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March 2023 - Spring Housing Market in the Bay Area

As we get ready to launch into the Spring Housing Market, I'm sharing thoughts on some popular topics being discussed right now.

  • What's happening with interest rates and our housing supply?

  • Why would you walk away from your 3% mortgage interest rate?

  • Getting your home ready to sell? Make these repairs…

If you’re curious about the answers to these questions, or if you’re simply looking for advice from the San Francisco real estate pros at Homes With M, I encourage you to keep reading below! Our monthly newsletters are the latest and greatest source of information when it comes to expert insights on the East Bay’s housing market. Check out this month’s newsletter to find out how to make smart decisions with your property, then book a strategy call today!

Interest Rates & Housing Supply issues

Jerome Powell (our Fed Chairman) continues to express dissatisfaction with the high inflation numbers that continue to plague us. As a result, the Fed has communicated additional incremental interest rate increases through the rest of the year, or until the inflation rate comes down significantly, whichever comes first. In the Bay Area, despite the recent tech layoffs, we continue to see demand for quality housing, as we experience multiple offers on well-priced homes in the area.

We also continue to experience a significant shortage of quality housing, and the issue is acute across our nation. According to this article by CNN, the US is now short 6.5 million homes. Why? We are not building enough homes to keep up with new household formation.

Since the shortage of homes here in the Bay Area is particularly tough, our housing prices remain strong and have not declined to the same degree as other parts of the country, despite the pressure higher interest rates have brought into the market. For context, all those price reductions we have been seeing in the market between October and January were a result of the "pandemic" style pricing of homes by sellers who expected the market would continue to rise aggressively. What happened instead is that values did not continue to rise, they just leveled out.

This chart by realtor.com shows the disconnect between housing formation and housing starts (building new homes).

houshold formation and housing starts single family trends housing supply shortgage.png

Why would you walk away from your 3% mortgage rate?

So you want to sell your home in the current market?

Wondering what repairs you should make so that it will appeal to as many potential home buyers?

Keep this guiding principle in mind when you evaluate how much to do to get your home ready for the market: Ensure Health and Safety concerns are addressed so that you can deliver a functioning home to its next owner.

  • Fix what's broken: Prioritize repairs of a leaky roof and plumbing and replace torn carpeting
  • Keep it neutral: Avoid cosmetic upgrades that may not appeal to all buyers
  • Skip major renovations: that may not yield a return on investment such as bath and kitchen remodels, as these return only about 60% of the money you spend
  • Deep clean the kitchen and bathrooms
  • Cut the lawn, remove weeds, mulch flowerbeds where you see a lot of exposed dirt

Thinking of buying or selling in 2023?

Book a strategy consult with me, and we can help you get your plans into motion!