“But…isn’t the Bay Area real estate market going to crash? What about Covid? Shouldn’t I put in a low-ball offer? Maybe the seller will accept our offer if they really need to sell their house?”
Take that paragraph above and flip it upside down and backwards: Contra Costa County and East Bay home values are rising, low ball offers have become 10-20% over asking price offers.
But why? How could this be?
Prior to the Covid-19 pandemic, the East Bay Area housing market was already in what is referred to as a “seller’s market.” This means more people buying than people selling homes. Walnut Creek, Concord and surrounding cities were at a near all time low regarding the number of listings available.
Enter Coronavirus and the shelter in place executive order. The East Bay housing market screeched to a halt. House in Concord, Walnut Creek, Pleasant Hill, Danville etc were being withdrawn by the masses. Peoples’ jobs and income became unsteady. Lenders and FHA tightened up their requirements to qualify for loans. Realtors in Concord, Walnut Creek and the rest of the East Bay were unable to show homes at all. The market just basically didn’t exist for a while.
However, as time went on, and real estate was deemed an essential business, the market began to limp forward. Some people re-listed their homes, but not everyone. Many people grew scared, and wanted to wait to list their houses for sale. This contributed to a further decrease in the Bay Area houses for sale. The inventory sunk to an all time low.
In attempt to stimulate the economy, the banks lowered interest rates to the lowest they have ever been in history. Hovering around 3.1%, money is dirt cheap, allowing people to buy more house for their buck. This has brought many buyers out of the woodwork. Renters who were already eyeing the Bay Area real estate market saw this once-in-a-lifetime opportunity. As long as they had a stable job and adequate credit, they were flocking to lenders to get pre-approved. Meanwhile, homeowners were also flocking to lenders to refinance into cheaper home loans, likely contributing to even less listings.
And here we are today. We have a low supply, and a high demand for housing. Throw in the 3.1% interest rates, and you get rising housing prices. Contra Costa County home prices are up roughly 2.5%. The Condo market isn’t doing so hot, people want detached homes; they want space, they want yards.
Buyers who haven’t been affected by the pandemic are viciously competing to get their hands on a set of shiny keys to their new house. Concord realtors and walnut creek realtors have been busy these last couple months to say the least. The competition is fierce between buyers. Listing agents are receiving multiple offers on most houses, usually going over asking price with attractive terms. Some offers are all cash, and non-contingent.
Home buyers in the East Bay are doing whatever it takes to beat the competition with other Bay Area home buyers. It takes a good Realtor who can craft a clean and strong purchase offer, combined with a buyer who is willing to put their best foot forward to get into that house. “Team work makes the dream work,” as they say.
If you’ve been putting offers on East Bay homes and getting beat out, try to not get too discouraged. Realize that this is common. However, it’s important know why you’re getting beat. What could you, or your agent, have done differently? What is the trend you’re seeing with buyers who are winning these listings? Should you look at Bay Area homes with a lower list price, so you can be the one coming in with the powerful offer? Should you begin to look at houses for sale in Concord or Walnut Creek area that need updating? Is your Bay Area real estate agent doing everything he or she can do on their end?
Many stars need to align to make the deal work. Try not to fall in love with a house. It’s easier said than done. Try to view it more as a business transaction until you’re at least in contract. The roller coaster of emotions is tough, I’ve been there myself!