According to the California Association of Realtors, home sales in the state edged up in January for a second straight month. Existing home sales are up 0.04% from December, but down 45.7% from January 2022.
“Thanks to slightly waning interest rates and tempering home prices, California’s housing market kicked off the new year with another step up and continued to improve in January as buyers gained more confidence in purchasing a home and the affordability outlook improved slightly,” said Jennifer Brancini, president of the California Association of Realtors. “While the monthly sales gains have been nominal over the past two months, the market is moving in the right direction.”
Locally, we are seeing the housing market follow a similar pattern. Inventory is still constrained, but trending up slightly as we head into the spring market.
“The market has certainly made a bend in the last couple of weeks. We haven’t seen this many buyers out in at least four months,” said Michelle Perry, president-elect of the Santa Clara County Association of Realtors. “Certain areas around Santa Clara County have seen as many as 50 people or more go through open houses.”
Location and condition will always be key, Perry said.
“Many homes are seeing multiple offers. It’s nice to see a good healthy market again,” Perry said. “I have been beaten out of the last three offers I submitted. One in San Jose, One in Hollister and one in Discovery Bay. So it’s not just Santa Clara County, it’s going on everywhere. All three of these homes received over-asking offers.”
William Chea, president of the Santa Clara County Association of Realtors, is also fairly optimistic about the spring housing market based on his experiences.
“Agents’ phones are ringing again and the buyers that I chat with feel it’s a great time to make a move with housing prices and interest rates stabilizing,” he said.
Traditionally, the market generally starts to pick up after the NFL Super Bowl. There typically is more inventory to choose from and just simply more interest in making a move. However, this year is anything but typical. The economic indicators continue to be strong despite the Federal Reserve’s best efforts to cool down the economy with rate hikes. We are literally in a “good news is bad news” scenario for interest rates.
Housing prices have definitely stabilized due to inventory constraints. Part of the issue is so many of our potential step-up buyers were able to lock themselves into historical low rates, making them less likely to move even though the interest rates of today are more in line with historical norms. This means far less “cash” offers in this market than last spring when housing prices were appreciated at astronomical rates. It also means sellers are more open to a wider variety of financing options. Many of our members are getting their clients into housing with as little as a 3% downpayment.
This market is actually experiencing an uptick in first-time home buyers that have been sitting on the fence for a while. Be careful with sensational headlines. The traditional media is usually dealing with data that is several weeks old. In this rapidly shifting market your best source for the most up-to-date market information is always your local Realtor.
San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. His column appears every fourth Thursday of the month. Contact Neil at [email protected] or follow @neilvcollins on Twitter.
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