Let’s talk about the state of the North Bay real estate market and what my crystal ball says is in store for us over the next 6 months.
Below is a chart showing the Median Price of North Bay home sales since July 2021 (Marin, Napa, and Sonoma Counties combined). To nobody’s surprise, the peak of the market was in Spring of 2022, and since then we have seen about a 9% dip in median price through the end of September. I expect that when October’s numbers come out next week we will likely see that gap widen even further, and we should continue to see a decline in Median Prices for the time being.
In a typical year, many buyers will disappear during the holidays. They have parties and vacations and holiday plans and shopping and everything else that life throws at them during that time of year, so only the most dedicated buyers tend to be actively shopping during the holidays. At the same time, sellers are aware of this (or at least their listing agents are), so typically only the sellers who are most urgently in need of selling will list during the holidays. If they can afford to, many sellers would rather wait until late winter/early spring. Because of all this, prices tend to stay pretty flat or decline a bit during a typical holiday season and tend to increase each spring, but this winter should weigh more heavily than normal on the decline side of that typical pattern.
Obviously, what happens with the market next spring is going to depend a lot on what happens with the economy and interest rates over the next few months, but if I had to put an educated guess on it, I expect the North Bay real estate market will hit a low Median Price of about $850,000 this winter and then see a fairly flat pricing graph next spring (yes, I will revisit this post next spring and see if my crystal ball was correct), as the typical spring price increase is counterbalanced by high interest rates and lower-than-normal buyer activity.
For what it’s worth, I also wanted to talk about an interesting perspective on opportunity for buyers to consider. Last April and May was when many buyers called me to say, “I’m done”. The market was too crazy. They were getting beat out by way-over-asking, all-cash offers, so what was the point? Now some of those same buyers are telling me, “I’ll wait until prices come down some more”. The problem is: when prices come down, competition will go up again. Timing the market can be extremely difficult, but the very best time for most buyers…assuming the right house comes along in a time of such limited new inventory…is going to be this winter. I wouldn’t count on prices going too much lower than we will see in December or January for the time being, or you may be waiting a long time and chasing the market again next year.
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