Despite significant negative economic effects from the Iran war – rising interest rates; volatile financial markets; soaring oil and gas prices; and fears of increased inflation – Bay Area real estate markets saw relatively little impact in March. What effects that occurred usually landed more heavily on less expensive markets more sensitive to interest rate increases. It is also possible that some sellers may have delayed listing their homes as they waited for more clarity regarding economic conditions. But so far, there has been no reaction comparable to what occurred last year with the tariff shock, and as of April 8th, virtually all economic indicators were turning in positive directions with the cease fire announcement.
Moving into spring, the number of listings going into contract climbed significantly month over month and year over year – but the number of listings on the market fell dramatically from last year. As buyers competed for a reduced supply of homes for sale, the absorption rate and overbidding increased, listings went into contract faster, and price reductions declined from last year. This pressure of demand may lead to increased price appreciation in the second quarter. As has been the case for the last 2 years, affluent markets remained more heated than less expensive markets, and house markets considerably stronger than condo markets.
