Local real estate market is not cooling with the temperatures

Q. I was waiting for the summer housing market to slow down before I buy a home, but I see no signs that is happening. I keep getting out bid on homes that are for sale. What’s up?

A. You are right: This September was different than normal. It is typically the sweet spot for buyers, because the summer frenzy slows down and competition isn’t as fierce. But according to realtor.com, home sellers this fall are typically listing homes for $20,000 or more than at the start of the year. This comes along with 25 percent more competition for buyers.

According to the report, the best week to purchase a home is usually Sept. 22-28. However, listings have decreased 21 percent this year compared to the start of the year and there are 25 percent more buyers in the market. This means that homes are flying off the market – at least 12 days faster than expected.

For the first time since 2016, homes sold faster in September than August. And because there is more activity than last year, prices are up 8.6 percent in the western part of the United States.

Meanwhile, inventory is still lacking. The number of newly listed homes on the market in September declined by 13.8 percent since last year. This is the larger decrease than the 11.8 percent year over year loss in August.

According to realtor.com, many buyers tend to put their home search on hold after the start of the school year. But remote learning and the desire for more space continued to fuel buyer interest in September.

Unseasonably high buyer interest, historically low inventory and favorable mortgage rates are creating a perfect storm in the housing market. While this is good news for anyone looking to sell their homes, it has created tremendous competition among buyers.

Current trends and activity

Q. As a seller in a non-urban area (you might call Concord/Clayton a suburban area), where is the most buyer activity and what are the current trends for buyers?

A. According to a recent report from realtor.com, suburban homes are seeing stronger price appreciation, shorter days on the market and more views on the site than urban areas. And yes, Central and East Contra Costa are considered the burbs.

A lot has changed since the onset of the coronavirus pandemic, including home buying trends. Homes that could have been sitting on the market because of their size and location are now the preferred choice.

Data shows that in our COVID world, there’s a strong preference toward a suburban lifestyle due to bigger houses, backyards and quiet streets. There is a huge shift in the U.S. workforce since the introduction of the Internet, with many U.S. workers now having the flexibility to work remotely and choose where they want to live.

But cities will not become ghost towns anytime soon; in fact, they are also seeing an uptick of homebuyers. It’s just not as strong as the surge in the suburbs.

According to realtor.com, home price growth in the suburbs surpassed urban home price growth. For example, suburban prices increased 3.2 percent since the first week of March, while urban areas increased 2.3 percent. But year over year suburban listing prices are up 5.2 percent, while urban areas are only up 2.4 percent. The majority of the properties are selling over the asking price, sometimes substantially.

Although it is a challenge for a buyer to compete for a home, it could be worth it because of the historically low interest rates. As I always say, the interest rate is more important than the price if you are going to stay in the home for several years. If you are going to get a mortgage, the payment is everything.

Lynne French is a Realtor with Compass Real Estate and captain of the Lynne French Team. Contact her at lynne@lynnefrench.com or 925-672-8787.

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