Fall Edition Market Update

Happy Thanksgiving to all of you from Hatch Realty Group. 2021 has been a landmark year for us and we couldn't be more grateful. Despite the fact that we still can't shake this global pandemic, we've had so many blessings this year - 2 new babies, with one on the way, a couple new members to the team and a killer sales year. Our theme for 2021 has been about life balance and collaborating to help each other reach their goals and it has made us closer and more productive than ever. Last month we celebrated reaching our annual goal of $100,000,000 in sales by Q3 with a suite at the Giant's game and we're still going very strong - tracking to reach more than $120,000,000 in sales by the end of 2021, all thanks to you, our clients and friends who have supported us with your business and referrals. This year alone, we've helped 107 families reach their real estate goals and we are so thankful for that trust and the opportunity to help make a positive impact in people's lives.

As for the real estate market, it just continues to exceed expectations in the entry level and mid-level price points for single family homes in the Bay Area. Usually the fall and winter months start to slow down, but selling this winter is proving to be a good decision for sellers with little to no inventory available to compete with. 40-60 visitors per open house and multiple offers within a week of being on the market is the norm for homes under $2M in the Peninsula and Santa Clara County, $1.5M in the East Bay and under $1M in Solano and Napa Counties. One of our colleagues who held an open house last weekend in San Bruno said, "it feels like black friday over here," when describing the activity. We were contemplating waiting until after the holidays to list, and the sellers are super happy that they decided to list.

The condo market, on the other hand, is still a bit soft, so there are some good deals to be had with that product. Condo prices in most areas have not rebounded yet so if you're looking for a condo in SF, the Peninsula or in Santa Clara county, you can pretty much have your pick and likely not have to worry about bidding wars like in the single family home market. Prices for condos remain in 2018 levels (or lower), whereas single family homes have gone up about 20% this year all across the board.

The demand for new construction in cities like Oakley, Santa Rosa, Antioch, Brentwood, Lathrop and Sacramento, on the other hand, is at a peak. Waiting lists for homes are months out and even after buyers are able to secure a property, by the time the home is built, they have about 10-15% in equity as the builder continues to increase their prices at every release. Demand, coupled with rising construction costs and lags in supply chain are driving up the price, but people are still lining up in droves to get their piece of the pie. The demand is so high for new construction that builders have reduced their commissions from 3% (this time last year) to either flat rate referral fees (1%), or even getting rid of broker cooperation all together ($0 Lennar homes) because they don't need help from realtors to sell their homes. Hindsight is 20/20. Looking back, I wish I had bought a new construction in one of these areas last year when the builders were offering full commission and incentives to boot. One of our clients was up $100k on a $500k property by the time she got her keys after waiting a year for her home to be built in Antioch. The tables have turned quickly in a year for these builders. A huge part of it all is definitely inflation, but nevertheless the market is on the rise and unfortunately if you are not in the game, you can easily get left behind.

Multi-residential properties are also now taking a turn for the better as the state eviction moratorium is up. Landlords can now evict their non-paying tenants, remodel their properties and either sell for top dollar or garner market rent for their refurbished units. Occupied properties remain a challenge to sell, especially in San Francisco, but would-be investors are trickling in as they look for something tangible to invest their stock gains. Rents are also slightly up as those who went back home at the start of the pandemic are now re-entering the rental market as some businesses slowly start to open up.

My prediction is that December through January is finally going to slow down a bit but not because of demand. It will be more due to the lack of inventory as sellers will now likely wait until the spring to list. There's talk of rising interest rates, but my prediction is that the interest rates will still remain relatively low through the first half of next year.

If you have specific questions about a particular market, please feel free to reach out. We would be happy to send you a free market analysis of your desired location. If you have a home to sell, our Hatch Home Improvement program pays for all the upfront costs to get your property ready for sale, so if you are thinking of selling and don't know where to start, please give us a call.

HAPPY THANKSGIVING!!

Sincerely,

Monica Sagullo and Hatch Realty Group