What does 2023 have in store for Bay Area Real Estate?

The Bay Area is like no other market in America.

  • Mortgage rates more than doubled, increasing at the fastest pace in more than 40 years from just 3.2% only a year ago to 6.5% today. This has caused many Bay Area neighborhoods to slow considerably with buyers on the sidelines and sellers not being ready to list yet.
  • The value of many people’s personal portfolios across stocks, bonds, crypto, and other assets are down considerably over the last year.
  • Stock market investors quickly shifted their focus from investing in companies that were defined by their growth profile to investing in companies defined by their profitability profile. At Compass, we  swiftly responded to this shift as we look towards being free cash flow positive in 2023.
  • Many expect a recession in 2023: we have to be prepared for this possibility by being prudent, always with an eye to the future as all markets and neighborhoods recover.

Now that we understand the macro-economics behind today's real estate market, buyers and sellers alike are now shifting their focus to adapt to a new, buyt familiar reality. The Bay Area is like no other market in America. Recessed markets have helped define us and during every economic challenge, we have emerged stronger and more robust than before. It's in our DNA. We have watched our economy grow and expand with each and every downturn. The entrepreneurial mindset of the Silicon Valley, in addition to our bio-tech dominance attracts the type of intellectual capital that refuses to give up. 


That not only applies to our local economy, but to the acquisition of new homes during this market slowdown as well. Pre-Covid, buyers bought everything just to get into real estate regardless of the condition of a home. Today, more people have revised their priorities and are flocking to undeniable quality, including quality advisers they trust, supported by quality brands they believe in. We are seeing this in our industry as Compass as a firm is outpacing competitors in the industry. 


Home quality and appearance is so important that more and more sellers look to our Compass Concierge program to help them remodel their home to today's buyers standards. Buyers are now flocking to homes that are move-in ready. With interest rates at the highest in over a decade, buyers don't want the additional cost of a home improvement stretching their budgets, not to mention the time, planning and painstaking inconvenience of living through the mess of a remodel. Remodeled homes attract more buyers at open houses and result in higher offers. 


While these times may be challenging, Compass and the Palermo Properties Team have navigated challenges every year and we know how to overcome them. The challenges we face now are simply different. But moments like this are when great agents and great companies separate from the rest. Because of the investments we’ve already made in support, technology, culture, and expanding to new parts of the Bay Area, we are seeing the distance between us and our competitors continue to grow.


Give us a call today and let us show you how you can succeed in your own real estate transaction, whether you are a buyer or seller in 2023. 


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If you are a buyer, you will get unparalleled service. From personal home tours to daily updates of new homes or price reductions, we will find the perfect home for you. We have access to a plethora of available homes and are members of all Northern California listing services as well as off market properties.

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