Real Estate Outlook for 2024

Real Estate Outlook for 2024

Alamo, California, has a small-town charm in a scenic locale near beaches and San Francisco. It is enveloped by lush, green mountains that provide breathtaking views and a host of trails for outdoor enthusiasts. An excellent school system and lively community festivals complement the quiet lifestyle here. These characteristics attract families and investors seeking a balanced and enriching lifestyle.

Alamo's seller's market

In the past year, Alamo was a seller's market, a scenario where demand exceeds supply, giving sellers the upper hand in negotiations. Property listings often receive multiple offers, sometimes above the asking price, and homes sell swiftly. It contrasts with a buyer's market, where buyers have the advantage due to more available properties, allowing them more room to negotiate prices and terms.

For sellers in Alamo, past market conditions meant they could leverage the high demand to secure favorable sale terms. Conversely, buyers faced stiffer competition and needed to act quickly and decisively to secure a property in this desirable area.

Alamo's dynamic housing market in 2024

As of February 2024, the median sold price in Alamo has adjusted to $2 million, reflecting a 19% decrease from the previous year, signaling a potential cooling phase or adjustment in local market expectations. Despite this dip, homes in Alamo continue to fetch more than their listing price, with an average sale-to-list price ratio of 101.9%, indicating sustained demand. Properties are selling rapidly, averaging just nine days on the market.

In contrast, the broader Contra Costa County has experienced an uptick in housing prices, with the median sold price reaching $850,000 in February 2024, a 13.3% increase from the previous year. It suggests that while Alamo's market adjusts, the county is becoming more expensive overall. This regional trend is mirrored at the state level, with the California median house price now at $793,600, while the national median selling price in the U.S. was $417,700 as of the fourth quarter of 2023. These figures underscore Alamo's position as a premium market within both the state and national contexts.

Comparative insights

Alamo's real estate dynamics can be better understood by examining the trends in nearby areas. In February 2024, Danville reported a median sold price of $2.10 million, marking a 9.8% increase from the previous year. Homes sold slightly over the asking price with a sales-to-list price ratio of 100.6%. Properties in Danville stayed on the market for an average of 12 days, indicating a relatively brisk pace of sales.

On the other hand, Walnut Creek experienced a slight decrease in its median sold price, which stood at $1.45 million, down 2% from last year. However, properties in Walnut Creek are fetching above their asking price with a list price ratio of 104.8%. Homes are selling quickly, with a median of just eight days on the market.

Lafayette had the most substantial growth among the three, with its median sold price up a remarkable 31.9% from the previous year, landing at $2.48 million. The sales-to-list price ratio in Lafayette held steady at 100%, and homes also moved swiftly, matching Walnut Creek's median of eight days on the market. These figures reflect varying investor confidence and market conditions in each area, offering potential valuable perspectives on where investors might focus their real estate activities.

Inventory trends

In February 2024, the number of active listings in Alamo was 15, a slight decrease of 6.2% from the previous year, suggesting a tightening in the availability of homes for sale. Despite this constrained inventory, the market saw a substantial increase in sales activity, with seven homes sold during the month — representing a significant 75% increase from the previous year. This surge in sales indicates a growing buyer interest and possibly an emerging sense of urgency among prospective homeowners.

Additionally, approximately 26.7% of the homes sold in February did so at reduced prices, reflecting some negotiation room for buyers despite the competitive market. This price adjustment might signal a strategic response from sellers to attract buyers in a market where the price points may be reaching a peak or to expedite sales amid fluctuating market conditions.

Investment opportunities in Alamo and surrounding areas

In Alamo, a relatively small portion of the housing market caters to renters, with only 8% of homes classified as rental properties. This scarcity highlights a potential niche for real estate investors looking to serve the rental market. Understanding rental trends in nearby cities provides valuable insights for those considering investment properties.

In Walnut Creek, the average rent for a two-bedroom home is $2,110, a 12% decrease from the previous year. This reduction suggests a softening rental market, which could allow investors to purchase rental properties at lower prices before a potential market recovery.

Conversely, Danville presents a more stable rental scenario. The average rent for a similar two-bedroom home is $2,275, only slightly down by 1% from last year, indicating relative market stability and consistent tenant demand.

On the other hand, Lafayette has seen a slight increase in rent, with the average two-bedroom home renting for $2,560, up 1% from the previous year. This upward trend suggests a healthy demand for rental properties, potentially yielding higher returns for landlords.

With the low percentage of rentals in Alamo, entering this market with competitive, well-located rental properties could fill an underserved demand, potentially yielding significant investment returns.

Timing the market

Presently, mortgage rates are closely tied to inflation rates, and while both are expected to decrease, significant changes are not anticipated in the near future. This stability in mortgage rates can benefit buyers considering entering the market, as it provides a predictable expense framework for new mortgages.

Historically, home values have shown a strong appreciation capacity. Notably, even during the downturns of 2008 and 2009, home values rebounded within a year, underscoring the resilience of real estate investments. National home values have been trending upward since 1965. Although the pace of value doubling slowed after 2000 — taking until 2017 to double again — this long-term growth pattern highlights the potential for significant returns on real estate investments.

For buyers, the current economic landscape and the historical appreciation trend suggest that investing now could lead to substantial future gains. Sellers, having benefited from past value appreciations, are in a favorable position to capitalize on their investments, particularly in high-demand areas like Alamo. In summary, both buyers and sellers have compelling reasons to engage with the market at this time.

The value of expertise

When buying or selling real estate in Alamo, partnering with an experienced local real estate agent like Jill Fusari can be invaluable. Jill excels in creating effective, personalized action plans tailored to meet the unique needs of each client. Approachable and down-to-earth, Jill builds relationships with clients that foster trust and confidence, making her an ideal guide through any market conditions, always striving to get the best deal for her clients.

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Jill Fusari has been a top real estate agent in the Alamo & Danville area for over 17 years and has amassed a renowned class of clientele and unmatched experience.

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