3 Factors Driving the Real Estate Market

There are three critical factors driving the real estate market.

Today, I’m going to talk about three factors that are driving our real estate market right now: Home prices, inventory, and interest rates.

Home prices here in San Mateo County have been corrected from last November to this November. Prices are actually down by 15%, looking at the median sales price for single-family homes. The average price is now just a little bit over $1.7 million. When we look at the pricing compared to where it was at our peak, which was in April, prices are actually down 25%. But April is a little bit of a blip.

Next, you need to consider our inventory. When we look at inventory for what we consider a balanced market, we think about six months of supply. Nationally, there are about 3.6 months of inventory. Here in San Mateo County, we’re at 2.2 months of inventory. What that means is it’s still a seller’s market, and that’s why home prices are still selling for basically what the asking price is. In fact, we’re bouncing right around 99% to 100% of the sale price to list price ratio.

“Prices are actually down by 15%.”

Finally, when we talk about interest rates, this is another bright spot, especially for buyers right now. Interest rates have fallen by about 1% in the last six weeks or so. So you can actually get a jumbo rate, which is what most homes are financed for in our market, for around 5.5%. Down significantly from the high sixes, or some were even quoted close to 7%.

So it’s a really interesting time in our market. Call or email us with any questions. We’d love to hear from you.