2023 Real Estate In Perspective
Updated: Jan 2
There is always something to worry about. It is easy to succumb to the seemingly endless challenges that we face in our world and our community and start to believe that the grass is always greener somewhere else. In 2022, I had a front row seat to witness the exodus of those who could now work or retire remotely in more idyllic locations with lower taxes, better schools, less traffic, more affordable housing and safer, cleaner streets. But I can tell you that in our local market, there continues to be many more buyers than available homes. And for those of us who have had the opportunity to travel, we often return with the realization that we live in one of the best places in the world. Perhaps this is the fundamental reason why our homes have historically held their value better than nearly anywhere else … there simply is no place like the Bay Area.
In the course of a few days, I can hop in the car and take a surf lesson, brave a day of skiing, hike a desert trail, sip fine wines in a vineyard, watch a first run theatrical production, attend a religious service of nearly any denomination, celebrate our cultural diversity, learn about an emerging new business, volunteer at a food bank that supports one quarter of our residents, dine at a restaurant serving cuisine that I have never tried, or hop on an airplane out of one of three international airports within an hour of my home.
So as the new year begins and I turn my focus back to business, I do so with renewed optimism because I know that the scarce land that our homes sit on is some of the best real estate in the world. The cost to purchase or rebuild our structures may go up or down with the varying price of labor and materials, but the location has and will continue to be impossible to replicate. Yes, prices have come down roughly 15% from the highs set in the second quarter, which quite frankly, were getting out of hand. Having worked through these cycles for over two decades I can assure you of one thing, our market will be one of the first to recover and reach new highs for those fortunate enough to own property here.
So, when asked the question “should I sell in 2023?”, my answer is simple. Everything in our area sells for the right price. Case in point, even in a slowing market, I sold $60 million of properties last year with my average listing receiving 5 offers. If you are realistic about current values (and your view is validated by your agent) and your life events dictate that a change is better made now than later or you find that “perfect” house, there will be buyers for your current home. Additionally, the option to earn 4% risk free interest on your proceeds while you figure out your next step is a bonus. On the other hand, if you “don’t have to sell” and are interested in gambling on getting a theoretical price from 6 months ago, I wish you the best of luck. It is expensive and stressful to prepare and market a home… not a process to be undertaken with unrealistic expectations.
And what about finding a bargain property to buy in 2023? To be clear, there still are no “bargains” in our market. Yet, for the first time in over a decade, buyers have some degree of negotiating power. How much and how long it will last is anyone’s guess. However, at the moment, you may be able to find a diamond in the rough at terms that don’t make your head spin. In fact, in my last sale of 2022, I was able to secure a home with an inspection contingency for my clients… something I haven’t seen for quite some time.
As I take stock of the things in life that I can control and that really matter, I feel truly fortunate for my loving family, close friends and amazing clients. I am also so thankful to my mother and late father for having the foresight to settle us in this little hamlet of the Bay Area after leaving Montreal, Canada over 40 years ago. I wish you and your loved ones a very happy, healthy and meaningful 2023.