Question: About your October 21, 2023, column titled “Parents step back on selling now in the Bay Area; is that a smart move?” on The Mercury News and East Bay Times websites:
During the pandemic, we swapped the bustling Bay Area for a serene resort town and embraced remote work. It was a dream come true — until last week. We must soon follow our Bay Area employer’s three-day, in-office mandate in a housing catch-22. Selling our mountain home will be challenging, as will navigating the ridiculous Bay Area market.
Our dilemma boils down to two questions:
Bay Area homes for sale: With interest rates expected to fall, will 2024 finally bring the housing inventory increase everyone’s been predicting? Or will it remain a seller’s paradise, leaving homebuyers like us in multiple bidding wars?
Resort market ripple effect? Will resort towns like ours follow suit if the Bay Area housing inventory increases? Or will these havens retain their pandemic-fueled appeal, keeping housing inventory in check?
Answer: Let me address your wording: “The housing inventory increase everyone’s been predicting.” You must have missed my column, “When it comes to digital ‘experts,’ it’s fear versus facts,” published December 9, 2023. Here is the link.
In that column, I sample real estate economists’ facts versus showmanship from internet influencers. Economists are serious. Social media influencers can be unserious. A stark difference, to be sure. Real estate economists share facts. Many social media influencers deal in clickbait and double talk.
The Merriam-Webster dictionary defines double-talk as “(1) language that appears to be earnest and meaningful but, in fact, is a mixture of sense and nonsense, (2) inflated, involved, and often deliberately ambiguous language.”
We should review the legitimate discussion regarding housing inventory.
During a December 5, 2023, video call, Dr. Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, presented a slide titled “Inventory of Existing Homes.” Lautz proclaimed the following:
“Recent months, we’ve actually said. Things like this is the lowest housing inventory and any October that we have ever recorded, we said the same thing for June. So, as we say that, we know that we’re going to have fewer transactions because we just don’t have the inventory.”
Dr. Lawrence Yun, the chief economist for the National Association of Realtors (NAR), gave a slide presentation on December 12, 2023, for the annual Forecast Summit. It was a video call. Yun made the following forecast while presenting a slide with content from the U.S. Department of Housing and Urban Development:
“So builders have done well compared to the recent 10 years, but by historical standards, they are still under average. Which means America is still facing a housing shortage. Realtors know there’s a housing shortage — inventory shortage, and it is due to this cumulative decade in a sense under production.”
Yun spoke to housing inventory while presenting a slide with information compiled from the National Association of Realtors titled, “Annual Existing-Home Sales: Likely 18% Decline, On track for the worst year since 2008 or since 1995.”
“So this is an 18% decline. Following 18% decline of last year. So two straight years of large double-digit percentage decline. So, very difficult environment” and “Very little distressed property transactions.” Adding, “It could be the lowest since 2008 or could be the lowest since 1995 situation.”
Here are the housing inventory statistics for existing single-family homes in the nine San Francisco Bay Area counties per the California Association of Realtors for November 2023:
Alameda County: 489 For Sale-32.8% Growth Year-to-Year
Contra Costa County: 568 For Sale-34.9% Growth Year-to-Year
Marin County: 182 For Sale+19.0% Growth Year-to-Year
Napa County: 232 For Sale+20.8% Growth Year-to-Year
San Francisco County: 244 For Sale-18.1% Growth Year-to-Year
San Mateo County:289 For Sale-17.7% Growth Year-to-Year
Santa Clara County: 479 For Sale-23.2% Growth Year-to-Year
Solano County: 488 For Sale+20.8% Growth Year-to-Year
Sonoma County: 546 For Sale+8.1% Growth Year-to-Year
Real experts such as Jordan Levine, the senior vice president and chief economist at the California Association of Realtors, track the months of housing inventory. On September 21, 2023, his online presentation included a slide titled “Inventory remains the biggest challenge — August 2022: 2.8 months; August 2023 2.4 months.”
Conversely, the online double-talking self-appointed real estate influencers want you to believe an abundance of housing inventory is coming due to the housing crash in development. Clickbait is often counterintuitive. Acting on it is counterproductive.
Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the safe move. Contact him today,
Realtor Pat Kapowich, a career-long consumer-protection advocate.
Office: 408-245-7700; Pat@SiliconValleyBroker.com
