Despite Rising Interest Rates, Bay Area's Hot Housing Market Yet To Cool Off
DUBLIN (KPIX 5) – As interest rates creep up, many thought it would mean some potential home buyers would back off. So far, that doesn't seem to be the case in the Bay Area's red-hot market.
March was another record month for California and Bay Area real estate. The median single-family home price in California, in March, was $849,080, according to the California Association of Realtors.
Here were the median sale prices for single-family homes in the nine Bay Area counties:
• Alameda: $1,430,000
• Contra Costa: $965,900
• Marin: $1,737,500
• Napa: $998,000
• San Francisco: $2,060,000
• San Mateo: $2,280,000
• Santa Clara: $1,950,000
• Sonoma: $833,750
• Solano: $604,000
"The headlines are screaming historically high sales prices. The finer print is, people still want to buy homes," said David Stark, with the Bay East Association of Realtors. "If you look at how long a home was on the market, it's at historically low levels, which tells us that buyers are not only willing to pay those prices, but they're willing to pay those prices quickly."
Mortgage interest rates are rising. However, that phenomenon doesn't seem to have had an effect on the market yet, according to John Levine, the VP & Chief Economist of the California Association of Realtors.
"Even as rates have really, surged over the course of the last eight weeks or so, we haven't seen that affect buyer demand for several reasons," Levine told KPIX 5. "But the bottom line is, we still have ultimately too many buyers and not enough homes to put them in, that's keeping the market relatively strong."
In March, for the first time in about two years, the inventory of available homes did not shrink, according to the latest figures.
"It is significant that we actually have more for the first time in a very long time. We still have a long way to go to get back toward something that looks normal," Levine said. "But, I think for those buyers in particular who really do want to move forward with those transactions and get in while the gettin' was good as it were with rates, that's good news in the sense that they might have a few more options moving forward."
Bay East President and Realtor Sheila Cunha tells KPIX 5 while the market is still "crazy," it's not quite as crazy as it was a few months ago.
"We're not seeing quite as many offers right now as we did four or five months ago," she said.
Cunha believes the rising interest rates will ultimately lead to some potential homebuyers backing off, but doesn't think that'll happen until the summertime.
"I think it's coming. I think as the Fed continue to raise the interest rates you'll see buyers not being able to afford what they once could," she said.
As for the inventory, she thinks that will slowly start to increase as well.
"Spring is usually our busiest season," she said. "I think we'll start seeing more homes coming on the market."
