Bay Area mixed home prices: what to know

Homebuyers are having second thoughts as high prices and rising mortgage rates put pressure on the California housing market. In the Bay Area, pending home sales are down compared to a year ago. Redfin reports pending sales fell 8.3% in Oakland, 7.8% in San Francisco, and 3.5% in San Jose. But prices are telling different stories here. San Francisco's median sale price reached $1.69 million. That is up 14.6%, while San Jose prices are up 3.4%. To expand on the current housing market and a demographic that continues to drive homeownership, we welcome Erika Carrasco with Internal Real Estate. Erika, thanks for joining us this morning. Thank you for having me. All right, so interesting stuff here because we saw that interest rates are very high right now. And one number that I saw here, in terms of cancellation rates for contracts here, California is at 2.8% in San Francisco, 17.4% in Riverside County, and 14.5% nationally. Why is the cancellation rate for contracts so low here in the San Francisco Bay Area? Huge gap. Massive, yeah. Yes. So that's good. I mean, that's good. One of the great needs for our people here locally is because we see so much jobs, a lot of more activity. Everybody wants to move into our area. We're so spoiled to be here in the Bay Area. it's a privilege to live and especially for those homeowners equity went up in certain areas we cannot compare down south than here in the silicon valley yeah i mean riverside county 17.4 percent people backing out of their contracts can you see the difference 17 percent to two percent yeah 2.8 and nationally 14.5 percent i do want to ask you about interest rates though for mortgages because those are very very high right now and conceivably when you look from the outside you're like, well, I don't want to even bother with buying a house because those interest rates are crazy. How are you seeing that affect the market? And is it negatively or here in the Bay Area? Well, let me just tell you, the highest rate that we see is seven point five. But since last two weeks, we see the interest rate decreasing. But yes, it's affecting. But at the same time, it's great news for some of the buyers do not focus a lot on the interest rates. Rates are negotiable. We have some seller concessions that can help the buyer reduce their interest rate up to 3% for three years. Seller concessions, even on houses owned by a person, there's a concession that the seller can offer? The seller wants to sell the house because we see a lot more inventory. So seller wants to give a credit to our buyers and our buyers getting rates for three years lower up to 2%. Up to 2% lower than the 7.2%. For example, if it is 7.2%, they can get up to 5.2%. Okay. So that's the better news. I didn't really completely understand how that worked, but just because the national average is higher doesn't mean that if you go to buy a house now, you can't get a concession that can bring your rate down considerably. Correct. Right now, the market is on the buyer's side. So I highly recommend the buyers to don't get discouraged. It's always to talk to the right person and do the right negotiations. Remember, sellers can give credits to the buyers and that can work on the buyer's advantage. Let's talk a little bit about Latino purchasing power for buyers and business owner actively looking in the Bay Area. How is the Latino home buyer shaping the market that you serve? That's a great question. In the last year, we see an increase for 11 percent. So we see the Latino community coming out and is still very active in the real estate market now these days. That's interesting. What do you think is leading to that? How are they able to? The rents. The rents are, what do you mean? Yeah, they're paying so much higher rents right now. So because of the rents are higher, they don't want to keep renting. They rather talk to their son and buying together with their family. So they're pooling resources. That way they can own a home. And instead of renting, they're putting all the money together to buy the houses. Wow, that is really interesting. Talk about Bay Area cities where buying is still a possibility right now. Because I know a lot of people want to know about that. Because San Francisco is tough for the average person that doesn't have a nice tech job. They're just working a regular job like everybody else. What were the best places to look at buying right now? Affordable, Hayward, number one city. Hayward, okay. Yeah, it's still affordable. We just closed a deal for $680,000. Wow. Oakland, we have a house for $689,000 plus an addition, completely remodeled. So I think those prices, they're really good prices for the Bay Area. Wow, that is pretty good prices for the Bay Area. What about San Pablo? San Pablo, you can get a house around $550,000. Wow, still. Still. Wow, I thought those prices were long gone by now, but apparently they're not. We really appreciate your insight. Erica Carrasco with Internal Real Estate Group, thank you so much for your insight and for giving us kind of a sneak peek behind the curtain and showing how there's a possibility there that you could probably get in on the housing market in the Bay Area. Thank you. All right, appreciate it. All right, we're going to take a quick break here on Mornings on 2 at 8:40. We'll be back right after this. Stay with us.