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Contra Costa Home Prices Will Drop

 

As we peer into the horizon of the Contra Costa County real estate market, signs point to a looming shift in home prices, poised to dip in the coming months. This projection is rooted in normal annual volatility, ballooning inventory, and high-interest rates.


Normal Annual Volatility in the Market


Seasonal ebbs and flows are natural in the real estate market, with Contra Costa County experiencing its fair share of predictable cyclical shifts. Traditionally, home prices tend to ascend in the spring reaching an apex typically in March and April, followed by a gradual descent as the summer months approach. By the year's end, prices are typically well beneath that spring apex. January home prices are generally the lowest of the year and customarily below prices from December of the prior year.  Refer to Chart 1 for a visual diction of the real estate market’s regular annual shifts.




Surge in Inventory


A notable surge in housing inventory has emerged as a defining characteristic of the current market landscape. In March 2024, Contra Costa and Alameda Counties combined for a 21% increase in listings while sales declined 4%. This influx of available properties has resulted in an abundance of options for prospective buyers, as illustrated in Chart 2. We see that there are 1.87 houses available for each person who bought a home in 2024.  The burgeoning inventory will lead to lower prices and a market ripe for buyers.




High-Interest Rates Will Drive Home Prices Down


The prevailing climate of high-interest rates further compounds the downward pressure on home prices. Chart 3 illustrates the inverse relationship between interest rates and home prices in central Contra Costa County. As interest rates soar to levels from December 2023, the consequence is a corresponding dip in home prices. 




Implications for Buyers and Sellers


For aspiring homeowners, the impending market presents a window of opportunity to capitalize on favorable conditions. Despite the high-interest rate environment, buyers can benefit from reduced home prices and the possibility of refinancing in the future. Conversely, sellers must adapt their strategies to align with the evolving market landscape. Those who invest in enhancing their property's appeal and pricing competitively will remain well-positioned to take advantage of the top home prices that the Contra Costa market will yield.


In conclusion, while the prospect of declining home prices may pose challenges for some, it also offers a silver lining of opportunity for astute buyers and sellers alike. By remaining vigilant and proactive in their approach, stakeholders can navigate the evolving real estate market.




Stay informed, stay empowered, and stay ahead in the Contra Costa real estate market!




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