Walnut Creek & Concord homes for sale market outlook

Hi everyone,

I have included a few thoughts and opinions on the current housing market as well as some statistics I compiled over the last three months for home sales in Concord and Walnut Creek. What patterns can you identify?

As you all know, we saw explosive market growth over the Spring and Summer, home values shot up between 25%-30% this year. The recipe for this consisted of two main ingredients: super low interest rates and Covid-19. People started working from and spending a lot of time at home, and suddenly the value of owning a home and having a yard and space was more valuable than ever before. The sub 3% interest rates enticed those with stable jobs to run out and fight like sharks over the small supply of homes that were for sale, making the demand even stronger.

Things are different today. The market has cooled off, a lot. Part of this is typical with the Winter season. Packing up and moving isn’t exactly convenient when kids are in schools, the holidays are among us, and the weather isn’t always cooperative. Homes are sitting a little longer and often only receiving one or two offers now and selling for much less over ask price than we saw in the Spring/Summer; some homes are selling under the ask price.

The interest rates, while still decent, are not as sweet as they were, meaning $100-$200 (or more) per month for mortgages. Inflation threatens these rates even further, and I think they will continue to rise in mid to late 2022.

The double-digit growth has slowed, and the frenzy has calmed. I think this will cause many homeowners to feel more confident that if they’re planning to sell their home, the time is right, as they have already hung on for the wild ride and now the roller coaster has stopped. The all to common phrase “I want to sell my house, but where will I go?” may be heard less often.

For those people over 55 years of age and relocating within California, they will be able to keep their current tax base and transfer it over to their new home thanks to Prop 19 which went into full effect in April. Many long-time homeowners have been wanting to move elsewhere, but have been “land locked” in fear of having to pay a new tax base that is exponentially higher than their current tax base, particular the elderly population whom live on fixed income.

Forbearance has also come to an end. And while many people didn’t actually need to take advantange of forbearance, but they did anyways as a precaution, others were actually burdened with loss of income and may sell their homes before they default.

Polarizing political times and rising costs of living are also leading to an exodus from California for many, particularly new retirees.

While I have no crystal ball, I believe we will see a more balanced and “normal” housing market in 2022. I think we will see many new listings in the first quarter of 2022, but I believe that the housing shortage will continue.

Below is data regarding detached homes for sale in Concord and homes for sale in Walnut Creek over the last three months. While it is a small sample and there are other factors involved, these numbers can give you a decent snap shot of the current market conditions.

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