Market Momentum: Pre-qualified Surge, Crowded Open Houses, and Revived Inventory
At the national level, anecdotal word from agents continues to be that activity on both the buyer and seller fronts has picked up substantially so far in 2024. January data will be a much more important indicator than December's - as it should begin to reflect the recent changes in interest rates, financial markets, and consumer confidence.
One critical dynamic in the market is that, for the last 10+ years, homebuyers have generally jumped back into the market earlier and in greater numbers than sellers with new listings as the market wakes up in the new year. This sets the stage for a big mismatch between supply and demand right from the start, which typically manifests in fast sales, competitive overbidding, and price increases moving into the spring selling season. Median sales prices often peak for the year in spring as a consequence (though a spring surge in luxury home sales is also a factor in median sales prices hitting their annual peak)
In our local market, we are seeing an increasing number of buyers obtaining pre-qualification. Open houses frequently attract over 100 groups of potential buyers. Additionally, there is a growing presence of inventory, although it remains below typical levels. Buyers who were on the fence are starting to jump into the housing market.
Whether you are considering a real estate move this year or the next, we'd love to sit down with you and discuss your goals. Let's strategize and create a plan tailored to your specific needs and preferences. Don't hesitate to reach out to us at (650) 988-5114 to get started. Our dedicated team is eager to assist you in achieving your real estate objectives!
After the big decline in November and December, interest rates have basically been flat for the last five weeks:
The long-term view:
Q4 GDP figures were released and remained quite positive.
Consumer Confidence/Sentiment is soaring: “Over the last two months, [consumer] sentiment has climbed a cumulative 29%, the largest two-month increase since 1991...For the second straight month, all five index components rose...a broad consensus of improved sentiment across age, income, education, and geography...and is likely to provide some positive momentum for the economy...Year-ahead inflation expectations softened to 2.9%." Univ. of Michigan Consumer Sentiment Index, Director Joanne Hsu, 1/19/24
It's hard to overstate the rebound in stock markets seen since late October 2023. The S&P has hit a new high, and the Nasdaq is getting very close. This has had an enormous effect on household wealth and consumer confidence, especially in more affluent households, which make up a very large percentage of prospective home buyers and sellers in the Bay Area. Psychology - optimism or pessimism about the future - plays an enormous role in the housing market.
Thinking of buying or selling in 2024? Let us be your trusted advisor for Silicon Valley Real Estate.
