When the market starts to transition, it can happen quite abruptly. (Read my quote on this and more in the SF Standard.)

The recent triple-whammy of rising mortgage rates, tumbling stocks, and fresh economic uncertainty has rapidly changed the calculus for anyone looking to buy property.

You might be wondering where you stand with respect to the market and your goals. If you have questions about your options, please don’t hesitate to reach out. We are here to consult on your situation and help make the best decision that’s right for you. That said, there is room for optimism in this real estate market.

For one thing, real estate isn’t the problem this time. Unlike back in 2007, today’s ratio of mortgage debt to disposable income is very low. A Great Recession-style crash is unlikely, though we already seem to be in some kind of correction.

And (this may sound crazy) mortgage rates are still pretty good. What do I mean? Well, in my 20+ years experience, buyers here in SF use ARM products far more often than the archetypal 30-year, fixed-rate loan. The average 5/1 ARM is closer to 4% right now—not too shabby.

We are not in the predictions business.

However, taking a cue from other corrections of the past 40 years, we might be due for a period of flat appreciation, or perhaps a price adjustment of 5–10%.

This is hardest on sellers who bought recently, with values back to what they paid, or in some cases even lower. It’s easier on longer-term homeowners who enjoyed 25% appreciation over the past half-decade.

We can’t tell you how to perfectly time the market (no one can, except by accident). But there are few who regret buying Bay Area real estate after 5 or 10 years.

Real estate is personal, so please don’t hesitate to reach out with questions. As always, we are happy and grateful to help you and anyone you send our way!


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Bay Area Real Estate News & Culture

Five charts explaining why inflation is at a 40-year high – Washington Post

It’s official: Bay Area home values are finally going down – SF Chronicle

Why Mortgage Rates Matter For Cash Buyers Of Houses – Forbes

What’s Up With the Crazy Housing Market? – New York Times

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