Over the past two weeks, I've been asked two questions that are very much connected:

• "Are you seeing significant impacts from the various economic issues that have arisen in the last month?"
• "With Patrick Carlisle, Chief Market Analyst for the San Francisco Bay Area at Compass, calling out San Francisco's frenzied market in his latest report, are you seeing any of that in Lamorinda and your expanded East Bay market?"

Here's my answer to both.

Yes, and it's nuanced.

The same macro forces driving San Francisco are very much at play here. Rates are holding in the mid-6’s, geopolitical uncertainty is creating emotional volatility in the market, and the AI sector, which is fueling much of Bay Area activity, has its own storyline unfolding. Equity market swings are rattling confidence even though the S&P is only modestly off recent highs. It feels bigger than the numbers suggest.

What's distinctly different about Lamorinda is our inventory problem. The number of listings in our market is down 27% year over year, and demand is running well ahead of what's available. Hunter Marckwardt of CrossCountry Mortgage puts it plainly: "We're seeing a 50% increase year-over-year in pre-approved buyers actively looking, yet the number of homes available hasn't kept pace. Rates are still about 0.50% lower than they were this time last year, which continues to support buyer purchasing power."

From my observations, one group in particular is especially motivated right now: move-up and move-around buyers who locked into a 5/1 or 7/1 ARM during COVID. Their rate is adjusting regardless of what they do, so waiting doesn't help them. That's been a real driver of activity in our market.

On the seller side, the uncertainty did give people pause. We saw a noticeable stall in March, which has a downstream effect: April and May could bring a meaningful surge in new inventory. For buyers, that means more choices. For sellers, timing matters more than ever. The ones who are moving now, just ahead of that wave, are putting themselves in the best position.

And if the geopolitical picture improves, rates have real room to move down further. San Francisco's energy is spilling into the East Bay, but Lamorinda's story is still being written by a supply-demand mismatch that isn't going away soon.

As always, Lamorinda keeps us on our toes.