Amador. Livermore. San Ramon. If you’re a resident of the Bay Area, you know that I’m not listing the names of the Three Musketeers. I probably don’t need to tell you that these are the three valleys from which the region that we lovingly call the Tri-Valley area takes its name. With its Mediterranean climate and its proximity to both the city of San Francisco and the wine region, it’s a highly desirable place to live, but of course you know that already. But how is the real estate market in this splendid area at this point in time?
Shrinking inventory means higher prices.
For those of you who don’t work with real estate every day like I do, it may seem odd to think of homes in terms of inventory. But that’s exactly how we, as real estate agents, understand the market. While we don’t keep a warehouse full of stock, like retailers do, the real estate market does indeed deal with inventory, which means the supply of homes for sale on the market right now.
This also means that the same rules and principles apply to the real estate market as in any other type of business. Even if you don’t work in retail or manufacturing, I’ll bet you remember the Law of Supply and Demand from your school days. The general theory, of course, is that as supply decreases, demand tends to increase, and so do prices.
Home supply is down significantly.
The current trend in Tri-Valley real estate has been a decrease in supply of homes. It was recently reported in Mercury News’ Silicon Beat that in Fremont, for example, this past September saw a drop of 46% in home listings. (Yes, listings are what we call inventory or supply). Demand for this reduced supply of homes continues to increase, so prices have been increasing, with median prices increasing by 13 percent, pushing that number up over a million dollars.
What this means if you’re selling.
No matter what the industry, reduced and supply and increased demand and prices defines what’s known as a seller’s market. So, if the time has come for you to sell your home, either because you’re scaling up or down, or relocating out of the Tri-Valley area, you’re in luck. Homes are selling quickly, and at ever-increasing prices. Chances are that you won’t need to keep your home on the market for very long, and you can expect an excellent return on your investment.
What this means if you’re buying.
Unfortunately, the Tri-Valley real estate market is not a buyer’s market at this point in time. This doesn’t mean that you won’t find the home that you’re looking for, or get a good deal. But it does mean that you’re likely to have to work a little harder in order to find that deal. Fortunately, mortgage interest rates remain close to historic lows, making the higher prices a bit more tolerable, and a good real estate agent can help you find a home in the area that will meet your needs, and help you negotiate the best price.