My Bay Area Real Estate Crystal Ball: What I’m certain will happen in 2013…maybe.
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So what’s actually going to happen in the Bay Area Real Estate markets in 2013. One thing is absolutely certain, and that is the fact that it will change. The extent to which it will change depends almost entirely on government intervention. If there was no government intervention there would have been no burst in the housing bubble. In fact, there wouldn’t have been a bubble! That said, the government will interfere, and the pulse of our market will not truly be “free.”
The best predictor of future behavior is past behavior. Here is our “Past Behavior” with regard to Real Estate in Contra Coast County per TrendGraphix. I doubt that these drastic and correlated trends are truly free. They are, however, the facts…and that you can take to the bank.
For Sale and New Listings (Supply of homes for sale) decreased by 74% and 58% respectively. That, by itself, is meaningless. However, nothing in business is truly ‘by itself.’ Average Sold Price and Average Price per Square Foot (a function of Supply and Demand) increased by 44% and 30% respectively. As supply goes down, price goes up.
Another variable that is affected by a drop in supply is how many days it takes for a home to be “sold.” This is seen as Ave CDOM on the table above. It stands for Average Cumulative Days on Market. You can imagine that as supply goes down, the few homes remaining on the market (if priced reasonably) will go quickly!
So what is my “Prediction” for 2013? Continued, unsustainable, increase in home prices.
- More and more people will be out of the red and into the black, opening the door for more listings and purchases.
- Builders continue to buy previously abandoned developments and land in an effort to increase inventory and meet demand.
- Auction properties/flips will continue to dwindle as fewer and fewer homes are foreclosed upon.
- Rent prices will stall or decrease as more and more home buyers re-enter the market after short-sale or foreclosure.
- Home Owners will leverage low interest rates in an effort to move ‘up’ in the market, opening up more homes for 1st time buyers.
Of course, all of this is subject to:
Interest Rates
Tax Consequences
The job market
Economic stability and security
The absence of catastrophic events.
Other than that…I’m CERTAIN! ; )
As always, I’ll leave you with little tip:
Garbage Disposals
- Never put hard-to-grind waste into the disposal (ex., chicken skins, egg shells, bones, celery or banana peels,…spoons!) – they will clog the drain.
- Run cold water down the drain for about 15 seconds before and after using the disposal to flush waste down the main line. Just because it’s past the disposal doesn’t mean it’s down the drain pipe.
- Turn on the disposal before adding food waste. Give it a fighting chance. Let the disposal get up to speed before safely putting waste into it.
- Clean your disposal with warm water and a dozen pieces or ice or so. It’s the best “tip” I ever received from my plumber…after he pulled egg shells from my dishwasher vent tube. Oops!
Until next time, and thank you in advance for remembering me when the topic of real estate arises.
Email me at andy.blasquez@gmail.com
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Click here to reach Macky Hensel.Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook
Finally, please comment or ask questions. Other readers may be wondering the same thing. I love the feedback, critical or otherwise, and love the interaction: I love this job.
Thank you always for your support.
Thanks, Andy. I see pretty much the same thing here in Sonoma County. Here in Sebastopol we have 11 McMansions coming on the market soon, priced in the mid $700k range. It will be very interesting to see how quickly they move. There haven’t been any infill developments here since the late 1990′s, and there are people who want new homes. But the plans the builder used were the same ones that made sense to the previous developer when they were approved in 2005. The price misses the sweet spot (Lots of demand, little or no inventory in the $500k-$650k range), the style is 2 level rather that single level (Which many buyers want) and the lots are tiny. Most people who want small yards here are downsizing and want single level homes that are walkable, another miss. And 11 homes more doubles the inventory in the $700k-$1MM range within city limits. Smaller, single level spec homes are also being built and sell immediately. Interesting times…