Prices Show Signs of Recovery, But Supply Concerns Persist: The Spring of 2023 brought about increases in median sales prices across all Bay Area markets. However, it is important to note that these prices remain below the peak prices observed in the Spring of 2022, and are often significantly lower. Nevertheless, there are positive signs indicating that the year-over-year price declines are starting to diminish. This trend is expected to gain momentum in the coming months as year-over-year comparisons will no longer be made against peak prices, and it is presumed that prices will continue to recover.
Market indicators, such as days on the market and overbidding statistics, have generally shown improvement across the board. This suggests a strengthening market sentiment and increased competitiveness among buyers. Buyers are likely becoming more active and willing to pay higher prices, leading to reduced time on the market for properties and a higher frequency of overbidding.
Despite these positive developments, a significant concern in the Bay Area real estate market is the scarcity of new listings. Over the past year, the number of new listings entering the market in most counties has reached its lowest level in over two decades, and possibly even longer. Additionally, the number of sales during the same 12-month period is also at its lowest since the great recession that followed the 2008 financial crisis. These figures indicate a supply shortage and highlight the challenges buyers face in finding suitable properties.
While luxury home sales have shown signs of recovery, they have not reached the extraordinary peaks experienced during the pandemic boom. Luxury sales continue to lag behind those exceptional levels, often significantly so. This suggests that the luxury market segment is still in the process of regaining its footing and may require more time to fully recover.
In summary, the Bay Area real estate market in spring 2023 witnessed increases in median sales prices across all markets. Although prices remain below the peak levels of spring 2022, the year-over-year price declines are starting to diminish and are expected to continue shrinking as the market recovers. Market indicators indicate positive trends, such as reduced time on the market and increased competition among buyers. However, the persistently low number of new listings and sales over the past year pose challenges to the market, indicating a scarcity of available properties. Luxury home sales are rebounding, but they have not yet reached the remarkable levels observed during the pandemic