Are you thinking of buying a home in Walnut Creek in the near future? If so, you’ve come to the right place. We’ve created this guide to help you catch up with the current real estate market, mortgage rate trends, and other topics that are important to Walnut Creek home buyers.
Home Buying in Walnut Creek: 5 Things You Should Know
The local real estate market has changed a lot over the last ten years. We’ve seen home prices plummet, bounce along the bottom for a while, and then rebound. And boy have they rebounded! House values in Walnut Creek and the broader East Bay are climbing to all-time record highs.
Here are five more things you should know, before buying a home in Walnut Creek.
1. Home prices have risen—significantly.
Home prices in Walnut Creek and the surrounding area have risen sharply over the last couple of years. As we noted in a recent housing market forecast, Zillow reported a 7.8% increase in Walnut Creek home values from August 2015 to August 2016. Trulia reported a 12% increase in the median sales price, for roughly the same time period. (They have different methods for computing home values.)
According to these two sources, the median sales price in the city was around $800,000, as of August 2016. The bottom line is that houses in the area are more expensive today than they were a year ago.
If you’re planning to buy a home in Walnut Creek in 2016 or 2017, we recommend that you spend some time reviewing sale prices online. This will give you an idea of what you can buy within your budget. You can get this kind of data from Realtor.com, Zillow and Trulia.
2. Mortgage rates are still hovering below 4%, but they could rise.
According to Freddie Mac, the government-controlled company that purchases home loans from lenders, the average rate for a 30-year fixed mortgage loan fell to 3.43% during the week ending August 4, 2016.
The 30-year average rate has been hovering below 4% all year. But it could rise toward the end of 2016 and into 2017.
We recently published a mortgage rate forecast for Bay Area home buyers. In it we explained that Freddie Mac’s economists expect mortgage rates to rise gradually over the coming months. The Mortgage Bankers Association (MBA) offered a similar forecast, but they projected a more modest rise in rates through 2017.
This is an important trend to watch, for anyone buying a home in Walnut Creek. It affects your buying power and the total amount of interest you’ll pay over time. If rates do rise, it means buyers who postpone their purchases until later this year or early next might pay more for their mortgage loans.
Granted, these forecasts are the equivalent of an educated guess. But they’re a highly educated guess, offered by well-informed housing analysts and economists. So they’re worth considering.
3. The market has cooled a bit, but is still warm.
For the last couple of years, we’ve heard a lot about limited housing supply in the Bay Area, bidding wars, and purchase offers that greatly exceed the asking price. While that kind of competition is still present in some areas, there seems to be a cooling trend in the East Bay real estate market — or at least the start of one.
According to several sources, home prices in Walnut Creek and throughout Contra Costa County are rising more slowly than in months past. And this deceleration could continue into 2017.
It’s still a busy real estate market, and you’ll likely encounter competition from other home buyers. But the competition might not be as fierce as it was a year or two ago. While some agents in the area are still calling Walnut Creek a sellers’ market, it appears to be becoming more balanced.
To succeed in such a market, Walnut Creek home buyers should be prepared to make strong yet reasonable offers based on comparable sales data. It also helps to be flexible and open-minded, with regard to your housing needs versus wants.
4. There’s some new construction out there, with more on the way.
New home construction in Walnut Creek has ramped up over the last few years, and there are more projects in the planning stage. As a result, there are many new properties available for home buyers in the area. These include detached homes as well as condos and townhouses.
You can learn more about some of this new construction in the New Development Projects section of the city’s website.
The building boom is playing out in other parts of the East Bay as well. According to a recent article in The Wall Street Journal:
“Over the past year, the East Bay, which stretches 10 to 60 miles to the east of San Francisco and Silicon Valley, is tied for the fastest growth in new-home developments among major U.S. markets.” (WSJ.com, August 4, 2016)
This is why it’s good to have help from an experienced real estate agent when buying a home in Walnut Creek. You want to make sure you have access to the entire inventory that’s out there. A good agent can help you with this.
5. Mortgage pre-approval gives you an advantage.
If you plan to use a mortgage loan to buy a house in Walnut Creek, it would be wise to get pre-approved before you start shopping for a home.
Pre-approval is when a mortgage company reviews your financial situation and tells you how much they are willing to lend you. This usually happens before the house hunting stage, and with good reason.
Getting pre-approved helps you narrow down the market to properties you can afford. It also makes you more competitive, as a home buyer. Sellers will be more inclined to accept your offer if you’ve been pre-screened by a lender. This can make the difference between having your offer accepted, and having the home slip through your fingers.
Ready to get pre-approved? Contact Bridgepoint Funding today!
We hope you’ve enjoyed this guide to buying a home in Walnut Creek, California. If you have any questions about the mortgage side of things, or if you’d like to get pre-approved for a loan, please contact our staff at your convenience.