2018 was a horrible time to be a home buyer right? So much competition among buyers, bidding wars and closing prices well over what the seller was originally asking right?

A few times per year we like to drill down and take a really close look at the real estate and lending market. We’re always striving to be your Pleasant Hill real estate expert.

Below we go over the most recent home sales statistics for Contra Costa County, what we might expect for the spring seller season market, whats happening with mortgage rates and are more or less people applying to purchase real estate recently, and what is the likely hood of the market remaining strong over the foreseeable future.

Contra Costa Home Stats for February

According the California Association of Realtors most recent market report.  The median sold price of existing single family home is down in Contra Costa by 10.8% year over year but UP 15% over last month.  Contra Costa has the highest drop year over year compared to any other County located within the San Francisco Bay Area.

Most reputable forecasting real estate experts are suggesting that the home values will continue to increase but at a slower rate than previous years.  For instance, last year we say home values increase in Pleasant Hill by 3.2% according to a popular home value index.

Current forecasts are lower at 2.3% for the coming year

Obviously these numbers can vary from town to town in the East Bay Area…

I like to focus on Pleasant Hill since that is where our offices are, I grew up here and it’s the primary community I like to serve.

This may be a good time for a home buyer to stop and do some personal calculations on the cost of waiting to buy a home, assuming that the forecasts are correct.

We like to provide our clients with this handy Rent vs Own excel spread sheet you can download for free.  I show an example how it works here.

2019 Spring Fever Seller Season

With the rain beginning to go away, the sun staying out longer and shining brighter those who have been thinking about selling their home are gearing up to take action and list on open market.

Another driving force to increased inventory on market is a general sentiment that a recession may be coming soon forcing potential sellers to believe that now may be their last chance to get top dollar for their home sale before we may see a dip in pricing.

We are seeing more and more listings every week and busy open house and showing schedules.

Mortgage Rates See a Huge Push

The bond market dropped sharply and mortgage rates followed suit as usual with the FED reversing its direction on the aggressive rate increases we were told to expect due to many fears on the forward momentum of the economy.

While a recession does not look like it right around the corner and jobs number are still very strong a few recent events such as a very rare inverted yield curve…

One of the most reliable recession indicators in the market got triggered recently. First time we’ve had an inverted yield curve since… 2007 pic.twitter.com/fpCeLiDN7h

— Jason Wheeler (@JasonWheeler) March 26, 2019

…the likes we have not seen since 2007 have caused the powers that be to be more cautious even though unemployment is near all-time lows at 3.8% and forecast to stay very strong for the near future.

In an effort to keep confidence for home buyers and the general market strong mortgage rates coming down has excited home buyers that were seriously fatigued this time last year due to buyer’s competition and rising interest rates of 2018

These lower interest rates are contributing to home sales bouncing back this spring.

Mortgage Applications Trends

Mortgage application volume was up significantly at 9.13% in January and February for home purchase pre approvals.  This is usually a very good indication that those thinking of buying a home are ramping up to be in the market in early spring.

With a recent drop in interest rates within just the last weeks we are expecting an even larger increase in mortgage application volume for march.

I’ll tell you this…

Our Pleasant Hill lending division office has personally seen a large increase in the last weeks in mortgage application volume for both purchase applications and refinance applications much higher than the reported amount of 9.13%.

Conclusion

Home sales in the local market slowed down significantly in the last quarter or 2018 and continues to be below previous levels in the first part of 2019.

1. Many key indicators and recent triggering events are pointing toward a busy spring selling season.

   There are a few indicators of a general recession coming soon however jobs reports are still very strong being the main indication of consumers willing to buy and interest rates have recently had their biggest monthly drop in the last decade.

2. We are looking to see a busy spring seller season with a bit more of a balance between buyer and seller compared to the first part of 2018 where sellers were almost 100% in control, where most listings were heavily competitive, multiple offers were the norm, and closing prices were well over asking.

3. If you are a buyer be ready to compete for the pristine turnkey properties this spring, but you may have more negotiating room and less competition on homes that are less updated and or desirable.

4. If you are thinking of selling your home, you may have to be ready for a higher than normal amount of competing listings as many who’ve been thinking of selling feel that this spring may be the best time with recession being on the minds of many and also in the news…

Many sellers believe this could be their last chance in a while to sell their home for top dollar.

If you’re already a homeowner the recent mortgage rate drop should have you considering a refinance if your interest rate is any where over 4.75% for sure.

Recently we’ve been locking in our clients a 10 Yr ARM near 3.5% for a borrower and a 30 Yr Fixed at 3.99% with a small credit back toward closing costs.

Be reasonable with your listing price, and aware that buyers may be warier this spring… make sure you look at the benefits of trying to sell for top dollar vs selling your home quickly.

The Real Estate agent you’re consulting with should be able to give you a good value range supported by hard data and experience, and also explain the benefits vs costs of where you choose to list your home on the spectrum.

Should I Buy a Home in 2019 In the Bay Area?

Is now a good time for you to buy your first home? Here’s my litmus test I tell people to ask themselves in order to come to a good conclusion.

If you already know you love the Pleasant Hill and you will be planting down roots here for about at least the next 7 to 10 years, then buying a home in Pleasant Hill is a much better play than renting…

…provided that you could say yes to the following three questions.

YES I can absolutely afford my monthly payments on the mortgage.

YES I will absolutely have a large reserve fund after I purchased the home. At least six months of expenses.

YES If a recession DOES hit and my home value goes down temporarily, I will still be happy in my home and have a great place to live that I can afford.

Those three questions above are my bulletproof litmus test on whether not you should buy real estate, regardless of how prices are, what the market is doing and how mortgage rates are moving.

I use a cool excel “calculator” sheet to estimate a cost benefit of renting vs buying here in the Bay Area.

Please call or text me personally if you have any questions.

Jason Wheeler – 925-285-2172

Striving to be your Pleasant Hill Real Estate Expert