Hello and welcome back to the new edition of Bay Area Housing Market Update. I am Nagaraj Annaiah, your trusted tech realtor from the Bay Area. Did you know that there's something huge, something massive happening in the US Housing market? And that it's being reflected in the Bay Area as well?. In this show, I will give you some insightful news about new home sales, $30,000 price cuts, and the general slowdown in the Bay Area housing market. This is great news for home buyers. The sellers can profit here as well. If they don't sell sooner, they will lose out due to the price drops in the upcoming days and months. Stay tuned.
The Rough and Tumble World of Real Estate
It’s been a rough couple of months for new home sales. According to the U.S. Census agency, sales of new single‐family houses in April 2022 were at a seasonally adjusted annual rate of 591,000—a 16.6% decrease over March and 26.9% decrease over April 2021.
The median sales price of new houses sold in April was $450,700, while the average was $570,300. It also makes sense that new home sales would decline when interest rates go up. When borrowers have to pay more for their loans, they'll be less likely to buy houses.
And if you’re looking to buy a house soon? You might want to hurry up: there is only 9 months’ worth of inventory on the market right now, which represents a supply of 9 months at the current sales rate!
If you're a homeowner and you've been thinking about selling your home, it's time to get started. In other words: the market is weak right now, and if you want to sell your home quickly, it's time to get moving on it ASAP. Last Week, my client sold home for 170K less than comparable sale of last two months. He had bought this property for 960k 2 years back but sold at 1.23 Million still he didn’t lose the money when he sold but only the difference was the profit margin.
If you need help getting started (or just have some questions), reach out to me! I'll be happy to help.
Up to $30,000 Price Cuts on Zillow
More homes are available than being sold in the Bay Area. This is the time for you to buy, particularly in areas like Gilroy, Morgan Hill, Livermore, Mountain House, and Lathrop. The prices are going down, and it's time to buy the dip.
Take Gilroy for example. The sale to list price ratio has fallen from 108% in February 2022 to 106% in May 2022. There are more homes for sale than being sold. Last month, 75 houses were on sale and only 50 got sold. This is in stark contrast to what happened here last November where 36 houses were on sale and 53 were sold. In other areas like Florida and Texas, some experts predict that the price drops will be up to 40%. In areas like Livermore, the homes are being sold for 200k lesser than February and march 2022 sales. There are not many buyers in open houses also.
More New Homes Are On The Market Now
The good news is that the number of new listings that hit the market last month rose for the first time since June 2019, according to Realtor.com. May 2022 home shoppers had 8% more active listings to scroll through compared to a similar period last year. That’s good news for buyers who’ve been struggling to find homes amid bidding wars and exorbitant offers.
And if you’re currently in a bidding war, you might be able to find some relief soon: All those eager sellers are going to start listing their own homes soon—which means inventory is about to get even better!
While there are still only half as many homes available for sale compared with pre-pandemic levels two years ago, this recent uptick could offer a glimmer of hope for buyers who were beaten by the intense competition only a few months ago.
Nearly 1 in 5 Sellers is Dropping Their Price, Says Redfin
Home sellers are starting to feel the pressure. Nearly one in five (19.1%) dropped their price during the four week period ending May 22—the highest level since October 2019, according to Redfin.
And while some measures of competition have plateaued, the picture of a softening housing market is becoming more clear. As long as a home is priced conservatively, it still has a good chance of selling quickly.
Existing Home Sales Are Down!
The housing market has been hot, and then not so hot. The National Association of Realtors released its data on existing-home sales for April, and the numbers show that transactions are down significantly from a year ago. While there were some areas that saw increases in activity, overall sales fell by 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9%.
Added to this trend are the mortgage rates. In Jan 2021, they were at their lowest at 2.65%, according to Freddie Mac. Today, they are touching 5.5%. Panic has indeed set into the sellers’ market that is shifting towards becoming a buyers' market. Make the most of it now, if you are ready.
Higher home prices and sharply higher mortgage rates have reduced buyer activity, according to NAR Chief Economist Danielle Hale. What's more, he says that more price declines are imminent in the upcoming months, and we'll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.
Did you know that if you are a first-time home buyer, you can get a 0% down payment loan? Watch this video now. This is the time to maximise the price drops and own your dream. If you need any assistance, I am the Nagaraj Annaiah you are looking for. Call me now.