The San Francisco Bay Area was well represented in Realtor.com’s December ranking of the hottest housing markets in the U.S. with the San Francisco metro area and the San Jose metro area finishing first and second in the report. And the Santa Rosa metro area came in at number eight. It was the second straight month that San Francisco and San Jose came in at one and two.
Jonathan Smoke, chief economist of Realtor.com, and his team carried out the data analysis and identified the top 20 medium-to-large markets where homes are moving fastest and interest (based on listing views on Realtor.com) is highest.
“While California closed out our latest ranking still firmly in control of the hottest markets, the Midwest and Florida are both seeing substantial improvement,” said Smoke. “Pent-up demand and robust economic growth combined with limited supply will keep California tight in 2016, but more markets will challenge them as demand improves elsewhere.”
A few markets that are new to the hot list this month are Tampa, FL; Fort Wayne, IN; and Midland, TX. Realtor.com said these markets typically represent a greater metro area, since people might work in a city but reside in a nearby suburb. For example, San Francisco also includes Oakland and Hayward while San Jose includes Sunnyvale and Santa Clara.
On the whole, the hottest markets receive about 1.4 to 2.9 times the number of views per listing compared with the national average. Their homes move off market 29 to 51 days more quickly than the rest of the U.S., and they have also seen days on market drop by a combined average of 15% year over year.
Below is a market-by-market report from our San Francisco Bay Area local offices:
North Bay – Our Greenbrae manager says this is the least amount of inventory she’s ever seen in Marin, and it’s down 10% vs. Dec 14. Buyers are still out there. Open house traffic is still good, even in rain and the holiday season. Northern Marin has experienced a typical slowdown in listings for the holidays. We have experienced a small bump in sales since Thanksgiving, possibly due to buyers looking to buy before yearend. Our Novato manager has seen several contracts fall out due to buyers’ remorse and buyers not getting loan approval. We expect to see new listings coming on the market after New Year. In Sebastopol, attendance at the few open house remains strong.
San Francisco – With interest rates up a bit our Lakeside office manager expects some impact on demand, but at the present time the inventory is so low that he can’t discern a difference. Our Market Street manager says the local market has fallen into its usual holiday slowdown. However, serious buyers are still on the hunt, and have been competing with multiple offers on those few properties that have been introduced over the past month. Everyone is hoping for more inventory in the new year, though many sellers are waiting until the Super Bowl to hit the market. Those properties ready earlier than that are likely to be rewarded with less competition and a flood of eager buyers.
SF Peninsula – The Burlingame area market is steady and seems to be experiencing a slight slowdown for the holidays, our local manager reports. Our Burlingame North manager says that according to MLS there were 129 single-family home sales In San Mateo County during this time period compared to 139 for the same period in 2014. There were 39 condo/townhouse sales in this 2015 time period compared to 34 for the same period in 2014. Properties that are appropriately price-positioned in the market and are move-in ready receive the most competitive number of offers, and in most cases well above the asking price or relative comparable sales. Inventory is low in the Half Moon Bay area. Open house activity is steady but sales have slowed down in coastal area. Listings are expected to be coming next year, according to our Menlo Park manager, and the general consensus is that it will be a good year with more balance (in buyers and sellers). The Palo Alto area market has been seasonally affected by listings. Our manager is seeing quite a few more listings now rather than after the holidays. It’s a very slow time in the Redwood City-San Carlos area, our local manager reports. Everyone seems to be in the holiday mode although agents are still getting good attendance at the few open houses there are. Both listings and sales have slowed way down in the San Mateo area as well. Our Woodside-Portola Valley manager says top agents have some good listings coming on next year – buyers too. They are feeling good about the 2016 outlook.
East Bay – Inventory in the Berkeley area is slim as we head into the holidays. Fewer than five properties came onto the market in Berkeley this week. Sellers willing to list now are seeing the same amount of buyer traffic at open houses. 40 packets went out on a fixer in Oakland that went on the market last week.
Silicon Valley – Buyers continue to compete for homes in Los Gatos. Inventory is down 25% from the same time period as last year. With the Holidays here the seasonal slowdown in activity is likely to be in effect until the beginning of January, says our San Jose Main office manager. However there are many sellers who have signed listing agreements and are waiting for the first or second week of January to come on the market. He expects to see an increase in inventory in January but with the many buyers in the market the increase in inventory could result in an equal amount of increased sales and therefore inventory levels will remain low. As expected the local Willow Glen Market is in full holiday mode, according to our local manager. Listing inventory continues to decrease with the high 20’s for active listings. Sales activity has come to a crawl. This trend will probably continue as we move into the beginning of the New Year. One thing is certain: the market will be hungry for new inventory as we move into 2016.
South County – After the frenetic and fast-paced year experienced by both clients and agents, it seems that all are welcoming the relative quiet that has settled over the local real estate market. Listings and sales are absolutely flat and it seems that potential buyers and sellers are interested in the holidays rather than in purchasing or selling. This week there were only 44 single-family homes for sale in all of Morgan Hill. The inventory for Gilroy is a little better with 78 single family homes offered for sale on the MLS (but this includes offerings from new home builders as well). With so few homes offered for sale and with low buyer demand, the market is very quiet. Agents, however, remain optimistic that the New Year will bring about a rejuvenated and healthy market.
Santa Cruz County – We have seen more sales volume month to month in 2015 compared to 2014, while maintaining a lower inventory of homes for sale. Values have appreciated fairly consistently over the course of the year, with the average sales price of a single-family residence staying above $800,000 for almost all months of this year. Currently the year to date average sale price is $797,734, compared to $763,767 in 2014, for a total appreciate of home values of a little over 4% for 2015. The Previews luxury market performed quite well in 2015 with the average days on market hitting new lows and the sale to list price ratio staying above 96% all year. The number of active previews homes on the market and number of sales were higher for just about every month of 2015 compared to 2014.
Monterey Peninsula – The local Monterey Peninsula housing market has wound down for the holidays, but agents in our local offices are looking forward to a strong and successful 2016 market.
Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James. Click here to view past issues.