April 2023 – Market Trends in Greater Bay Area | San Benito, Santa Cruz and Monterey Counties

 Economic data released last week showed that the U.S. economy is losing momentum as the lagged effects of monetary policy tightening slow growth as intended.( – California Association of Realtors report April 17, 2023)

Inventory might get worse before it gets better according to REALTORS®: The California Association of REALTORS®’ (C.A.R.) monthly member survey revealed that inventory could pose a challenge ahead of the spring home buying season. The percentage of REALTORS^® with listing appointments dropped for the second consecutive month, moving in the opposite direction than usual this time of the year. With less listing appointments, less properties are consequently being listed for sale as evident in the drop-off of REALTORS® reporting listing a property in April. After trending up in the first quarter of the year, the share of respondents indicating having listed a property fell to 18.3%. What is more, they became more pessimistic about listings going up as the share dropped for the second consecutive month. Unfortunately, part of it seems to be reluctance from sellers to list as the share of those holding back from selling jumped to the second highest level on record since the inception of the survey began nearly two years ago.

Consumer prices continue cooling but remain elevated: The March report for Consumer Price Index (CPI) showed prices rose by the smallest amount in nine months, but excluding food and energy (core CPI), inflation remains stubbornly high.

Retail sales slip again after unusual surge at start of the year: Consumer spending lost momentum over the course of the first quarter, with retail sales falling for a second consecutive month in March. Even with a 1.0% month-to-month drop, spending remains nearly 2% ahead of where it was back in December and close to 3% ahead of the same month of last year. This means, that consumers continued spending at an elevated level. However, the unusual surge in spending seen in January appears to be reversing and with broad-based weakness observed in the latest retail sales report, consumer spending appears to be gradually losing momentum. Furthermore, the elevated cost of borrowing is starting to also weigh on consumers’ decision to purchase big ticket items.

Consumer sentiment is hanging in there: The University of Michigan’s headline index measuring how Americans feel about their own finances as well as the broader economy inched up to 63.5 in April, up from 62.0 in March. Consumers have been broadly pessimistic since last summer when the index dropped to a record low of 50, largely due to high inflation. However, as inflation has gradually eased, both the current and future conditions components of the index improved. Despite short-term inflation expectations (one-year ahead) unexpectedly jumping a full percentage point to 4.6%, suggesting that consumers expect inflation to persist a little while longer, long-term expectations (5-10 years ahead) held steady at 2.9% for the fifth consecutive month.

Monterey County Real Estate Market – April 2023 (Aculist) from Lynne Watanabe-MacFarlane

If you’re interested in a specific city in one of these California counties, contact me and I’ll be happy to assist you and go over the trends.

Lynne Watanabe MacFarlane, Realtor 

Intero | Berkshire Hathaway affiliate

Seller Representative Specialist (SRS)

Senior Real Estate Specialist (SRES)

Master of Communication Digital Media | Marketing (MCDM)  from University of Washington

Professional Fiduciary Assoc. of California, Silicon Valley Chapter affiliate (PFAC member)

408-800-1141 Bay Area

831-346-2743 Monterey Bay