The Bay Area Market Update
Recent data from early 2023 suggests that buyers are starting to re-enter the market
If you’re thinking about buying or selling a home in the greater Bay Area, you may be interested in the latest data on market activity. According to early 2023 data, it seems that buyers are beginning to jump back into the market after a slow period at the end of 2022.
Typically, December is the month with the lowest level of deal-making activity, which leads to January usually posting the lowest number of closed sales. This is because sales typically close 3 to 6 weeks after going into contract. In the 11-county greater Bay Area, accepted-offer activity in December 2022 and closed sales volume in January 2023 hit their lowest monthly points in 14 to 15 years. San Francisco hit lower points in listings going into contract in January 2019 and, after the pandemic hit, in April 2020.
While it may seem counterintuitive to suggest that buyers are beginning to jump back into the market when the headlines say the exact opposite, it’s important to keep in mind that news and statistics are often about three months behind the current situation on the ground. For the most accurate information on the market, it’s best to speak to someone who has experience selling homes.
If you’re considering buying or selling a home, it may be worth reaching out to a professional who can offer insights into the current market trends and help you make an informed decision. At this time, it appears that buyers are beginning to show more interest in the market, which could mean that now is a good time to consider selling your home.
Of course, every situation is different, and what’s right for one person may not be right for another. That’s why it’s crucial to talk to someone who can help you understand your specific needs and circumstances. If you’re thinking about buying or selling a home, don’t hesitate to reach out to someone who can offer expert guidance and help you make the best decision for you and your family.
As we move into 2023, there are many indicators that the Bay Area real estate market is beginning to wake up after the holiday slowdown. Typically, the market begins to accelerate into spring after the long holiday period, but it seems that this year, the rebound may be more pronounced than usual.
One of the main drivers of this resurgence in the market is the significant drop in inflation and interest rates, as well as the fact that home prices are well down from their peak in the spring of 2022. The stock markets have also been performing well, with the S&P up 8% and the Nasdaq up 15% as of February 3rd, 2023, despite some volatility.
Additionally, there are early indications that buyer demand is rebounding, despite high-tech layoffs. Open house traffic has increased, more buyers are requesting listing disclosure packages, and there have been reports of multiple offers and overbidding of asking prices. While this is still anecdotal data, it suggests that buyer demand may be recovering after a slowdown in the second half of 2022.
A similar rebound occurred in mid-late summer 2022, but it quickly faded when positive economic developments went into reverse. Market activity slowed further through the rest of 2022. However, there are now considerable hopes for a more lasting economic recovery in 2023.
During the housing boom, which peaked in April/May 2022, buyers typically jumped back into the market much more quickly than sellers, creating an imbalance between supply and demand. Too few new listings compared to the number of motivated buyers sparked bidding wars, leading to considerable home price gains every spring.
It is still too early to conclude that a sustained recovery in market conditions is now underway and if it is, how quickly it will develop and its impact on prices in 2023. Many economic conditions remain challenging, and forecasts by economists and analysts vary widely. However, preliminary indicators are surprisingly positive, and the CEO of Compass recently stated his belief that Q4 2022 saw the bottom of the market.
The “spring market,” which can begin as early as February in the Bay Area, is typically the biggest selling season of the year, especially for luxury homes. More data regarding new listings coming on the market, listings going into contract, sales volumes, speed of sale, overbidding, and sales prices will soon become available.
It’s worth noting that most “hard” data in real estate is based on closed, recorded sales, which generally reflects deal-making activity in the previous month when offers were negotiated. January sales, which are the basis for many analyses in this report, mostly reflect the December 2022 market when new listing activity and buyer demand were typically at their lowest ebb in years. February and March listing and sales data will begin to reflect early 2023 conditions better.
Overall, while there are still challenges and uncertainties in the market, there are early signs of a rebound in buyer demand, which could have a significant impact on the market in the coming months. As always, it’s important to consult with a professional who can offer expert guidance and help you make the best decision for your specific needs and circumstances.