Real Estate Trends for Walnut Creek, CA

The Single Family Home Market

This report is designed for everyone – from first-time home buyers to seasoned investors; from home sellers to home developers; from mortgage brokers to real estate professors … if you have even a passing interest in the Walnut Creek market, you’re going to find value from this report. We realize that everyone comes to the real estate market with a different background and different understanding of what influences buying and selling decisions in this part of the East Bay. That’s why we make it a point to add our own commentary around each of the housing statistics that we highlight. This serves the purpose of giving our advanced readers the stats and numbers they are seeking, while still helping our novice readers to gain a better understanding of what the statistic means and, more importantly, why it matters.

Walnut Creek’s Active Houses for Sale

The trends that we’re about to look at come from behavior in the past. Closings typically take 1 to 2 months to complete, so today’s numbers reflect buying and selling decisions made in the past few months. They help shape our current market, but they don’t totally define it. For that reason, it’s nice to start by taking a glance at what the active market looks like right now.

Inventory Level

Inventory level (or absorption rate) is a common metric that people look at to gauge whether we are in a “buyer’s market” or a “seller’s market.” The question that this metric is trying to answer is “if no new inventory is added to the market, how long will it take to sell off all the homes currently for sale?” The general rule of thumb is that if the absorption rate shows 1 – 3 months of supply, we are in a seller’s market; 4 – 6 months supply, we are in a balanced market; and 7+ months of supply, we are in a buyer’s market.
Months

Active Market Snapshot

Walnut Creek, just like all other areas of real estate, is all about location. So, even though the following pricing breakdown is informative, keep in mind that it is reflective of the city as a whole.
Most Expensive
Least Expensive
Average Price
Median Price
# Active
# Pending

Walnut Creek’s Sale Trends

5 Year Sales History

Looking at the number of homes sold over a multi-year window does a great job of highlighting real estate’s cyclical nature. Even though we’ve had some turbulent times during the past 5 years, we can still see the demand in our area is typical of so many other places across the country – sales increase as we head into summer, peaks in May, June and July and then tapers off through the remainder of the year. The red line, by the way, is showing you the average number of homes sold each month.

Year-over-Year & Month-over-Month

Real estate is cyclical; no matter whether we are in an up or down market. For this reason, it’s important to do more than just compare the last two months or quarters of activity. That’s why you will often see year-over-year comparisons like we have here (for example, September 2013 vs September 2012). This approach attempts to remove the bias created by the seasonality in the market.
Average Prices
Median Prices

Over/Under Asking Price

There are three different prices associated with each property that sells:
  • The Original Listing Price – the price set when the home first came on the market
  • The Listing Price – the current price at the time an offer is made
  • The Sale Price – the price the property was actually purchased for
From these three different prices, I like to look at the differences between the original listing price and the sale price as well as the differences between the listing price and the sale price. By doing this, we can get a sense for how much of a discount houses are being sold for.

I don’t recommend blindly using these numbers when evaluating or making an offer, but they do serve the purpose of helping to properly set expectation levels. For example, if you are selling a house and receive an offer that is 10% less than your current asking price, don’t be offended if that’s comparable to the rest of your local neighborhood. Instead, take it for what it is … an invitation to negotiate!

FYI, a positive number means prices are going over asking and a negative numbers means they are below asking.
from Original Sale Price
from Listing Sale Price

Price Bands

Looking at average and median values won’t always give you a clear understanding of the market dynamics. For this reason, I also like to look at the activity within individual price bands. To do this, I group properties based off their sales price into $100k bands. For example, every house sold between $500,000 and $599,999 is placed into the $500k band.

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