The Local Lowdown: November 2022

• The Bay Area’s housing market is cooling after a huge appreciation over the past two years.
• Sales and new listings are on the decline, which will reduce inventory as we head into winter.
• Months of Supply Inventory indicates that the market is trending toward more balance between buyers and sellers.

When we consider the increases in mortgage rates and normal seasonal trends this time of year, when prices tend to stagnate or decline slightly, the price contractions that single-family homes experienced in the second half of this year aren’t alarming. Yes, we are moving into a new chapter in the housing market that doesn’t involve astronomical price increases and 20 offers the first day the home gets listed, but that’s actually a good thing. Home prices in the Bay Area grew quickly, and a contraction is a normal response to that sort of growth. We are now entering a stage of slower growth — but still growth. Real estate has shown itself to be one of the best investments in recent history and is, on average, the largest store of wealth for an individual or family. Price appreciation will likely move to a more normal growth rate of around 5-6% in the coming years.

 

Fall sales slowdown