The housing market has shown its resilience through the pandemic and remains one of the safest asset classes. The initial seller reticence caused by COVID-19 seems to have subsided and more Sellers are continuing to come to the market. As more supply becomes available, there could be a small price correction in the market, but we do not believe that will occur during the summer months while demand is so high.
Single-family home prices climbed higher as more buyers entered the market. Year-over-year, single-family home prices have increased in both Alameda and Contra Costa counties. The condo market saw an increase in median price month-over-month and looks to be rebounding. The East Bay market as a whole has fared well throughout the pandemic with year-over-year prices dipping briefly in May for single-family homes. The prices in this area tend to be buoyed by lack of supply compared to demand, which still remains true. With demand high and supply decreasing, we expect the year-over-year median price changes to remain positive.
We can look to Months of Supply Inventory (MSI)—the measure of how many months it would take for all current homes for sale on the market to sell at the current rate of sales—as a proxy for demand. MSI has an average of three months in California. The MSI for single-family homes fell well below the three-month mark and now heavily favors sellers once again. As we continue to spend more time indoors, we are not surprised by the higher demand for single-family homes with larger space.
The number of homes under contract continued to trend upward, which contributed to the falling MSI and highlights the demand in the East Bay. Based on these metrics, we believe the housing market is thriving.
Sale to List Ratios
Sale-to-list ratios—which compare the prices buyers pay to the listed prices of homes—suggest that buyers are not paying large premiums. In June, both single-family homes and condos sold in-line with original list prices. On average, single-family home and condo buyers can expect to pay around the listed price. Of course this is an average, we are still seeing plenty of homes that are receiving multiple offers and going for well over asking.
Whether you are buying or selling a home, it is still incredibly important to seek out the advice of real estate experts. At Arrive Real Estate Group, we remain committed to helping our clients achieve their current and future real estate goals. We welcome you to contact us with any questions about the current market or to request an evaluation of your home.