Bay Area home prices are nearing their pre-recession all-time highs as sales all around the Bay soar, according to a recent report by CoreLogic, the La Jolla-based real estate information firm. The median price of all new and existing homes in the Bay Area in June (the most recent data reported) was $660,000, a 6.8 percent rise from a year ago and the highest level since prices hit their peak of $665,000 in June and July of 2007.
Meanwhile, sales have started climbing sharply again as more inventory slowly finds its way onto the market. According to the CoreLogic report, sales of all new and existing homes jumped to 9,386 in June, reaching their highest level since 2006. Sales were up 13.9 percent from the previous month and 16.4 percent from a year ago.
“A key question now is whether June’s…sales pace is sustainable, given the inventory of homes for sale remains pretty tight and rising prices have worsened affordability,” said Andrew LePage, a research analyst with CoreLogic.
LePage said rising home prices have loosened up the inventory of homes for sale in more affordable counties like Contra Costa and Solano counties, giving more owners enough equity to be able to sell their homes and buy another. Sales in those counties were almost double the Bay Area average in June, reaching nearly 30 percent in Solano and 27 percent in Contra Costa.
All but two Bay Area counties – Marin and San Mateo – saw double-digit gains in sales. San Francisco followed Solano and Contra Costa with the third biggest year-over-year increase in sales at 20.5 percent.
Solano County also led the way with a 16.2 percent jump in the median price, reaching $348,500, and San Francisco saw a sharp 14 percent rise in its median price to $1,140,000. Napa, San Mateo, and Santa Clara all enjoyed double-digit price gains as well.
It will be interesting to see how the July numbers come in and whether that strong trend of higher sales and prices continue. Stay tuned!
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Our Greenbrae manager says the local market is slowing as buyers are taking their final vacations before school begins for the kids. That said, agents are still seeing multiple offers on properties – four offers on our $1.6 million listing in San Rafael, and two offers on our condominium in Tiburon. While buyers continue to pay above list price, the differential between list price and sales price seems to be far less at this point in the season. The Petaluma area market is hot and multiple offers are the norm. The number of homes for sale over $1 million is up 10% over the same time last year. The number of homes under contract is up 50% and the number of sales over $1 million is up 42%. The general market in Southern Marin has slowed due to lack of inventory and buyer hesitation. The most desirable homes are still selling with multiple offers, according to our local manager. Agents have seen a slowdown in the luxury market over $2,000,000. They are still seeing sales, however the pace is slower and there are fewer multiple offers.
San Francisco – Our Lombard manager says there’s definitely a summer slow-down with a lot of agents out of town. Open traffic is healthy but the number of offers, and the ratio of disclosure packages out to the number of offers actually received is down. There are more solo offers, price reductions, and sale prices closer to asking than the April/May/June frenzy. Two flat buildings, fixers, and well-priced entry-level homes are still bringing the most activity.
SF Peninsula – According to MLS data, it seems unlikely that there will be the same or more single-family home sales this year compared to last year, according to our Burlingame North manager. Conversely the number of condos and townhomes sold should be the same or more than a year ago. Areas where affordability and higher inventory exist have a more favorable chance of closing more transactions in 2015, such as Daly City and South San Francisco. In the Previews luxury market, there were 146 San Mateo County closed homes sales reported in MLS for the first half of 2015 that had a list price of $3 million or more. Across the hills in Half Moon Bay, lower price range homes ($800k or less) are still in demand. Busy open houses, but offers are scarce for homes priced over $1,000.000. It’s a very price sensitive market. If homes aren’t priced right, they aren’t being shown and are staying on the market. Open houses are still good in the Menlo Park area. Sellers are raising prices and slowing down the aggressiveness of the buyers. There’s a very limited supply of homes. Listings are seasonally slow in the Palo Alto area with everyone returning from vacation and starting school. Prices are up and demand remains strong. The San Mateo market is strong. Inventory is increasing, but only by a few percentage points. Sales are very strong with most receiving multiple offers, lots of cash and quick closes. Open houses are still doing well in the Woodside-Portola Valley area, even in the higher price ranges. A $7.6 mil property sold in one week.
East Bay – The Berkeley market is still very active. There are 60 active listings, up from 1 month ago, but still a sellers’ market. Interest rates have dipped below 4% so agents are noticing an increase in refi’s and buyers are eager to get into contract. Listings are flying off the shelf. Attendance at open houses was good, reports our Oakland-Piedmont manager. Buyers are getting into contract on homes that have been on the market for more than 30 days. Many are good houses but not necessarily perfect. Multiple offers still rule with about 5 – 7 per property, and there are properties that are still going way over with no contingencies. No end in sight to that. Homes in the Lamorinda area continue to sell at a brisk pace, our Orinda manager says, and the Previews high-end market remains steady.
Silicon Valley – Our Cupertino manager said listings are getting fewer offers per property, but homes are still getting nicely bid up. Things need to be properly priced or else they sit on the market. Los Altos single family inventory is extremely low at only 18 houses, and more than 60 percent have been on the market for more than 1 month and are above the last 5 month median sales price. Only 3 townhouse/condos are for sale. Los Altos Hills inventory is also very low with only 28 total homes for sale. Our local manager says any listing that is livable under $3M sells in one week, unless impacted by noise. Mountain View inventory continues to be extremely low in both class 1 and class 2. The class 2 price still seems to reach new highs, when the remodel is fantastic. Sunnyvale still has low inventory and all the good floor plan and remodeled houses are still selling in one week with multiple offers. Inventory is still very tight in the Los Gatos area, and actually on a slight decline. The Previews high-end market is solid. Inventory can’t increase because sales are continuing to be very strong, says our San Jose Almaden manager. Agents are still seeing multiple offers but the number of offers is more like 2-5 as opposed to the 10-15 they used to receive. Houses are still going over list price. Almaden sales were 9% over list price, Blossom Valley was just a touch over list at 1.1% and Cambrian was 8.1% over list price. Our Willow Glen manager says there is no slowdown in the local market for the dog days of summer. The post-Fourth of July influx of new listing inventory is rapidly being consumed by still strong buyer demand. Open house traffic is still brisk. Agents have experienced a few less multiple offers. Typically most listings are still receiving 3-5 offers on competitively priced listings. As we move into August sales are still strong and there is still strong new listing inventory week to week.
South County – Both summer months (June and July) were a very busy time for South County Realtors. Sales and listing activity were strong, with many homes selling at or near list price. At the beginning of August, however, the market cooled somewhat. Homes in both Morgan Hill and Gilroy are staying on the market just a little longer, and in some cases offers are being accepted just below asking. In addition, the listing “shortage crisis” seems to have eased considerably. During the past six to seven weeks more and more homes are being offered for sale. At this point, inventory is sufficient to meet buyer demand.
Santa Cruz County – The number of homes on the market in Santa Cruz County has decreased for 2 months straight resulting in a strong seller’s market and a competitive buyer’s market. Sales were steady from June to July with 227 homes sold in each month, which is 12+% more sales than 2014. Multiple offers have come in on well priced, appealing properties in the average price range, which is currently $795,670. Year to date there have been 1,190 homes sold in the county, while all of 2014 experienced a total of 1,888 sales. In the Previews luxury segment, several of our listings over a million have received multiple offers and changed to pending status within 5 days of hitting the market. There is an increasing inventory of very high end, luxury homes hitting the market, some offered for the first time ever. In the past month or so our local offices have taken listings in the $6 million, $8 million and even $12 million dollar price levels. Sales over a million are steadily increasing each month this year, with 45 in July.
Monterey County – We ended July with a strong finish and a 24% increase over same month sales and unit sides of 101. The Monterey Peninsula still continues to be a draw for out of area investors looking for a vacation or future retirement home. Last week resulted in a significant sale of a 17-mile drive property that has been on the market for almost two years. The Bay Area buyer has big plans for an extensive renovation of the over 2-acre ocean front estate. As we have seen in the past, usually their friends and family will follow and will be looking in the nearby neighborhoods. The Monterey and Pacific Grove market of mid price under $1 million continues to be hot, and just last week agents received multiple offers on 2 new listings in our office. Agents are looking forward to the biggest week of the year, “Car Week,” with an anticipated influx of over 50,000 car enthusiast descending on the Monterey Peninsula. Ladies and Gentlemen, “Start your Engines!” The Monterey Peninsula is only a short drive from the Bay Area. Our local manager invites visitors to check out some of our properties on our new website coldwellbankerhomes.com.
Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James. Click here to view past issues.