Livermore homes may continue to benefit from the Bay Area’s housing market in the near future — regardless of which direction prices go.
Depending on who you ask, the Bay Area real estate market is either going strong or beginning to cool. That’s according to differing data recently collected by real estate researchers Redfin and Zillow, and it’s something that has caught the attention of everyone from housing economists to the star of Bravo’s “Million Dollar Listing, San Francisco”. In the midst of all of this, however, some speculate that displaced buyers could already be leaving the high-priced, high-profile epicenters of San Francisco and the Silicon Valley in an eastward exodus. Except instead of Sacramento (as was the case last summer) it might be closer to home: The East Bay.
Some of Livermore’s numbers could certainly support Redfin’s opinion that the market’s maintaining momentum. At $685,000, August’s median closing price is still one of the highest points on record. Inventory also went against the grain of previous years by contracting slightly, challenging seasonal predictions of a slowdown in the city’s housing market. In the words of a Redfin spokesperson, “There’s not nearly enough inventory to meet demand… the results are bidding wars and escalating prices.” And in line with this thinking, the demand for Livermore homes will grow the further buyers push east in search of affordable real estate.
But many other real estate experts disagree, including Zillow’s chief analytics officer and chief economist, Svenja Gudell. She maintains that appreciation rates are slowing…but that it isn’t a bad thing. On the contrary, Gudell sees this as a sign that the Bay Area housing market is “returning to normal”.
There’s data in Livermore to validate this prediction, too. For instance, the time it takes to sell a home went from an average of 20 days in July to 26 days in August. The relationship between the median list and closing price reversed as well. In July, a house typically sold above asking price—but this trend was flipped on its head last month when the average home closed below asking price.
So how could this be good for Livermore homes?
As Bravo’s Justin Fichelson notes, “[A price correction] could also have a very positive impact on the local real estate economy by creating more opportunities to do deals that were too difficult and expensive to put together a week ago. It brings valuations back in line with an opportunity for growth.” In other words, even if the housing market is cooling off, most experts see it as a healthy correction that will help us steer clear of (dare we say it) a bubble suddenly bursting from unchecked growth—all while introducing new buyers, stabilizing housing prices, and stimulating the local economy.
To add to this, these cyclical corrections have the largest impact on homes with the smallest pool of buyers (i.e. luxury properties) but a minimal impact on those with the largest (ordinary homes). The reasoning is that, if there are enough buyers in a specific market, demand will keep home values healthy and homes selling even as prices adjust. And nowhere is demand as high as it is in the Bay Area, or a pool of buyers as diverse as those in a market like Livermore’s.
Zillow warned that its news could spur indecisive homeowners to finally list their homes, adding to inventories and increasing seller competition as we approach the end of the year. For these reasons—especially if you’re concerned about selling before a potential price correction—preparation is key to getting the maximum return on your equity.
If you’re ready to sell your home (or if you’re even considering it), get in touch with Lifestyle Real Estate Services and ask for a free market analysis on your neighborhood. We’ll help get you the price you deserve!