If we needed further proof of just how hot the Bay Area housing market is, realtor.com® just released a study that shows four of six of the “hottest markets” in the nation for homebuyers and sellers are located in the San Francisco Bay Area.
According to realtor.com®, Bay Area markets receive as many as three times the number of views per listing on its site as the national average. Additionally, properties in our area sell between 25-40 days faster than other markets in the U.S.
The San Francisco/Oakland/Hayward metro area ranked as the number one hottest market in the U.S., followed by Vallejo/Fairfield at No. 2, Santa Rosa at No. 4 and San Jose/Santa Clara metro area at No. 6. Santa Cruz rounded out the top market list at No. 10.
Realtor.com® attributed high Bay Area market rankings to a continued shortage of homes for sale, coupled with a strong economy that is keeping buyer demand robust.
Elsewhere, two other Northern California regions – Sacramento and the Stockton/Lodi area – also ranked in the top 20 nationally at No. 11 and No. 16, respectively. Texas boasted the second most markets in the top 20 with four. And Colorado ranked highly with Denver checking in as the third hottest market nationally.
According to realtor.com®, this summer could be the best home buying season since 2006, with a strong demand for properties and a steady growth in supply nationally. “We’re finally beginning to see an uptick in supply as sellers become more confident about home prices,” said realtor.com® chief economist Jonathan Smoke.
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Even with a slight seasonal slow-down Greenbrae agents are still seeing multiple offers on what is perceived to be well-priced properties. But there are a number of new Marin properties that have not had multiple offers and agents are starting to see price reductions, which are somewhat new to this market. This also applies to Previews luxury properties. Current inventory stands at about half a month in Novato. Agents are still struggling for listings. It was particularly slow due to the 4th of July holiday. Sales have been steady up until the holiday but inventory is depleted or seen as overpriced if not in contract. Our San Rafael manager says the summer selling season appears to be in full swing. The activity level has dropped off due to the holiday weekend and family vacations. It seems like a lot of agents and their buyers are on vacation too. It’s a good time to show properties since there is less agent competition. Sebastopol area listings continue to trickle in while inventory remains constrained. One new Previews luxury listing had multiple offers, sold and closed escrow in one week. Our Southern Marin manager notes that the general market continues to be limited due to lack of inventory. Agents are still seeing multiple offers on all listings under $1 million. The number of offers when receiving multiple offers is diminishing. The Previews luxury market remains strong and steady. Previews listings received less attention over the last two weeks as a “summertime lull” has taken over our market.
San Francisco – Our Lakeside office manager says buyers claim fatigue but keep buying. Sellers are still reluctant, and “the world holds its breath as China sneezes and Greece hiccups.” Lombard office agents are noticing a pause or slow down in the market. No one is sure whether it is more cautious buyers, buyers and agents on summer vacation, or price fatigue. Of the 27 closed SF single family homes this week, 25 were over asking, but those were properties that went into escrow in April, May or early June. This week brought more solo offers, longer Days on Market, and even a couple of price reductions. It’s too early to detect a certain trend. Our Market Street office manager says the local remains “more of the same” — not enough inventory and too many buyers. While agents are seeing price reductions on a number of listings, and homes that give out multiple disclosure packages but receive no offers, most well-priced and well-presented properties that hit the market are rewarded with multiple bidders. The only properties not generating multiple offers are those where an agent was able to get their buyer in contract with a pre-emptive offer and new construction deals.
SF Peninsula – Burlingame agents continue to dig deep for off market opportunities for waiting buyers. Multiple offers continue and inventory remains tight. The usual summer vacation slow- down has not yet happened and is not expected to happen. There is also waiting inventory scheduled to come on the market after Labor Day, which promises a great fall market in the making. Our local office just closed a very large sale in Hillsborough for $13.25 million and went into escrow with a new record price for San Carlos. There are some beautiful listings coming into the market and being sold very quickly. There are currently 23 active listings and 17 pending sales. Overbids are reaching surprising levels on a routine basis of $500,000 or more. Our Berkeley North manager says this past week he’s seeing more all-cash offers again in the multiple offer situations. Our Menlo Park manager reports that we may be seeing a slight increase in the days on market for local homes. Buyers seem to be taking more time and not jumping into the fray as quickly as they did 3 months ago. The sky is not the limit anymore. Still the market is not in the normal range; it’s still an out of balance market. The very lowest part of the market in the unincorporated area near highway 101 is now an investor hunting ground with lots of competition there. Palo Alto agents are seeing a slow down with the holiday, school out and vacations. However, several listings are up and coming in the next week and a half. Our Redwood City manager says it seems like market has slowed down possibly due to the holiday and summer activities. There is still a definite lack of inventory. Many buyers have been priced out of the market making this a very challenging market. With the summer in full swing, San Mateo agents are seeing less inventory coming to market. What is available is selling and with multiple offers. Woodside and Portola Valley have demonstrated a steady YTD of sales and listings. When a buyer wants a certain property in these price ranges (and has missed out on others) he goes for it. Witness a $9 million listing – sales price of $12.5 million and only one other offer. Days on market have also dropped even in the high end.
East Bay – Less inventory means even more multiple offers than a few weeks ago, according to our Berkeley manager. Buyers able to afford $800k are looking at properties in the $500-600k list price range, knowing they need to bid $200k over ask price to be at the top of the pack. July is typically a slow month for Berkeley but open houses are still heavily attended and 90% of listings are receiving multiple offers. At this week’s meeting, agents reported bids on five properties not in particularly good or coveted areas of between 50-75% over asking. Still very strong sellers market. Sales activity continues to be strong in the Danville area, but most noticeable now is that the market is becoming very house-specific with regard to multiple offers. Some Sellers have overshot the market in terms of price. July 4th weekend was slow in many areas, our Oakland-Piedmont manager says, but offer writing has picked up this week. The Lamorinda market has been steady.
Silicon Valley – One of our listings in Cupertino got about 10 offers, but that is now the exception, according to our local manager. Most homes are only getting about 1 to 2 offers. Correct pricing is more important than ever. Our Los Altos manager says inventory is down in all markets, except over $7M. The holiday weekend had fewer open houses, and very little new inventory. Los Altos, Mountain View, and Sunnyvale have less than 1 week of median priced homes to sell. Los Altos Hills has less than 1 week of inventory under $5M. In Los Altos and Los Altos Hills, once the list price of the house gets within the target fair market value, there are buyers circling, requesting disclosures and doing due diligence to make an offer. Mountain view condos are still appreciating, although, it seems like they cannot go much higher or they soon will be as much as a single family home. Sunnyvale still has little inventory that sits for more than 2 weeks, but most only has one week of exposure and then dates are set for offers. Usually there is an increase in inventory in the Los Gatos area as we head into summer. Instead, inventory has been declining, our local manager reports. Sales are still going strong in the San Jose area with multiple offers. The common number for Almaden, Blossom Valley and Cambrian is 13 because all 3 areas were up 13% in units sold over June of 2014. Interestingly enough, both Blossom Valley and Cambrian were flat compared to last month. Almaden was up 18% in June 2015 over May 2015. This train is still running strong. Our San Jose Main office manager says inventory is slightly lower along with market activity, maybe due to the end of school/July 4 holiday/vacation/summer schedule. The next couple weeks will be interesting, as sellers who want to move before school starts again will need to list very soon. The 4th of July week was surprisingly busy in Willow Glen this past week. Our office had a few quite days, however just before the July 4th weekend the agents and new sales filled the office. The local Willow Glen active inventory continues to contract. There were several buy side deals that were accepted over the long holiday weekend. It seemed many active buyers either pressed on to buy or they stayed away and are waiting for the post 4th of July new inventory that we are all hoping is coming.
South County – The current market in South County can lately be described as “normal” (whatever that means). There seems to be an adequate number of listings to meet buyer demand. Though multiple offers are still a common occurrence, homes are selling at or near list price. In addition, appraisals are coming in very near sales price (at least in Gilroy and Morgan Hill). June sales were just a little off from previous months—but were still above normal.
Monterey Peninsula – The local market finished June with a 15% increase in sales and units over the same time last year. The market continues to heat up for the summer events and visitors. Inventory continues to be light but as new properties hit the market they receive much attention. Monterey Peninsula values compared to the Bay Area prices seem to be attractive given the quality of life and scenic beauty that the area has to offer.
Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James. Click here to view past issues.