The Bay Area’s luxury housing market is showing few signs of slowing as we move into the heart of the summer. Our latest Coldwell Banker Previews Luxury Market reports find rising sales from the North Bay to Silicon Valley and across to the East Bay.
In Marin County, there were 86 luxury sales over $1.5 million, up nearly 23 percent from a year ago when 70 high-end homes changed hands. Sales were even up more sharply from the 65 transactions in April.
The high end of the luxury market was especially strong last month with 51 homes selling for more than $2 million in Marin, up from 40 during the same period last year. And there were 21 sales over $3 million, up from just 13 a year ago.
In Silicon Valley, sales over $1.5 million rose nearly 16 percent last month from a year ago while the median sale price climbed 8 percent to reach $2,105,000. Sales over $3 million were up an astounding 50 percent year over year.
Finally in the East Bay, million-dollar and up home sales soared 35.6 percent from May 2013. The upper end of the luxury market turned in a particularly strong performance with 55 sales over $2 million, more than double the number a year ago.
We’ll have our San Francisco quarterly luxury market report out later this month and will report back on that market. But based on everything I’m hearing, I suspect luxury sales in The City to follow suit with the rest of the bay.
The Bay Area is a highly desirable area for luxury buyers, who are well qualified to keep sales moving higher. Between the quality of life here, the vibrant high-tech sector, and the overall economy, the demand for high-end homes remains very strong.
The issue really comes down to having enough listings to meet the demand, and we’re starting to see an increase in our inventory. Hopefully that trend will continue with more quality homes coming on the market as we head through the summer home buying season.
Below is a market-by-market report from our local offices:
North Bay – The Greenbrae manager reports that the local market seems to be slowing in the upper price range. In Novato, there has been a slight increase in listing inventory the last 2 weeks. Sales activity is steady but expect the 4th of July holiday weekend to be slow. Independent Agents are seeing fewer multiple offers. Open houses are busy but not quite as robust as past months. June should be a strong month for closings, according to the San Rafael manager. Open houses are still well attended. The overall market in Southern Marin peaked in April, and has been steady through June. There is still a window of opportunity between now and mid-August, during which the demand will continue to exceed the supply. Independent Agents are encouraging sellers to hurry up and get their properties ready to be on the market. The local manager expects a bump in activity after Labor Day for Southern Marin and luxury properties, which are not tied to the seasonal school year. The Previews® luxury market above $2 million continues to pace well ahead of 2013. $2 to $3 million is the most active market, but $3 to $6 million has been steady for the most desirable properties. Coldwell Banker Independent Agents just closed a Tiburon property for $4.5 million, which had been on the market for years. The market above $6 million is still very soft.
San Francisco – Although the Lakeside office is seeing a few more listings, they continue to be snapped up quickly and the general shortage of available properties continues. While there are continued signs of a cooling market, it is not consistent, according to the Lombard office manager. Independent Agents are seeing more solo offers, price reductions, and back-on-markets, but most transactions still involve multiple offers. Fixers and entry-level homes bringing the most activity. For the first time in a long time, most of the ratified contracts in the Market Street office this period were the result of a single offer. And the properties that received multiples had fewer offers to choose from (between 3 and 5). Regardless of the number of offers, the prices remain strong. Has a window of opportunity opened up for weary buyers to get a property without competing? Only time will tell.
SF Peninsula – There are more condo/townhome properties coming on the market on the Peninsula, which could be a good indication that the move up market is loosening up a bit, according to the Burlingame manager. Entry-level buyers are out there and waiting for these properties. We are seeing a steady flow of pre-emptive and off market sales as independent agents who are truly in touch with the local market become aware of these coming properties, proving that the value of a local agent can never be underestimated. The Burlingame North manager said there still are multiple offers and overbids but not an overwhelming number of offers as before. The activity for multiple offers and price increases is dependent on price range for that location and the condition of the property. According to the Menlo Park manager, the local market has seasonally slowed but it is still busier than normal for this time of year. It’s holiday slow in the Palo Alto area, but sales are still bringing many multiple offers. Some buyers have decided that they are now priced out of the market especially in San Carlos, according to the San Carlos-Redwood City manager. One San Carlos property, a 3/2 priced at $789,000 because of serious foundation issues, had requests for 60 disclosure packets but ended up with only 8 offers. It did sell over asking but only in the low $900,000 range. Some reality seems to be settling in, she said. In San Mateo, after a “dismal” beginning to the month, listings have picked up to make the month respectable, the local manager reports. Unit sales are good in Woodside and prices are finally reaching equilibrium from the absurd highs of the year 2000 (tech boom), according to the local manager. Portola Valley is the hot spot now, too, she says.
East Bay – The summer slowdown has begun, according to the Berkeley manager. Open houses are active but not as many buyers as last month. There have been 30-50 groups per open house instead of 75-100 groups. Typically summer is a slower market in Berkeley but it feels like the slowdown started a few weeks earlier than expected. The Previews® high-end market activity has increased with most properties receiving multiple offers. Sales average between 5-15% over asking. The Danville manager said the past month was a busy month, but the market is very specific. A single level home in a desirable location will get multiple offers, but other homes sell more slowly. Buyers are more discriminating. Open house activity is still strong, according to the Oakland-Piedmont manager, but buyers are telling agents that they want to take some time off. Writing several offers per week has become wearing on them. Inventory is inching up and the number of offers coming in compared to the number of disclosure packets going out has dropped. One listing with 31 disclosure packets out had four offers. Independent Agents are keeping the fact that they are writing an offer closer to the vest. Several times this week independent agents thought they were the only ones writing on a property due to the information received from the listing agent, and then three other offers popped up at the same time surprising everyone. Independent Agents in the Walnut Creek area are starting to see a slight summer lull in activity. Sales are still coming in but not at the same pace as last month. Listings are also a little slower, but not much. Buyers are not paying as much over asking on the mid-range homes. The higher priced homes seem to be sitting on the market longer these days.
Silicon Valley – Sellers are continuing to receive multiple offers on properties priced correctly up to $3 million in the 95030 and 95032 Los Gatos area zip codes. Also, there are a ton of opportunities for buyers in the Los Gatos Mountains. Independent Agents in the San Jose Almaden area are still seeing multiple offers but not many from investors/flippers.
Monterey Peninsula – Last week, Tim Allen put into escrow 28 of the 36 Pebble Beach lots that he had listed in January for the Pebble Beach Company. Preliminary June unit sales show an increase of about 5% over last year and dollars up about 4% with the average price up equally at just under $975,000. New listings continue to be steady with sellers who now realize the value of their home has improved in the last 12-18 months. We anticipate a strong summer selling season with many new listings coming to market in the next 30 days. With summer, out of area homebuyers dream of purchasing a home on the Monterey Peninsula, and independent agents hope to help them make their dream come true.