For most of us — especially those nearing retirement age or are already there — our home is our most valuable asset, so it’s impossible not to focus on the many factors that affect its worth. While prices tend to go up over time, it’s short-term, as of late, that have caused some rather dramatic changes.
When the pandemic hit, the primary residence became a hot commodity. Why? Because people were spending 24/7 in their homes, working, and living in one space. In the Bay Area, that caused a roughly 20% appreciation in specific areas like Contra Costa and Alameda Counties. A stark contrast to the typical national average of 3.6% per year. Most recently, we’ve seen the Fed hike the interest rates, which caused another 20% increase.
With all that said, we can’t help but wonder where things stand in the Bay Area housing market now and what we have to look forward to in the coming year. To get an insider’s perspective, we’re thrilled to welcome long-time Bay Area resident and RE/MAX real estate veteran Mark Shaw, a returning guest, to the show.
0:00 Introduction
1:00 Before we dive in, Kirsten shares more about Mark’s background in real estate and why he is our go-to resource for all things real estate.
3:20 These were the pandemic’s initial effects on the real estate market.
4:01 The rapid shift to remote work gave rise to this perspective on what we wanted out of our homes.
4:25 As a result of the new pandemic perspective and the interest in better living spaces, another notable shift occurred in the Bay Area real estate landscape – a 20% market appreciation.
7:09 Now that the pandemic is over, Mark shares what he is seeing in the East Bay market today. Hint: It happens to include another 20% appreciation – yikes!
9:00 In February of 2022, the real estate market rapidly changed once again with some downward pressure on the pricing.
10:30 The financial crisis began truly impacting the Bay Area housing market in earnest during 2012, but you’ll be surprised at how long it took for Bay Area real estate prices to reach their lowest point.
11:13 By the time interest rates began to go up in February of 2022, buyers were fatigued and beginning to head to the sidelines.
12:46 Here’s how higher mortgage rates have affected first-time buyers in particular.
13:12 Mark shares an interesting sentiment about how “the real estate market is sticky going down,” which kept home prices from dropping even faster than they would have after the rate increases.
14:44 Start listening now for some examples showing that this is currently neither a buyer’s nor seller’s market.
17:05 Two of the buyer’s biggest fears right now are paying too much or buying a lemon – buyers don’t want to be the fool.
18:42 Because so many current homeowners have mortgages with low-interest rates. They aren’t very motivated to sell. Here’s how that is impacting inventory.
19:47 Next, Mark shares some tips to help first-time home buyers who are struggling to get into the housing market.
21:30 Do the current real estate market challenges conjure up images of the 2008 crisis? Here are the differences between now and then.
24:59 Wondering if it’s a good time to get into the real estate market? Here’s Mark’s take on it.
26:25 When considering whether or not to purchase a primary residence, Mark recommends that you ask yourself this question.
28:09 This surprising statistic underscores just how effective real estate is at building net worth.
29:41 Q&A: Have you seen Prop 19 having any effect on the market?
31:46 Q&A: If a parent wants to help a child buy a property but doesn’t want to give their kid the money, can they purchase a property?
33:35 Q&A: What are the best areas in the Bay Area you can purchase for the least amount of money?
Kirsten Howe Can Be Reached at 925-943-2740 or Info@AbsoluteTrustCounsel.com.
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