Market Talk with Erin

Reflecting on Q3

The real estate landscape is always shifting and now is no different. The recent drop in interest rates hasn’t sparked the big jump in buyer demand that many expected. Some buyers might be holding off, hoping rates will drop even further. Meanwhile, the number of homes for sale keeps growing faster than sales, giving buyers more leverage. Still, many homes are selling quickly and above asking price—it really depends on the property’s price, location, condition, and other factors. Market activity (and prices) usually peak in the spring (Q2) and then cool off in the third quarter, which is what we’ve seen this year. In 2024, sales of higher-priced homes have been stronger than the overall market.

The median home sales price has declined in Q2 and Q3. We believe this is the direct result of Buyers’ hesitancy given the hope for future rate reductions. We are advising our Buyers to act now if they are serious about buying. The best time to buy is when you have little competition. You can always refinance your rate, but your purchase price is static. Savvy Buyers are securing some great deals on units that are sitting on the market. 

Other note-worthy items:

• Luxury homes (5M+) have been performing very well on the north side of San Francisco. This is because of the considerable supply and demand issue.
• Open Houses have been slower over the past couple months. Those who come to the open houses tend to be serious buyers.
• October tends to be the last busy month for sales before things slow down for the winter holidays. Sellers often reduce prices this time of year to try and get their homes sold before the winter slowdown kicks in. Buyers should pay attention, there will be good values on the horizon.
• Tenancy In Commons (TICs) are trading at approx 20% less than than a comparable condo yet their rates are in-line with conventional rates.