The Local Lowdown: August 2024

Michelle Kim | August 28, 2024

The Local Lowdown

Quick Take:

Median home prices are slightly below peak levels across the East Bay. We expected price contraction after peaking in the second quarter, which is the seasonal norm. Prices will likely decline for the rest of the year.
Total sales in the East Bay rose 3.0% month over month, highlighting the high demand. Homes coming under contract rose significantly as well, up 4.9%, indicating that sales may increase again in August.
Months of Supply Inventory still indicates a sellers’ market in the East Bay for single-family homes, but for condos, MSI implies the market is more balanced.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

The median single-family home price in Contra Costa is near an all-time high

In the East Bay, low inventory and high demand have more than offset the downward price pressure from higher mortgage rates. Prices in the East Bay generally haven’t experienced larger drops due to higher mortgage rates, and as mentioned in the Big Story, higher mortgage rates are contributing to prices staying high. Year to date, in July, the median single-family home and condo prices rose across the East Bay. Year over year, prices increased most significantly for single-family homes, up 2%. Prices typically peak in the summer months, so we don’t expect new all-time highs for the rest of this year. However, we do expect some minor price contraction in the coming months. Additionally, demand is high enough that it will create price support as supply declines in the second half of the year.

High mortgage rates soften both supply and demand, but home buyers and sellers seemed to tolerate rates near 6%. Now that rates are declining again, sales could get a little boost, but the housing market typically begins to slow this time of year.

Sales and inventory rose, while new listings fell month over month

The 2024 housing market has looked progressively healthier with each passing month. We’re far enough into the year to know that inventory levels are about as good as we could’ve hoped, although single-family home inventory is still lower than we would like. In 2023, single-family home and condo inventory followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings slowed the market considerably last year. Even though sales volume this year was similar to last, far more new listings have come to the market, which has allowed inventory to grow. Condo inventory even reached a two-year high in July. However, for single-family homes, even though inventory is up 32% year over year, it’s still 20% lower than it was two years ago.

Typically, inventory begins to increase in January or February, peaking in July or August before declining once again from the summer months to the winter. It’s looking like 2024 inventory, sales, and new listings will resemble historically seasonal patterns, and at more normal levels than last year. Now that we’re more than halfway through the year, we expect inventory, sales, and new listings to decline through the rest of the year.

Months of Supply Inventory in July 2024 indicated a sellers’ market for single-family homes and a balanced market for condos

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). The East Bay market tends to favor sellers, which is reflected in its low MSI. MSI trended higher in the second half of 2023, moving above three months of supply for condos. From January to April 2024, however, the East Bay MSI fell significantly before rising in May and June. MSI then dipped in July, and it currently implies that the single-family home market favors sellers, while the condo market is more balanced.