Homebuyers and their agents continue to hope the new year brings with it more properties to choose from, but so far that wish hasn’t been answered. A continued shortage of listings led January home sales to drop to their lowest level for the month in seven years, according to a new report by CoreLogic DataQuick, the La Jolla-based real estate information services company.
A total of 4,439 new and resale houses and condos sold in the nine-county Bay Area in last month, down 5.5 percent from January 2014. The total was also down 40.5 month over month, although a seasonal drop from December to January isn’t unusual. Bay Area sales have fallen an average of 28.5 percent between the months of December and January since 1988, the firm noted.
Meanwhile, the median price paid for a Bay Area home last month was $572,000, down month over month by 5.1 percent but up year over year by a solid 9 percent from $525,000 in January 2014. Last month marked the 34th consecutive month with a year-over-year gain in the median sale price, although the gains have been trending lower.
“The latest data does indicate the market continues to struggle with challenges that many in the industry hoped would be resolved last year – challenges such as inactive groups of buyers and sellers and a mortgage market that remains difficult for many,” said Andrew LePage,” CoreLogic DataQuick data analyst.
“More job and income growth, coupled with low mortgage rates, could fuel demand this year in a market still running short on supply and struggling with affordability constraints. It will be interesting to see whether recent home price appreciation will trigger a more pronounced ‘supply response’ – an increase in the number of homes listed for sale.”
LePage cautioned not to read too much in the January numbers, explaining that January isn’t normally a “bellwether month. The spring months will give agents and their clients a better reading of how the market will trend in 2015.
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Our Greenbrae manager said the market is substantially down in inventory versus a year ago, which continues to drive prices up on what little there is on the market. She has yet to see a listing come on this year that has not received multiple offers. Inventory is down approx. 27% from this time last year. Buyers are out in mass. Novato area listings are slowly coming in. Sales are extremely quiet. Still experiencing multiple offers due to low inventory. Buyers are still waiting to get into a new property. Expect more inventory in March. Our Sebastopol manager reports lots of buyers, huge attendance at open houses and the competition is fierce. But not nearly enough listings. Many potential sellers are reluctant to list as they don’t know where to go. January home sales in Sonoma County were the lowest in 7 years. In Southern Marin, low inventory is slowing the market down. However the luxury market is very active. The Previews market remains steady and strong. A total of 12 of 28 Coldwell Banker sales for February are over $2 million.
San Francisco – Our Lakeside manager says multiple offers are pouring in on the dismally few listings that are coming on the market. Each time, there is just one buyer who takes home the prize. And still, transactions are falling through sometimes. Some buyers are choosing to go into the backup position and sometimes get the property that way. Others are choosing not to go into backup positions and if no one else does they sometimes are able to slip in to save the day if the transaction falters. Inventory remains the largest challenge, agrees our Lombard manager. But not everything is selling. Despite the demand, buyers are still smart, and overpriced homes are remaining on the market. All sellers and all homes are not automatically entitled to multiple offers and way-over-asking prices. With the Super Bowl now past, there has been an ever so slight uptick in the number of listings, reports our Market Street office manager. As before, this inventory is quickly scooped up by an anxious buyers waiting for the next opportunity to pounce. Multiple offers continue to be the order of the day, and the SF agent population is abuzz about a house in need of updating that received 21 offers, and will close for $1.4M over its asking price! It is STILL a great time to be a seller.
SF Peninsula – It was a busy holiday and first of the year in Palo Alto. The majority of transactions are multiple offers and prices continue to rise at a historic rate. It has been an extremely slow time for our Redwood City-San Carlos office. Inventory is at an all-time low. Agents are writing lots of offers but not getting many offers accepted. It’s a very frustrating market, our local manager laments.
East Bay – Due to lack of inventory there has been a big decrease in accepted offers, according to our Fremont manager. However, open homes remain to show lots of activity. Our Oakland-Piedmont manager reports it’s still a very tight market with inventory. The two offers that were not multiple were preemptive and currently that seems to be the trend – agents looking for off market opportunities for their buyers that have been frustrated with all the offers they have written. There is lots of activity at the open houses and fierce competition to get the offers in first. Agents have listings being signed up that are going on waivers hoping to come in March/April.
Silicon Valley – As one of the Cupertino agents said this morning, “The market is out of control”. Every sale sets a new benchmark and it is very difficult for buyers to know what to offer. Buyers need to be prepared for their property to not appraise. Our Los Altos manager said there still is low inventory under $3M in all their areas – Palo Alto, Los altos, Los Altos Hills, Sunnyvale and Mountain View. A 5 bed 2.5 bath Sunnyvale house in Homestead High area all remodeled had over 200 visitors on a very rainy weekend. The last house on that street sold for $1,850,000. And this most recent sale is another 150K over that last price. A 2 bed 1 bath Condo in Mountain View that last year was selling in the high 500’s, had 14 offers and sold at 775K. Palo Alto is still a sellers paradise. a 4 bed 2 bath fairly original house in Green Acres area of Palo Alto (Gunn High School area) listed at $1,990,000, and sold over $2.6M. More listings are supposedly coming at least in Sunnyvale, according to many agents we talk with. In Los Gatos, Multiple offers are increasing as buyers compete over limited inventory. More homes are coming to market in San Jose but they’re going into contract quickly, which isn’t increasing the bottom line of active listings much. There are 27 SFR available in Almaden and just 33 in all of Blossom Valley. The average sales price in Almaden for February is $1,683,000, which is up 38% from February 2014 and up 17% from last month. The average sales price for Blossom Valley is $609,000, which is up 10% from February 2014 and just up 3% from February 2014. The Willow Glen market is starting to see some growth with new active listings. The post-Super Bowl real estate season is starting to bear fruit. Open house traffic is very busy at all active listings. Buyers are shopping, and most properties are selling within 7 days or right after the first open house weekend. And yes, there are multiple offers well over the asking price. Agents are seeing record price points for homes under the $ 1 million list price. In San Mateo, extremely low inventory–everyone is working hard but frustrated. Pressure on offers is very high.
South County – Since late last year the listing inventory in all of South County has been very low. It seems, however, that this might be changing. As of February 17, there were 59 single family homes listed in Morgan Hill. This is up from a low of about 38 at the beginning of the year. Prices, however, remain high. Of the 59 Morgan Hill homes that are active, 25 are listed for over one million dollars. That translates to 43% of all Morgan Hill listings priced above one million dollars. Though Gilroy has 80 active listings, 32 are listed over one million dollars (45% of the entire inventory). The buyer pent up demand that resulted from the low inventory has translated into sellers’ pricing their properties at even higher prices. Most agents agree, that as more homes are offered for sale, prices should begin to stabilize.