For years, Andrea and Henry Walton had been thinking about buying a home. When a house down the street from their current rental in Concord went up for sale for $750,000 this spring, they decided to pull the trigger.
For the down payment, they planned to liquidate a stock portfolio Andrea had inherited from her grandmother, valued at $250,000 at the beginning of the year.
But on April 2, President Donald Trump announced his “Liberation Day” tariffs, which sent the stock market reeling. In just a day, the Waltons lost 6% of their portfolio’s value.
“When you’re not buying in the immediate future, that’s just money on paper,” Andrea said. “But when you’re thinking about liquidating tomorrow, that impacts how much house you can buy.”
As they’ve been selling off stocks day by day, they estimate that the value of their portfolio has declined to $200,000.
“I’m feeling so helpless,” Andrea said. “How do you predict the temper tantrums that are going on right now?”
Stock market volatility has rattled the Bay Area housing market. Agents say home sales slowed in April, during what is usually the peak home-buying season, when more inventory typically hits the market. Agents will get a fuller picture later this month, when the California Association of Realtors releases its April home sales data.
“As buyers’ net worth fluctuates, it’s causing trepidation,” said Ricky Flores, a Menlo Park agent.
April was a tumultuous month for the stock market, marked by some of the largest declines since the start of the pandemic, followed by big rallies as Trump called off tariffs for some countries. Despite the major swings, the S&P 500 saw fewer losses in April than it did in March. Overall, the S&P has dropped 7% since Trump was sworn into office on Jan. 20.
On top of that, buyers are also up against mortgage rates of around 6.8% — more than double the rates many pandemic-era buyers enjoyed.
As buyers react to the economic turmoil, they’ve been negotiating on prices or hesitating to bid on homes that don’t check all their boxes, agents say.
Stock market swings made the Waltons more cautious. An inspection revealed that their chosen house would need a new roof and a foundation. Before, they might have been willing to accept that. But now, they’re trying to negotiate a lower price.
“As we lost some net cash, we felt the costs add up,” Walton said. “$20,000 is a new roof.”
Some buyers are pulling out of sales entirely. In the four weeks between March 17 and April 13, more than 14% of all home purchase agreements in the U.S. were canceled, according to a Redfin study for CNN. It’s the highest level for this time of year since 2020, when the start of the coronavirus pandemic had buyers panicking.
Janelle Boyenga, a Compass agent in Los Gatos, had just accepted an all-cash offer on a mansion in Saratoga when the stock market slid. Then, the buyers came back to the table — they wanted a 60-day close rather than a 30-day close, to see if the stock market would recover.
“We told them a 60-day escrow wouldn’t happen, and that they would lose their 3% deposit,” Boyenga said.
In response, the buyer asked to reduce their offer by $200,000 due to the market turbulence. Boyenga’s client declined and threatened to sue. After some legal back-and-forth, the buyer agreed to honor the original offer price but bought themselves slightly more time.
“In the luxury market, buyers have money, but because the market dropped, they don’t want to pay as much,” Boyenga said. “They can afford it, but they’re not feeling confident about the market.”
Some buyers, worried about buying at the top of the market ahead of a possible recession, are asking sellers to lower their prices.
“When people think the market is going to go down, they try to buy things for where they think the market is going, not where it is today,” Boyenga said.
Other buyers are making moves now, while the field is slightly less competitive.
Richard and Amanda Le of Milpitas decided to keep looking this spring, even if they risked buying at a peak.
“It was a risk I was willing to take, because I wanted to be a homeowner,” Richard said.
As for the down payment, Richard’s timing couldn’t have been better — he had cashed out his stocks in January.
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The pair was still surprised at how competitive they found the market. Their first offer, for a $1.3 million home in Union City, was up against 10 others. The Les came in second place. They ended up bidding $1.5 million on a similar home across the street listed at $1.4 million, and won out against five other offers.
“The market is slowing down a little bit, but desirable homes in desirable places will always be hot,” he said.
Fears of a recession were in the back of Richard’s mind. As a software engineer in tech, he worries about further layoffs in the industry. As part of their financial calculations, he and his wife made sure to have enough leftover cash and equities to support a few years of mortgage payments if either of them lost their jobs.
“A lot of people are scared and they’re waiting,” Richard said. “But Warren Buffet said, ‘Be greedy when others are fearful.’ So I went by that.”
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