Market Report: Dual Dynamics of Declining Sales Volume, Soaring Prices

Two residential real estate trends stood out in the East Bay in November: declining inventory and soaring prices. These insights highlight just how competitive our market remains as we head into a new year with some surprising predictions – including one about Oakland being the country's hottest market.

Decrease in number of homes sold in November

Multiple East Bay cities – including Alameda, Castro Valley, Concord, Lafayette, Moraga, Orinda, Pleasant Hill, Richmond, and Walnut Creek – experienced a decline in the number of homes sold compared to November 2022. Not a big surprise here since this has been a year-long trend since interest rates began climbing.

Contra Costa County has taken some of the hardest hits when it comes to an inventory shortage. In Lafayette and Pleasant Hill, for example, there were 46% fewer homes sold year-over-year in each city.

Increase in percentage of homes sold over list price

Despite the decrease in the number of homes sold, many cities – including Alameda, Albany, Berkeley, Castro Valley, Hayward, Oakland, San Leandro, Alamo, El Cerrito, Concord, and San Ramon – saw an increase in the percentage of homes sold over the list price.

Scratch that. It's not "despite." It's BECAUSE of the decrease in the number of homes sold that we saw more homes selling for over the list price. Competition among buyers remained strong in November and will stay strong as long as we have fewer homes for sale than buyers.

Statewide, 2023 has been the least affordable year for home buying on record. According to Redfin data, a homebuyer with the median U.S. income had to spend a record 41% of earnings on monthly housing costs in 2023 compared to 39% in 2022.

If you're considering a move to somewhere less expensive, maybe consider Austin, TX. It was the only major metro market that became more affordable in 2023 than in 2022, according to Redfin.

What lies ahead in 2024

Will Oakland be the country's hottest real estate market?

According to GoBankingRates.com, Oakland is one of the hottest places in the country to buy a home. Are you surprised?

GoBankingRates.com went looking for places where Americans are buying and selling homes most, considering median sales prices, average days on the market, number of homes sold, and how many properties sold over the list price. Its analysts found Oakland.

Oakland can get a bad rap, mostly because of its crime pockets. But as David Stark with the Bay East Association of Realtors recently told KRON, Oakland has a lot going for it: proximity to job centers in San Francisco and Silicon Valley, access to recreation in the Oakland Hills, and fantastic individual neighborhoods. Plus, Oakland's home prices are more affordable than some of its neighbors.

The median price for a detached single-family home in Oakland in November was $1.05 million, compared to $1.3 million in Alameda, $1.47 million in Berkeley, and about $1.14 million in San Francisco.

See more details below about Oakland's real estate market.

Will interest rates drop, making 2024 more affordable for home buyers?

The Mortgage Bankers Association recently issued its forecast: Mortgage rates will decline over the next two years, decreasing from the 7% range currently to the low 6% range by the end of 2024 and falling to under 6% in 2025. If rates continue to ease, more buyers and sellers may hit the real estate market in 2024.