Bay Area Home Prices Hit Post-Recession
Record HighThe median sale price for all homes in the nine-county Bay Area hit a new record high last month at $686,000, according to a new report by CoreLogic, the Irvine-based real estate information services firm. That price surpassed the previous record high of $665,000 reached in June and July of 2007.
The median price in April was up 5.5 percent compared to March and up 4.1 percent year over year from $659,000 in April 2015. CoreLogic notes that an increase in the median sale price between March and April in the Bay Area is normal, with the average change between those two months of 2.5 percent. The median sale price has risen year over year for 49 consecutive months
“Three of the San Francisco Bay Area’s nine counties – Alameda, San Francisco and Santa Clara – posted record median sale prices in April,” said Andrew LePage, research analyst with CoreLogic. “The medians in Marin and San Mateo counties hovered just below record levels last month, while medians in the remaining four counties were about 13 to 27 percent below their peaks.”
Meanwhile, home sales continued to be challenged by low inventory last month. A total of 7,518 new and resale houses and condominiums sold in the Bay Area in April, up 7.7 percent month over month from March but down 7.3 percent year over year from April 2015
“It’s no surprise that in a month when the San Francisco Bay Area’s median home sale price hit a record high the region also logged a year-over-year decline in sales, which remained well below the long-term average,” said LePage.
“Low mortgage rates, job growth and other drivers have stoked demand, but the supply of homes for sale – especially in the low-to-middle price ranges – hasn’t kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory.”
Home sales of $500,000 or more accounted for 69.7 percent of all sales in April, up from 66.3 percent in March and up from 65.5 percent in April 2015. The April 2016 $500,000-plus share was the highest since August 2007 when it was 72.1 percent, CoreLogic noted.
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Our Greenbrae manager says the local market seems to be balancing out with Preview luxury homes sitting longer on market before an offer. There still are lots of buyers but they are not instantly reacting unless the property is special, in a good location priced right. According to our San Rafael manager, the market appears to be running at a slower but steady pace. Buyers are not jumping at listings unless priced under $1.4M. The good homes that are well located, price at, or below the current sales and are in pristine condition are still getting multiple offers. However, agents have not seen the buyer frenzy that was happening last year. As we go into the Holiday weekend and the official start of Summer the market should be a bit slower. A great time for buyers to take advantage of the slower pace, low interest rates and softer prices. Our Santa Rosa Bicentennial office manager says inventory under $1 million is still the problem with only 1.6 month’s supply in April. Year to date the market is trending 10% below 2015. Median price is up 8% vs April of 2015. While multiple offers are still common, the numbers of them and the buyers’ willingness to keep pushing up prices has softened. Over $1 million hit a low mark of 16 sales in February and averaged 35 in March and April. If the trend from 2015 follows we will expect to see this rise to an average around 48 closings per month through September. The Santa Rosa Mission office manager reports that the lower end of Previews market is very active but activity diminishes as you move up the price ladder. There are lots of offers and still many over asking price. Our Southern Marin manager says the luxury market has had a flurry of activity with several sales for $10 +/- million in Ross/Kentfield and Tiburon/Belvedere. There have also been several sales in Mill Valley/Sausalito in the $3 to $6 million range. However, the supply of $3 plus million homes is increasing and the % under contract is decreasing. The general market has an increasing supply of listings giving buyers more options. However, the best priced and location properties are getting multiple offers and overbids, although to a lesser degree.
San Francisco – For sellers, pricing has become hyper critical, our Lakeside manager notes. Entry level properties (single family homes in the $700,000 range) are in high demand with double digit offers very common. The number of mid-priced homes has increased and buyers are feeling fearful of “paying too much.” The number of sales is continuing to be steady and strong, but attendance at open houses has dropped off according to many agents. This week saw the first slight dip in the home and condo inventory count after a couple of month’s increase, according to our Lombard office manager. Over 80% of SFH’s are still exceeding the listing price, whereas almost half of recent condos closings have been at or lower than asking. Seeing more price reductions, especially in the upper end. Entry level and fixers still bringing the biggest traffic.
SF Peninsula – There are more listings coming on the market and they are staying on the market longer and with fewer multiple offers, according to our Half Moon Bay manager. In the Preview luxury segment, properties are staying on the market longer and some of them are having to reduce the listing price. Our Menlo Park manager reports that she’s definitely seeing a slowdown in 1) number of attendees at open houses 2) multiple offers 3) a smaller ratio of offer price overbids to list price and 4) in buyer’s sense of urgency. That being said, it is still a market bereft of houses that our buyers want, thus still forcing prices of the A+ houses even higher. We now have 6 houses in Menlo Park over $6 million. Sales are down year over year for Palo Alto and surrounding cities, and inventory is starting to build. It’s very neighborhood specific, our manager notes. Our San Carlos-Redwood City manager says there gradually seems to be more inventory coming on the market. Attendance at Saturday open houses has slowed down but still large attendance at Sunday open houses. It is truly about price, location and condition. There is a slowdown in the market San Mateo area market. Listings are still increasing but sales are taking longer. The overall market is down in total units by at least 10% years to date 2015/2016, our manager reports. Our Woodside-Portola Valley manager reports that country markets are steady – Portola Valley has a lot of good listings now and they are going. Prices are manageable there compared to Woodside. Good houses on an acre or two can be had for under $5 million.
East Bay – Buyers are feeling fatigued and some are “waiting” for the market to cool, our Berkeley manager says. Listings are flying off the shelf no matter what price. Interest rates are still at an all-time low, the weather is beautiful and the homes look great. After a bump in inventory in the last month, the inventory levels have remained steady, according to our Danville manager. Sales are brisk, with lots of multiple offers in the low to medium price ranges. The Previews luxury market is healthy but slower over $2 million. Our Oakland-Piedmont manager says listings are selling as quickly as they come in at most price points. Some Buyers are taking a break hoping that the competition dies down as well as the market leveling off in price.
Silicon Valley – Open houses and general activity is still good, reports our Cupertino manager. In most cases homes are not getting the number of multiple offers they would have received a month ago. This is typical for this time of year, when the focus may shift to graduations, weddings and vacations. Our Los Altos manager says Inventory has increased recently, however, so have the number of pending sales. And although agents have seen a slight slowing of market activity recently, our manager would still categorize the market as robust. There is strong activity on properties in move in condition and priced to sell, resulting in multiple offers that typically achieve a sale price that is over asking sale. That being said some sellers are wishing to test the market by bringing their homes on to the market at higher prices than previous sales and pendings. As a result, there are more price adjustments of late, but these still only make up a smaller percentage of the market. In short, the market is strong but just experiencing normal supply and demand fluctuations. The luxury market (homes priced over $3.5M) is steady but, flat. Days on market have increased and frenzy bidding or multiple offers being the exception as opposed to the rule. Our Los Gatos manager notes that buyers are getting a slight reprieve as more inventory hits the market. Still very competitive in the under $2 million price point. Our San Jose Almaden manager says inventory is creeping up and he’s still seeing multiple offers although not as many as previous months. The average sales price for May in Santa Clara County was $1,225,000 which is up 8.5% from last year. Almaden average sales price for the month is $1,259,000 which is down 7% from last year. The average sales price in May has been $727,000 in Blossom Valley which is up 12% from May of 2015. The average sales price in Cambrian so far for May is $1,026,000 which is up 11% from May of 2015. And the average sales price so far for the month of May in Santa Teresa is $754,000 which is up 5% from last year. Our San Jose Main office manager reports inventory continues to increase, however it’s still below the average of the past 10 years. Buyers are picky and homes just a tad over-priced will continue to sit. Interest rates are excellent and buyers are stretching to get the house they want. Even with increasing inventory it is a competitive market with many properties still seeing multiple offers. The local Willow Glen market continues to see active listing inventory increase week over week. The market has surpassed the 100-unit mark, which is a three year high for active listing inventory for this area. It’s still a tale of two markets; some homes are sitting with low open house traffic while others are very busy. It appears to be price point driven; homes under the $850,000 price point are still drawing lots of attention and multiple offers. One listing at this price point drew 10 offers with the property in contract well over $900,000.
South County – South County agents are reporting that more and more listings are coming on the market. All of a sudden the flood gates have opened (at least in Morgan Hill and Gilroy) with many sellers deciding to list their homes. This past week alone, the Morgan Hill office listed 20 properties ranging from entry level homes priced under $650,000 to several priced well above one million dollars. This listing frenzy has certainly helped meet buyer demand, which in the past has far exceed supply. With more listing competition, however, prices have begun to adjust. Some sellers have had to lower their asking prices in order to garner an offer. It is evident that the market is beginning to balance itself. But with the spring/summer buying season in full swing, many agents are concerned that the current housing supply may still not be sufficient to meet demand.
Santa Cruz County – The housing market in Santa Cruz County continues to stay very hot with the number of active single family residences remaining historically low. In the recent couple of weeks, the inventory has actually decreased by approximately 5% despite a fairly steady flow of approximately 45-50 listings coming on each week. The number of single family homes that have gone pending in the past two weeks is 125, representing over 1/3 of the entire inventory of active homes. Condos and townhomes are in high demand as they represent the more affordable range of properties available but with a two-week average of 14 going pending and 10 new listings per week the inventory has not increased and remains at just 58 active. Year to date the average sales price of a single family home is $891,826, which is approximately $100,000 higher than 2015’s final average. The Previews housing market in Santa Cruz County has stayed relatively hot with the number of sales remaining fairly consistent from March through May, ranging from 31-42 sales. Homes listed over $1 million represent a little more than half of the total inventory of homes available. The number of active homes over $2 million has increased slightly each month starting with 33 in January and 42 currently active in May. There have been 18 sales year to date over $2 million.
Monterey Peninsula – Our local manager has noticed a slight slowdown in ratified contracts for the last two weeks, but the office’s new listings are steady at an average of 42 per month. Depending on the property and area, reports are that the buyer is evaluating prices and not jumping in head first and waiting to see what others will do. It could be that buyers are feeling that prices have over corrected from the pre-recession values, but then with only a four-month supply of inventory there is not much to choose from. Agents are looking forward to the Memorial Day weekend visitors who will be perusing our open houses and our five local offices. Looking forward to a strong finish for May 2016.
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