Less than a dozen days into 2017, one thing has already become quite clear: we are in a very interesting real estate market. Among the numerous factors influencing things, one has become a huge topic of conversation lately: inventory. Specifically, the inventory of homes actively for sale in the Bay Area, which is currently historically low. This is having a profound effect on the market, which I would like to discuss a bit today.
Last month, I talked about how rising interest rates were already creating a sense of urgency in real estate sales. Recently, this urgency has hit a fever pitch in the Bay Area for one simple reason: there’s hardly anything on the market! As of the time of this writing, there are, for example, 15 active listings in Apple’s hometown of Cupertino, 14 homes for sale in the city of Campbell, 17 in Sunnyvale, and so forth. These numbers are crazy low, but to get a glimpse of the bigger picture, consider this: there are only about 700 active listings in all of Santa Clara county! Think about it: the heart of Silicon Valley, one of the most desirable places to live in the country, has only 718 homes for sale divided among its 1,304 square miles of area. It boggles the mind.
As you can imagine, this low inventory is creating a very favorable situation for Sellers, who are in the very advantageous position of being able to dictate supply in the face of overwhelming demand. Add to this the fact that many Buyers are scrambling to procure a home before mortgage rates climb even further, and you get the sort of rabid demand that can create truly incredible scenarios. As an extreme example, I’ve heard tales of a recent listing in Santa Clara that sold after a mindblowing 56 offers! This is the sort of situation that would be nearly impossible in most normal markets. But we are far past normal at this point.
So what is to be done?
Well, if you’re a Seller…sell! Or at least strongly consider it. Inventory simply cannot stay this low forever, especially with home prices peaking as a result of desperate bidding wars and giving homeowners a push to finally test the market for their own home. The sooner you act,the sooner you can take advantage of the current abundant demand, before a glut of new listings cools things down somewhat.
For Buyers, all hope is not lost. Patience is advised, since like I said, more listings are inevitably on the way. But if you cannot afford to be patient, or if you want to ensure you take advantage of the currently low mortgage rates, don’t despair. There are still deals to be had out there…you just need to be especially vigilant, thorough, and employ the services of a dedicated real estate agent who can work hard to sniff out some deals for you.
As always, I’m available to advise you on the best course of action for you amid this crazy market, and please don’t hesitate to call me to set up a free consultation. Being informed by an expert like me is the best way to navigate these unique situations, prepare for the future, and make this market work to your advantage. Whether buying or selling, having the information to stay one step ahead can pay massive dividends!