In examining the combined data for Alameda and Contra Costa County, Single Family Homes, it is evident that the median sale price has experienced a decline from $1.325 million in May 2022 to $1.135 million in May 2023.

However, contrary to what might be perceived as good news for buyers, the situation is not as favorable as it initially appears. The average 30-year fixed interest rate at the end of May 2022 stood at approximately 5%. This equated to a principal and interest (P&I) payment of $5,690 per month for a median-priced property ($1.325 million) with a 20% down payment. In contrast, today's median-priced property of $1.135 million, with an average interest rate of around 7% (roughly), would result in a higher P&I payment of $6,041 per month (calculated with 20% down).

When considering these figures, it becomes apparent that although the median sold price decreased by 14.3% from May of last year to May of this year, the monthly mortgage payment has increased by 6.2%. Consequently, prices today are higher than during the same period last year.

Nevertheless, there is a silver lining in the form of potential refinancing opportunities. As interest rates decrease, homeowners can refinance their mortgages, reducing their monthly payment burden while having already secured a property. Additionally, a decrease in interest rates tends to attract more prospective buyers.

In summary, despite the decline in the median sale price, the increase in monthly mortgage payments suggests that the current housing market conditions may not necessarily favor buyers. However, the possibility of refinancing and the potential for future lower interest rates could provide some relief and attract more buyers to the market by increasing the property values (assuming inventory does not increase substantially).

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https://girishbangalore.agent.intero.com/2023/07/04/market-update-july-2023-alameda-and-contra-costa-counties-combined