Despite increased talk around the Bay Area that the market seems to be cooling off, the rest of the country continues to rank us as the hottest market for real estate. Realtor.com released a report at the end of April that ranked the SF area as the top in the country, and just today Inman News published a blog titled, "10 hottest real estate markets for summer 2016", in which we came in at #1. But how can we be the hottest market in the nation if we're actually cooling off?
Inventory has picked up in many areas across the Bay Area, which has softened competition a bit. This is especially true in Redwood City, where our inventory of over 60 homes for sale is nearly double what it was this time last year. As a result, some homes have sat on the market longer than what we had grown accustomed to in recent years, which has spurred much of the conversation about a market cool-down.
But there is one important thing to remember - our real estate market over the past few years was the exception, not the rule. Average days on market for a listing in Redwood City in May '15 was about 11 days. Now it's about a week longer. But inventory was unfathomably low for the majority of 2015, and with our economy booming, demand was very high (as it still is today). Competition among buyers was so intense that practically every listing received multiple offer inquiries right off the bat - most of them contingency free. So yes, our real estate market has cooled off a bit from it's white hot 2015 state, but that doesn't mean it's cold. The more accurate way to describe today's market would be that it has come back down to earth (slightly). Consistently high demand fueled by a 3.3% unemployment rate will sustain high prices in the Bay Area.
We can't use last year's market as a measuring stick for this year's. Redwood City's current average DOM of 18 days sound like a long time next to last May's average of 11 days. But compared to the nationwide average of 67 days (per Realtor.com), I'd say 18 isn't too bad...
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