Update on Bay Area Real Estate Market

The current state of the real estate market is exciting. Home values are coming back. Inventory of homes is low; interest rates are still at some of the lowest I have seen in my career. The job market in the Bay Area is better than in the past few years. Homeowners that did a short sale on their home or had their homes foreclosed have become tenants. New hires that have relocated to this area have joined the pool of people that need rentals. This has put an upward pressure on the rental market and has caused rents to go up. People who have been waiting to buy are in the market since now it makes sense to buy versus rent. Investors have jumped into the buyers' pool as the interest rates are low and the rents are up giving them a breakeven or positive cash flow. Banks are selling foreclosed homes directly to investors. These investors are rehabbing the homes and putting them up for sale or they are renting them out while waiting for the market to come back. Homeowners that have been able to hang on to their homes during the downturn and would like to sell their homes are waiting for the prices to come back before they put their homes up for sale. This has kept the inventory of homes at a record low. Low inventory coupled with more buyers have created multiple offers on most homes which increases their sales price. These higher sales prices will in turn increase the value of appraisals and counteract the lower values caused by short sales. Eventually housing prices will increase and will have a positive impact on consumer confidence. Consumer confidence affects consumer spending; which is a major force in keeping our economy going. So, all things being equal, I would say the future of our local real estate market is looking pretty bright!