Quick Take:
- Active listings in the East Bay rose in February and March, showing signs that inventory will follow normal seasonal trends, albeit at depressed levels.
- Home prices rose meaningfully in the first quarter of 2023, up 15.2% for single-family homes in Alameda and 8.4% in Contra Costa. Condo prices rose 2.9% in Alameda and 4.2% in Contra Costa, indicating that unusually low inventory is once again driving pricing despite higher mortgage rates.
- The market firmly favors sellers after Months of Supply Inventory declined sharply, as sales increased and homes sold faster month over month.
Rising Demand still Outpaces Rising Supply
Every year, by at least March, we expect to see inventory rise after a high number of new listings come to market, which easily accommodate the increase in sales we also tend to see in the first half of the year.. Inventory in the East Bay, thankfully, increased in February and March, unlike the inventory in many other major markets, which is continuing to decline. Typically, inventory grows in the first half of the year, peaking in June or July. The East Bay has enough demand that many more homes could come to market before the market would balance between buyers and sellers. Currently, sales are still below last year’s level, but we expect sales to climb higher in the second quarter with more homes coming to market. As demand increases, competition among buyers and housing prices will climb with it. Single-family-home prices in the East Bay are still nearly 20% lower than their all-time highs in Alameda and Contra Costa, but condo prices are only slightly off peak. If active listings unexpectedly plateau or drop in the second quarter, we could easily see single-family-home prices rise significantly, and condo prices potentially reach new record highs in the summer.
