Let’s continue looking at what’s happening with Lafayette CA homes for sale by drilling down into the data by market segment. As I’ve always said, it is potentially misleading to draw conclusions from a thin set of data, so let’s enhance our chances of accurately assessing trends by including the Orinda real estate market for this post. Orinda’s market behaves very similarly to the Lafayette real estate market, although it has been our experience over the last several years that Lafayette is winning the popularity contest. Obviously, personal preferences may vary, however the charming development in downtown Lafayette has helped make our town a very, very popular place to live!
Demand for Homes for Sale in Lafayette CA Varies by Segment
Given the fact that the trends in the two neighboring towns typically mirror one another, let’s see what we can discover as we look at the market by price segment. Beginning with prices under $1.5M, we see that demand is literally outstripping supply by a considerable margin. In fact, based upon the market’s leading edge indicator of pending sales, there was only about 2 weeks of inventory in this segment during the month of March. If you are a buyer looking in this price range, I’m sure that your experience was extremely frustrating. Fortunately, relief may be on the way.
Moving up market, it used to be that $1.5M was a major threshold point and that Lafayette CA homes for sale above that price would take considerably longer to sell due to diminishing affordability. That’s really not the case any longer, now that our March median price hit $1.4M. Homes in the $1.5M – $2M segment were clearly in high demand during Q1 of this year! Sure, there is more demand under $1.5M, however relative to inventory, the picture is not substantially different if you are in the next tier up.
Demand for Lafayette CA Homes for Sale Tapers at About $2.5M+
So, if age 50 is the “new 40”, and 40 is the “new 30″… I guess $2.5M is the “new $2M” for Lafayette CA real estate! We used to see reticence among sellers to cross over the $2M line from a pricing perspective, and buyers also would pull back and hesitate to climb over into its more rarefied air. Well, I believe that barrier is now shattered and the new one is $2.5M. If we take a look at the segment of $2M – $2.5M, it looks pretty healthy and a lot like its former self below $2M.
The market above $3M is still rather “rarified air”, yet a third of the six homes up for sale in this segment went pending in escrow in March! Where’s the money coming from? Just look to the west and focus in on San Francisco where our booming tech economy is creating vast amounts of equity and the City’s crazy real estate market is pushing people out to explore our beautiful Lafayette CA real estate!