On Friday, April 27th, the Wall Street Journal’s Nick Timiraos headlined that “Stunned Home Buyers Find the Bidding Wars are Back”. In his article he notes that on a national level the market is balanced “when there is a six-month supply of homes for sale.” Nationally that figure now stands at 6.3 months.
As usually happens the San Francisco Bay Area finds itself with even higher competition for homes with an overall time frame of just 3.4 months of inventory. Central Contra Costa County, including Walnut Creek, Danville, Lafayette, Orinda and Alamo, has less than 1.5 months of inventory based on the current number of detached homes for sale (698) vs the number closed sales in the last 30 days (467). When I look for trends I also check the pending sales and for that same period there were a whopping 564 … barely a 37 day supply!
Most listings in our office are seeing 10 to 17 offers on them within the first several days. Good news for sellers who are often ending up with sales over full price. Not so good news for those buyers who expected to be able to buy from a never ending list of premium properties.
What’s next? Expect this market to continue. There will be some increase in inventory if history repeats itself because most sellers finally get moving by May. And that “hidden inventory” the banks control may start to appear on the market, but don’t expect those homes to have any fewer offers. There is simply too much pent up demand.
Remember, however, that prices here in the Central County are almost exactly where they were in the spring of 2003 … and interest rates are at 4% now vs 5.75% in 2003. That difference in interest rate will get you 21% more home today than in 2003.
Now may be the right time to jump into the market and get the home you want.