Danville and San Ramon Market Report Update

I have no crystal ball and cannot predict the future but I can share with you a few key data points for the Real Estate Market for the East bay.  I’m going to focus on National news as well as 4 key data points for both Danville and San Ramon California to help give you an edge to make better decisions for yourself and your family. 

Hmmmm, What’s really interesting to me right now is what’s going on with inventory and with Absorption in San Ramon.  

So, here is where were at today Nationally :

If you believe that recession is defined by 2 quarters of negative GDP, July 1 the Atlanta Fed announced the second negative quarter in a row for GDP.   SO??  “how does this impact us the Real Estate market right here at home in the East Bay”.   If you were with me last month in June, we discussed a declining stock market, fears of recession, soaring inflation and higher interest rates. The impact is starting to show signs of what happened. 

We’re now only a few months into this change/correction:

• First wave was a decrease in Buyer demand (fewer showings, offers and homes under contract)
• This led to changes in supply (more homes, therefore more price reductions)
• Next step and where we’re at today is altering buyer/seller psychology and balance of power between them.  With one of the most dramatic upticks in history, this transition is typically uneven in the first few months and we’re seeing this now. 

With that being said, let’s take a look at some numbers and focus on leading indicators.
What really caught my attention for June was the INVENTORY and the ABSORPTION for san Ramon.

Danville Market Statistics

 For Danville:

• Inventory: June 2022 had 94 homes for sale, up 4.4% from last month and up 129% from June 2021
• Median DOM: for June 2022 was 10 days (not bad) up from 7 last month and 6 days last year
• Absorption/Months of inventory: (which is a true indication of trailing demand) was 1.4MO in June 2022, slightly up from May 2022 and up a whopping 274% from June 2021
• **PENDING home sales which is really the most current indicator of the psychology of buyers and sellers in current market right now today.  June 2022 showed us 54 Pending homes, down almost 20% from May 2022 and 48% from this June 2021 this time last year.

San Ramon Market Statistics

For San Ramon:

• June 2022 showed 104 homes for sale, up from 62 homes the month before in May 202 and up from 22 a year ago June 2021 (almost 5 times more homes)
• Median DOM – 13, up from 9 in May and 7 a year ago >> not a big deal but if you’re selling it feels like FOREVER!
• Months of inventory – what is the psychology of buyers/sellers in San Ramon????  June 2022 saw a WHOPPING 2.5 mo of inventory (compared to .8 mo in May 2022 and .2 mo in June 2021 that’s almost a 1000% increase)!  This suggests that buyers and seller are not wanting to come together and make a deal due to over pricing and or underbidding with too big of a gap.
• ** PENDING home sales – there are only 44 homes that are pending in San Ramon, this is down 20% from last month and down 55% from last year.

Remember “a correction” is not a crash and our housing market still boils down to supply and demand.  Our market is still strong and it is still very much so a seller’s market. Unlike 2008, Mortgage payments as a % of income are close to all-time lows (with some of the historically lowest mortgage rates ever seen). 

Keep in mind that - Market corrections over the last 4 decades (outside of 2008 housing crash) have resulted in either a flattening of appreciation or a mere 5-10% appreciation rates (still not bad at all).  It just seems relatively small compared to the 15-30% appreciation we’ve seen over the last few years. 

So, what’s in it for the future?  As of early July 7, interest rates have already fallen about a half point since 2 weeks earlier. You should know that, over the past 5 recessions, we’ve seen interest rates fall an average of 1.8 percentage points from the peak to the trough. 

IF you want my advice >>

Buyers – buy now, don’t wait, economists are saying that when we look back at 2022 in the rearview mirror, the prices will not be dramatically different but they will be lower.  We’re coming off of some tremendous appreciation in Q1, so that’s fizzling down.  and while prices are coming down slowly, they aren’t coming down dramatically.  And you won’t really know the bottom until it’s behind you.  The bottom of 2022 will more than likely be lower than the bottom of 2023. 

Sellers – this is not the time to “test your price” nor is it a time to take your real estate professionals’ advice as optional.  If you want the best price, then price it right for the neighborhood you are in.  There will be fewer homes that sell, so if only a few houses sell a month in your area, do you want to be one of them or do want to wait to see what the prices will be next month?

It’s too early to make any predictions but, if you want to know more info about your neighborhood or area, just reach out to me for the specific statistics at 925-854-4799.