March 2019

Monthly Market Minute
State of the East Bay Real Estate Market

Looking at the East Bay real estate market for March, we are seeing some interesting statistics. When comparing March 2018 to March 2019, we see the following:
  • Inventory - up a whopping 42%, although still a sellers market
  • Sales - flat to 3% depending on city
  • Days on Market (DOM) - increasing from an average of 27 days to 34 days
  • Prices - increases of 15-20% for a year ago
So what does this all mean? We normally see the market take off in February from the end of year holiday slumber. For this year, that did not occur until March. Normally, a 42% increase in inventory would signal the beginning of some relief buyers although we have not seen this as evidenced by the relatively flat sales. This was in spite of the fact that mortgage interest rates were low and in some cases even saw declines. Clearly affordability is not improving with prices increasing as much as 20% over 2018. Taken a whole, the data continues to indicate a shift is starting with increasing inventory, longer Days on Market (DOM) and relatively flat sales. However, the shift is being tempered by continued high prices and the corresponding lack of affordability, especially for buyers of homes $1M and under. At some point, as both inventory and DOM continue to increase, there will be downward pressure on home prices.
Mortgage Rates Continue to Fall, But For How Long?
Many people have not noticed, but mortgage rates are at their lowest point since February 2018. But how long will this last? The reality is rates could, and will most likely, increase markedly at any time. We are experiencing the typical scenario. Rates drift downward and people either don't notice or expect further decreases. Then all of a sudden, rates increase and everyone locks the rate in but it is too late. Remember, rates increase much quicker than they decrease. Why are rates going to increase? Quite simply for two reasons. First, increasing US deficits are going to require more Treasuries to be sold to finance the debt. Second, China is facing significant economic headwinds and appears to be less likely to buy Treasuries at their previous rate. Both of these conditions force bond prices down which conversely increase yields. Increasing yields always increase mortgage rates. Bottom line: If you are thinking of purchasing or refinancing, now is probably the best time you will see in the foreseeable future. Click [HERE] for complete article (downloadable PDF in Chrome).
Potential Pitfalls of Home Automation
Home automation is all the rage these days. While the technology can certainly make life easier and more convenient, users should be asking themselves what is the cost of this new found convenience? There have been many articles addressing the security flaws in computers and smart phones regarding hackers being able to audio and video record users without their knowledge. It now appears that the majority of home automation products have the same flaws. In many cases, the security measures to protect your privacy are sorely lacking. Buyer beware and more importantly, be informed before you fully embrace home automation!  Click [HERE] for complete article (downloadable PDF in Chrome).
Investing: Opportunity Zones
Much has been reported on the creation of Opportunity Zones and even more on their tax advantages, but, less has been written about the specific Opportunity Zones that are now found in all 50 states and US territories. Although there are more than 8,700 designated census tracts in the Opportunity Zone program, some offer more potential for immediate positive impact for both investors and residents than others. Guess which zone was rated Number 1 from Fundrise? If you said Oakland you would have been correct. See the complete article [HERE], (downloadable PDF in Chrome). For a general overview of what Opportunity Zones are, take a look at this National Association of Realtors article [HERE].
Curious what your home is worth?

Featured Properties & Market Activity
Just Listed!
6130 Mazuela Drive, Oakland

Large Contemporary Executive Home
5 BR | 4 BA  | 4,734 SF 
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Offered at $1,850,000
2134 Curtis Street, Berkeley

Owner Occupied Investor Opportunity
2 BR | 1 BA  /  2 - 1 BR | 1 BA Units 
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Offered at $1,297,000
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352 Avalon Bay Court, Richmond (on the bay)

Upscale Home with SF Views
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