San Ramon, California, is located in the Tri-Valley Region in the Bay Area. Located a short drive from Oakland, San Francisco, and San Jose, San Ramon is a great location for those seeking beautiful views, luxurious homes, and relaxation, all while being close to major cities. San Ramon is known for its stunning new construction. San Ramon homes for sale are largely new, modern builds and have all the amenities buyers could want. The town regularly invests in itself to keep up with the burgeoning real estate market, with modern upgrades such as outdoor malls, shopping plazas, green spaces, and updated amenities.
San Ramon is an area in high demand, with families that enjoy the amazing schools in the area as well as other demographics coming for the warm weather of California and beautiful homes. If you’re looking to enter the San Ramon real estate market in 2023, you’ll want to understand the major trends predicted for the market. Our guide will break down the major trends to expect, what’s causing the changes, and how you can prepare.
Major trends
The first major trend happening, not just in San Ramon but also in the rest of the country, is declining home sales. According to the National Association of Realtors, national home sales have declined 19.9% from August 2021 to August 2022. From August 2022 to September 2022, home sales declined another 0.4%. In the West, the National Association of Realtors reports that home sales declined by 29% between August 2021 and August 2022. This trend is predicted to continue in 2023. The California Association of Realtors predicts that home sales will decline by 7.2% in 2023. Overall, home sales are expected to continue to decline from 2022 into 2023.
Another major trend in the 2023 San Ramon real estate market is the stable but slowing home values. Between 2020 and 2022, home values skyrocketed, and real estate was a hot commodity. Despite slowing home sales, prices are still increasing, although more slowly than what we have seen previously.
In July of 2022, Chief Economist of the National Association of Realtors, Lawrence Yun, created a report detailing a prediction of a 2% increase in median home prices in the rest of 2022 and throughout 2023. Many experts agree that although home values are slowing, they will continue to increase throughout 2023.
Causes
One of the major shifts in declining home sales is the increased mortgage interest rates. In 2020, the real estate market saw some of the lowest interest rates ever, with values as low as 2.65% as of December 2020, according to Freddie Mac. These values remained low into 2022. However, at the start of 2022, the 3.22% increase rates seen in January started to rise. By April, the interest rate on a 30-year fixed-rate mortgage was 4.72%. The mortgage rate continued to increase as the Federal Reserve tried to cool the market to fight inflation. As of the end of October 2022, the interest rate on a 30-year fixed-rate mortgage was 6.94%. This staggering rate has discouraged many borrowers that would require financing.
Another major factor driving the San Ramon housing market is inflation. Inflation has risen for several reasons, including increased demand without supply during the pandemic, supply chain shortages, and rising fuel prices due to the crisis in Ukraine. Inflation has had several effects on the real estate market. First, inflation has caused the Federal Reserve to increase interest rates on home mortgages, which decreases demand. As mortgage rates rise, houses become less affordable, and with a competitive market, this decreases the pool of buyers that can afford existing properties. Second, rising inflation also increases the cost of living. This can lead to reduced savings and decreased ability to afford a home. Over time, it may mean that more potential buyers choose to rent, rather than buy a home, again leading to the decreased sales we’ve seen in the past year.
What it means for you
If you’re a prospective buyer, your outlook depends if you are going to be financing your home or paying cash. Cash buyers have an advantage, as demand slows, there will be more inventory available. However, for buyers that are financing, mortgage rates will continue to remain high into 2023. For sellers, it's important to be patient as the market shifts. There will be fewer buyers due to the high-interest rates on mortgages for the next year. However, as inflation cools, mortgage rates will return to lower levels and buyers will return. In addition, there are still plenty of buyers currently, the market just isn’t as intense as we’ve seen in the past two years. Patience is key here.
Work with an experienced real estate agent
If you’re looking to buy or sell a home in the San Ramon housing market, you’ll want to work with a great realtor. The Khrista Jarvis Team is one of the best in the Tri-Valley area. Khrista Jarvis and her team are experienced and offer world-class customer service to ensure their clients meet all their real estate goals. If you’re ready to tap into the San Ramon real estate market, Khrista is ready to help.
