over month seasonally adjusted decrease (SAAR) to 5.62 million
- Existing home sales market potential. Fell 10.5% (660,395 SAAR) compared to a year ago
- Potential existing home sales. Currently at 1,171,000 (SAAR), which is 17.2% below pre-recession levels in 2006
Summary
Many East Bay Real Estate experts believe we are on the verge of a buyer’s market in real estate. While it may be difficult to predict exactly when a buyer’s market will occur, carefully watching for these key signals could help determine when the East Bay Real Estate seller’s market ends and the buyer’s market begins.
At Range Homes, we pride ourselves on our ability to work with sellers to understand exactly what you want and to be transparent as to what is happening in the market and therefore what is achievable. Often sellers can be disillusioned by agents with big promises and no delivery. You won’t get that with us. Our agents are hardworking, passionate, and honest.
Want to Know More About East Bay Real Estate?
While other states and territories have experienced a decline in housing prices the East Bay real estate, in general, has remained strong. This doesn’t mean you should not diversify your portfolio across many states, but our East Bay CA Realtors agree that this is certainly a strong place to start for a novice investor. There are even some great low-cost homes that are ripe for renovation.
We have a team of friendly, helpful East Bay Realtors that specialize in East Bay real estate and property sales that can help you work out how to best get your property portfolio started. Our agents are here to put your needs first, get you the best deals and offers, help you buy or sell your dream home and build your investment portfolio. Reach out to our team today to find out your options.
If you are looking to find an East Bay Realtor, or looking for homes for sale in East Bay CA, or even to sell your home with someone who will make sure you get the best deal and understand your needs – look no further – when you work with us, consider yourself family.
