May 2023 Market Update

David Kim June 5, 2023

Inflation, Interest Rates, Appreciation, Market Cycles, National Metro-Area Prices

The inflation report ticked down very slightly but still rounds to 5% (for the Urban Consumers Index). The "core" inflation rate not illustrated here also ticked down very slightly, but is running a bit higher, at 5.5%, than the overall index. Stock markets have fluctuated up and down with bank crises, inflation reports, and Fed actions without much overall change since early February.
The real estate market continues to demonstrate strength, as multiple offers are being received on homes that are highly desirable to typical buyers. However, it is worth noting that properties with challenging locations or conditions, as well as those with incorrect pricing, tend to linger on the market for longer durations. Homes situated in sought-after school districts continue to experience higher demand.
Moreover, we are observing variations in demand across different areas, although historically, these imbalances tend to equalize over time. This presents a favorable opportunity for buyers to explore diverse areas or property types. Despite the limited inventory, there is an optimistic outlook that more properties will become available as we head into the summer months.
If you plan on making a move this year or next, let's get together to discuss your scenario and strategize for your next move. Reach out to us at (650) 988-5114.
Below are compiled, comparative Bay Area county overviews (with Sacramento added) for 3 of those analyses. A wide number of factors affect appreciation rates, especially the exact start date of the measurement.
1-Year change from peak of the pandemic boom:
3-Year total change since the pandemic hit: Most Bay Area markets, after the historic appreciation rates during the pandemic boom, are still well up or way up from early 2020, when the pandemic hit, despite declines over the past year. The outlier is SF, which with a smaller pandemic bump and a larger correction decline, is at about the same median house sales price as 3 years ago.
10-Year change from 2013, when most Bay Area markets were accelerating out of the depths of the post-2008 market recession/foreclosure crisis, into the high-tech boom years. Many factors affect these 10-year appreciation rates high tech boom, pandemic boom, the recent market correction including if county prices were particularly hammered down by the foreclosure crisis. (Counties that were worst hit by foreclosures often saw the biggest bounce back up in the early years of the recovery.)
NAR just updated its Quarterly median house sales price table for U.S. metro areas, and this table reviews a selection of metro markets. Note: Metro areas vary hugely in the areas they cover.  For example, the SF metro area covers 5 counties (its sales volume is dominated by Alameda and Contra Costa); the San Jose metro is utterly dominated by Santa Clara County (though it includes San Benito County).
On May 18th, the U.S. Census released their new county population estimates. These 2 charts below calculate number and percentage changes from April 2020 (pre-pandemic effect) to July 1, 2022, for Bay Area Counties + Sacramento. (These are estimates and other sources of demographic data sometimes disagree regarding population changes over the period.) We should assume reasonable margins of error in all these numbers.
Actual Census numbers: Population losses in the first year of the pandemic (approx. April 2020 to July 1, 2021) decelerated in the 2nd year in the counties with the biggest numeric losses 96% of SF's loss occurred in the first year, 75% of Santa Clara's, 72% of Alameda's, 71% of San Mateo's but the picture varied in the counties with much smaller losses.
A look at housing construction volumes. The chart insert gives numbers behind the rapid increase in ADU permitting and construction, an interesting development in recent years, which typically adds inventory to the rental market, as well as adding value to the property.
Long-term view of Fed rate changes and interventions: There have been mixed messages from Fed Reserve board members regarding whether there will be another rate increase in June or not.

Flipbook Reports by County


What We’ve Been Up to

SOLD | 12161 Hilltop Drive
Los Altos Hills
5 Bed | 4.5 Bath
Los Altos
3 Bed | 2.5 Bath
COMING SOON | 4238 Rickeys Way, Unit M
Palo Alto
4 Bed | 3 Bath
SOLD | 500 Preston Drive
Mountain View
3 Bed | 2.5 Bath

Upcoming Local Events

San Mateo County Fair 2023

June 3-11, 2023
With well over 100,000 fairgoers this year, the Fair was almost back to pre-pandemic numbers and proved once again that this yearly event is more than just carnival rides and fair foods as fun and delicious as all of those things always are.
More Info Here
Location: San Mateo County Event Center & Fairgrounds, 1346 Saratoga Drive, San Mateo, CA

Free Summer Kick-Off Event

Sat, June 3rd, 10:30 AM – 12:30 PM
Fun for the whole Family Food, Games, Fun inside and outside
Location: El Camino YMCA, 2400 Grant Rd, Mountain View, CA, 94040

6th Violin Benefit Concert

Sun, June 25th at 2:00 PM
Seven young violin soloists of Ker Qi Violin Studio, Fremont, put together a concert to benefit Castro Valley-based Jenny Lin Foundation, dedicated to promote child safety & youth music education. Free admission.
Location: Community School of Music and Arts, 230 San Antonio Cir, Mountain View, CA, 94040
Questions? Contact us

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