Pleasant Hill Real Estate Agent Talks Market Trends - Fall 2018

Is the real estate market in Pleasant Hill going to turn into a pumpkin now that fall is here?

While it’s impossible to tell the future with any amount of certainty... many real estate experts agree.

...we’ve seen significant changes to the market in Pleasant Hill just since earlier this year.

Here is our latest report for Spring 2019

PLEASANT HILL REAL ESTATE MARKETS PAST

For several years now we’ve seen significant growth in the real estate market, home prices have been rising at a rate that has spooked many buyers away recently as mortgage rates rose throughout the year.

On the flip side many potential sellers feel entitled and have grown accustomed to bidding wars and tip top selling prices, and are not willing to accept that the market has softened a bit.

Homeowners have benefited from significant appreciation and many are well above what they purchased their home for in the last 10 years or so.

Currently in Pleasant Hill the median home value is about 18% to 20% higher than the last market peak around 2006 before the "great recession"

PRO TIP: A very successful Bay Area real estate investor I know and learn from has told me that when the current market is 20% higher than the last peak... THAT'S when he starts to be "very careful" about what he buys.

Massive home appreciation is obviously great news if you are a homeowner that is staying put for the long haul and looking to raise a family here in Pleasant Hill.

Not all of the news is great for buyers and sellers though.

Last year at this time potential buyers were out in droves competing like crazy over a very tight amount of inventory on market.

Low mortgage interest rates (mortgage rates were about 1% lower a year ago than they are now.) and the fear of continued appreciation has pushed many buyers to feel like they needed to buy their home now or else be priced out of the bay area market forever.

Does this sound familiar?

If you've seen a few market cycles you know that this was the prominent sentiment that drove markets up in the early 200s as well.

However we've witnessed this trend of buyers doing whatever it takes to get a home cooling off significantly upon several interest rate hikes performed by the FED starting in late 2017 with two more rate hikes expected by the end of 2018.

Higher interest rates translate to higher mortgage payments for borrowers and knocked many buyers out that were already stretching to afford their pre approved payments.

As a result we’ve seen many buyers hightail it back in to the rental market... and many are already tied up in leases, which will likely eliminate them from buying at all until those leases are up.

Two main factors have driven several buyers out of the Pleasant Hill marketplace.

1. Number one being higher interest-rate‘s
2. Number two would be buyers fatigue.

Buyers fatigue occurs when there are too many people competing for a small amount of inventory all of the competition and wild over bidding has proven to get tiring for the lower end bidders, and many decided that timing is wrong for them or the costs were just too risky being that there has not been any real estate correction for almost 10 years now.

Summertime 2018... which is normally a hot time for buyers to be out in droves, and a time for sellers excited to put our home up for sale ... we noticed just the opposite this year.

Summertime inventory remained steady but did not increase very much at all.

Many of the buyers that were out hustling to buy a home the previous year through their arms up and quit because of the frustration with mortgage rates and buyers fatigue.

Now that we are going into the fall what do we see?

More and more sellers are scrambling to put their home on the market right away.

Pleasant Hill Inventory is slightly raised from this time last year, with more and more price reductions, while sales volume and mortgage pre approvals are down.

We are seeing more and more price reductions in the Pleasant Hill market and Properties that are not properly priced have been sitting on market considerably longer than residence of Pleasant Hill have grown accustomed to.

According to Redfin... Sellers are feeling compelled to adjust their expectations — and their prices. In the four weeks ending on September 16, 26.6 percent of homes listed for sale had a price drop, the highest level on record since Redfin began tracking this metric in 2010.

Many home sellers are chasing prices from earlier in the year and crossing their fingers for multiple offers and bidding prices well over asking, but are disappointed when only a few offers are in and they just barley get their list price.

The fact as the real estate market is just significantly different then it was just a few months ago in Pleasant Hill.

SHOULD I BUY A HOME IN PLEASANT HILL NOW?

Is now a good time for you to buy your first home?

Here's my litmus test I tell people to ask themselves in order to come to a good conclusion.

If you already know you love the Pleasant Hill and you will be planting down roots here for about at least the next 7 to 10 years, then buying a home in Pleasant Hill is a much better play than renting...

...provided that you could say yes to the following three questions.

1. YES I can absolutely afford my monthly payments on the mortgage.
2. YES I will absolutely have a large reserve fund after I purchased the home.
3. YES If a recession does hit and I lose equity I will still be happy in my home and have a great place to live that I can afford.

Those three questions above are my bulletproof litmus test on whether not you should buy real estate, regardless of how prices are, what the market is doing and how mortgage rates are moving.
I use a cool excel “calculator” sheet to estimate a cost benefit of renting vs buying here in the Bay Area.

DOWNLOAD THE RENT VS BUY SPREADSHEET HERE

SHOULD I SELL MY HOME NOW IN PLEASANT HILL?

Think hard as to your motivation for selling. Do you need to sell now?

1. If you wait until next spring how disappointed will you be off the market has softened and home prices are come down?
2. Interview a few top producing local realtors regarding your specific situation and your own micro market or neighborhood.
3. When hiring an agent to work with trust your gut first and foremost.

Be wary of an agent that is simply telling you what you’d like to hear.

Things can get very stressful if the sale does not pan out exactly the way you planned.

In conclusion...

Fall can be a great time for a buyer to take advantage of less buyer competition.

If you ever have questions regarding your specific situation we are very happy to spend time with you personally.

Thanks for reading my article and stay tuned for my next look in spring 2019

Jason Wheeler

Aspiring to be your go to Pleasant Hill real estate expert