The Bay Area Market Is On Fire!

Good news everybody, the market is hot again! After experiencing a terrible Fall of 2018 and lackluster Summer-Winter 2019, we’re seeing the market pick up again. In January, homes were packed with dozens of eager buyers who wanted to get their piece of the Bay Area real estate market.

Why Is The Market So Hot?

One of the reasons why the market is so hot is because inventory is so low. We only have 700 or so active listings in Santa Clara County, whereas this time last year we had around 1250. This lack of inventory, combined with the ever-increasing stock market (*cough* Tesla *cough*) and super-low interest rates, means that people now have the ability to buy properties at a higher price… And they are.

In fact, many properties are getting multiple offers, sometimes for several hundreds of thousands of dollars above the asking price. In some cases, the buyers know that no appraiser will justify their purchase price, and are ok with coming up with the difference in cash (thank you Tesla stock).

Mortgage Rates are Down!

Interest rates are also ridiculously low. I heard that a 30-year fixed FHA and VA loan can be had for just 3% while a Conventional and Jumbo loan can be had for 3.25% with no points! I’m sure a lot of our local lenders are getting a lot of business refinancing homes right now. Some experts think that the rates will decrease further due to the disruption of business caused by the Corona Virus.

So is this good or bad for us?

It depends on what side of the table you’re on. If you’re a buyer and are trying to acquire a property at a steep discount, then your time might be up. I remember September of 2019 when buyers wouldn’t even look at a property until it was discounted by at least $50,000. Sellers have a major advantage now, and time will tell whether this is a temporary surge, or if we’ll see prices continue to soar as they did in the Spring of 2018. I’m hoping for the latter.