A Note from our President & CEO
In my last market update, I mentioned that the Bay Area real estate market would remain relatively the same as 2019, in regard to price appreciation and mortgage interest rates.
If you look at the first quarter stats, you will see that is exactly how we started the year. Now, all I can say is — what a difference 30 days can make! With the advent of Covid19, it really is anyone’s guess what will happen the rest of 2020 with all of the variables that are in front of us at the moment. Based on my 30 years of real estate experience, here is my best guess as we enter the second quarter of 2020…
Mortgage interest rates will remain low, but obtaining a loan may take longer in many cases, so prepare and plan accordingly. There is a lot of housing stock that will come to market once the virus subsides and Shelter in Place guidelines are lifted.
The question is will the demand side be strong enough to absorb the supply side of the equation. If demand is robust enough, then prices should stay relatively stable; if not, we will see some price depreciation as we move through the second and third quarter of 2020.
How much, no one really knows, but I believe, based on a number of factors, price depreciation will be minimal. For me, the two most important factors, and why I don’t believe we will see major price adjustment in the North Bay, are our lack of housing units to meet the demand prior to Covid19, and two there are many segments of our local economy that have experienced growth during the pandemic.
Look for a little bit of a roller coaster ride over the next 6 months, but with that said, there will be opportunities for sellers and buyers. My advice is to stay in close contact with your real estate professional, outline a plan, and most importantly prepare early to achieve your goals.