Lynn North's Market Update

Santa Clara Valley

January 2024 Market Report

Dramatically Improving Economic Indicators suggest a brighter 2024 housing market!

In the last 2 months of 2023, the average, weekly, 30-year mortgage interest rate dropped from 7.79% to 6.61%. With the fall in inflation this past year, the Fed is widely expected to begin dropping its benchmark rate, probably in multiple steps, in 2024. The consensus forecast among analysts is for further declines in mortgage interest rates.

After its end-of-year rally, the S&P Index was up 25% and the Nasdaq up 45% in 2023 (though it has ticked down in early 2024). This plays a major role in Bay Area household wealth.

The 2023 market was characterized by high interest rates, financial market uncertainty, surprisingly strong demand (considering first two issues), and an extremely low supply of new listings - which maintained upward pressure on prices, even as housing affordability dropped. Sales numbers plunged due to loan rates and the inadequate supply of homes for sale, while for prospective sellers, the motivation to move was reduced by the mortgage lock-in effect.

With interest rates falling, and economic conditions and consumer confidence rebounding, the big question is how much do rates need to fall for buyers and sellers to start participating in the market in normal numbers again? Right now, the direction is trending positive!

*Article written by Patrick Carlisle of Compass
Chief Market Analyst

 

Demographics Impact on 2024 Real Estate Market

When rates start to decline, there will be an influx of buyers and sellers. Per lenders and top analysts, we are expected to get into the mid 5.5% range by the 2nd quarter! 

Housing demand will be fueled by the largest generation of potential homebuyers – the millennials!

Millennials:

  • US Millennials population is 72 million
  • Medial age of people moving out of their parent’s home is 26
  • Medial age of first-time home buyers is 35

The impact of Baby Boomers:

  • Largest group of all homeowners are aged 65+
  • Buyers aged 57+are more likely to downsize
  • Baby Boomers are 52% of all seniors


The average homeowner equity is about $274K

*Data provided by Buffini & Inman

CONDOS / TOWNHOMES

SAN MATEO COUNTY

79

SOLD HOMES ↓22% YOY

33

AVERAGE DAYS ON MARKET ↑32% YOY

$927,000

MEDIAN SALES PRICE ↑1% YOY

$828

PRICE PER SQUARE FOOT ↓2% YOY

SINGLE FAMILY HOMES

SAN MATEO COUNTY

275

SOLD HOMES ↓14% YOY

19

AVERAGE DAYS ON MARKET ↑1% YOY

$1,800,000

MEDIAN SALES PRICE ↑1% YOY

$1,137

PRICE PER SQUARE FOOT ↓3% YOY

CONDOS / TOWNHOMES

SANTA CLARA COUNTY

236

SOLD HOMES ↓23% YOY

21

AVERAGE DAYS ON MARKET ↑11% YOY

$970,000

MEDIAN SALES PRICE ↓2% YOY

$773

PRICE PER SQUARE FOOT ↑2% YOY

SINGLE FAMILY HOMES

SANTA CLARA COUNTY

596

SOLD HOMES ↓8% YOY

16

AVERAGE DAYS ON MARKET ↓24% YOY

$1,173,000

MEDIAN SALES PRICE ↑3% YOY

$1,095

PRICE PER SQUARE FOOT ↑6% YOY

Work With Lynn

She is personally committed to her clients’ success and her impressive results are in selling her listings within 10 days with multiple offers! Contact Lynn for a free consultation on your home.