There were almost too many local, national and international political, economic, social and ecological factors impacting the 2018 market to count. In the first half of the year, market conditions were very hot, and there were strong year-over-year appreciation rates. Come summer/early autumn, real estate and financial markets began to shift distinctly cooler. Looking at 2019, there are many wild cards whose impacts are difficult to predict: extremely volatile financial markets, fluctuating interest rates, contentious national politics, international trade issues, spiraling debt levels, employment growth – and a dramatic surge of local high-tech unicorns that plan to go public, which could create a tsunami of new wealth in the Bay Area.

Annual Median Home Sales Prices

In 2018, the median house sales price increased by 5.2% or $65,000.

Quarterly Median Price Changes

On a quarterly basis, the median house sales price peaked in Q2 and then declined in Q3 & Q4: Note that this is not an uncommon dynamic in previous years as well. The percentage year-over-year quarterly appreciation rate (second chart below) has been stepping down since late last year, but remains positive.

Home Sales Breakdowns

Appreciation Trends by City

Below are appreciation trends for 8 of the 9 communities we include in the Diablo Valley and Lamorinda newsletter. Diablo is not charted because it has so few sales that its median sales price jumps up and down on annual basis without much reference to changes in fair market value. However, Diablo typically has the highest median house sales price in the region.

Luxury Home Sales

Selected Market Indicators

Many of the market indicators reflect the huge role seasonality plays in the market, whether measuring inventory or demand. Conditions have definitely cooled since the height of the spring selling season, as is common, but many of these statistics do not show dramatic changes from recent historical trends. However, price reductions and expired, no-sale listings have increased, and the sales price to original list price percentage has dropped, clearly indications of some changes occurring. December and January are the two lowest-activity months of the year, and we will probably have to wait until the early spring market begins for more insight into where the market is heading.

After climbing significantly through November, interest rates have been dropping since then, through the first week of January, which is good news for both buyers and sellers. However, rates are still much higher than the lows seen in the last few years.

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Compass is a licensed real estate broker (01991628) in the State of California and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdraw without notice. No statement is made as to accuracy of any description.