A new report by CoreLogic, the real estate information firm, painted a mixed picture of the Bay Area’s housing market last month.
On one hand, home sales rose sharply in March from February, but, on the other hand, sales dipped from a year ago for only the second year-over-year decline in the past 12 months. And although the median sale price rose both on a monthly and yearly basis, March saw the smallest annual price gain in four years.
A total of 6,754 new and resale houses and condos sold in the nine county Bay Area region in March, up 37 percent from February but down 2.9 percent from March 2015. The March sales totals were the second lowest for the month of March (behind March 2014) since 2009.
“Last month the housing market experienced a normal, seasonal spike from February in the number of recorded transactions, which reflects more buyers and sellers entering the market as the holidays and winter faded,” said Andrew LePage, research analyst with CoreLogic. “However, sales fell slightly year over year—for only the second time in the past year—and they were about 21 percent below the average March sales tally since the late 1980s.”
LePage said the data “suggests that despite the improved economy and still-low mortgage rates, many would-be buyers continue to face hurdles such as waning affordability, moderately tight credit and a relatively slim inventory of homes for sale in many communities.”
Meanwhile, the median price paid for all homes sold in the Bay Area in March 2016 was $643,250, up 4.6 percent month over month from $615,000 in February and up 1.4 percent year over year from $634,500 in March 2015. The median sale price has risen year over year for 48 consecutive months, but the 1.4 percent year-over-year gain in March 2016 was the smallest for any month since the median sale price began to rise on a year-over-year basis four years ago, CoreLogic reported.
“Sky-high home prices in the Bay Area’s coastal areas continue to push buyers inland,” said LePage. “There has been a meaningful increase in the share of homes selling in Solano, Contra Costa, Napa and Sonoma counties, which have the region’s lowest median sale prices.”
LePage noted that March sales in those four counties rose 7.3 percent year over year, while the combined sales in the San Francisco Bay Area’s four most expensive counties—San Francisco, Santa Clara, San Mateo and Marin—fell almost 9 percent.
It will be interesting to see if this trend continues in the coming months. Stay tuned!
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Inventory in Marin County has increased from April of last year by 8 percent, our Greenbrae manager reports. This is good news for buyers but buyer demand is still outpacing available listings by far. The properties priced under $1 million are seeing multiple offers and are in high demand. Currently 60% of properties under $1 million are in contract, while 25% over $2 million are in contract. Winning bids are anywhere from 10 to 20 percent over list price. The latest trend is buyers waiving loan and appraisal contingencies even when getting a loan. And waiving inspection contingencies altogether in multiple offer situations is more the norm than the exception in this highly competitive Marin market. The luxury market in Novato over $1 Million is slowing, our local manager says. Homes at the higher price point are taking longer to sell unless very special. As for the overall market, she reports that it’s raining listings…. well, maybe light showers of listings. Spring has sprung and sellers have finally gotten serious about selling. More listings mean more choices for buyers. Agents are experiencing fewer multiple offers with only one or two offers on a property. Prices are still strong. Open houses are attracting 30-40 parties the first week-end. The Santa Rosa market is seeing more price reductions in the Previews luxury market. Otherwise not much has changed. This year and last year are about equal YTD in units closed. For the general market, it’s the same old story – very difficult if not impossible for first time home buyers, and competitive at all other price points for buyers with the exception of the Previews market, which is moving toward balance.
SF Peninsula – In the Half Moon Bay area, inventory is increasing. There are fewer multiple offers on listings. Right pricing is more important than ever, our local manager notes. The Menlo Park area housing market is feeling ‘fragile’ around the edges (bad lots, corner lots, bad floorplans, etc.), our local manager says. But good properties, and well located properties are still flying off the shelves. Our office has four listings in Menlo Park over $7 million. Prices in Atherton for a good but run of the mill house in the best area is minimum $12 million, she says. So the delta between Menlo Park and Atherton has become substantial. Now the $5 million vs. $12 million delta is rapidly closing as MP prices are reaching to close that gap. Not much change in the Redwood City-San Carlos area. Gradually there seems to be a little more inventory coming on the market. Single family homes in San Mateo County under $1,000,000 are very much in demand and still drawing multiple offers. The Woodside-Portola Valley market needs more inventory in the $3 to $6 million range. Those sell the fastest in Woodside.
East Bay – Berkeley is seeing a slight shift in activity in the Previews luxury market. Properties over $1.5m need to be in great shape, otherwise buyers are hesitant to write offers. Have we hit the top of the market in the high end, our local manager wonders? Properties under $1m are still very competitive. There is slightly more inventory but still at an all-time low and with interest rates staying under 4%, buyers are frantically trying to get into a property. A small condo in Oakland received 40 offers. A Berkeley house located on a terrific block with a brick foundation received 17 offers and sold 50% over the asking price.
Silicon Valley – The local market is very active and open houses are getting 80+ groups in some cases, reports our Cupertino manager. She adds that the market is making up for a slow start to the year. Buyers get a break as more inventory hits the market in the Los Gatos area, and there are a few sellers reducing their prices. More inventory is coming in the Previews luxury market as well. Our San Jose Almaden office sales have increased each week since the beginning of the year. This was the first week that our office listings were lower than the week before. Coincidently this is the first week of the year that active inventory is lower than the previous week for Santa Clara County. The sales prices for Almaden and Cambrian have been hot this month. Almaden average sales price for April is $1,622,000 which is up 7% over list price and up 17% over April 2015 sales price. The average sales price in Cambrian for April is $1,032,000 which is up 9% over the average list price and up 20% over the sales price for April of 2015. The average sales price for Blossom Valley was $658,000 which was basically flat for the list price of April and the average sales price for April of 2015. The long waited active listing inventory is finally starting to flow into the local Willow Glen market. Inventory has reached the low 80’s for active listing count. The post April 15th tax deadline is starting off as a strong surge in both new active listings and sales for Willow Glen.
South County – Buyers continue to discover the value of South County real estate as they are outbid on properties in San Jose, Santa Clara, Sunnyvale and points north, according to our local manager. It is not uncommon for a San Jose listing to garner multiple offers, leaving many buyers no alternative but to search for properties in alternative areas. Morgan Hill and especially Gilroy are becoming the cities of choice for buyers who are looking for entry level (affordable) homes. A typical San Jose (tract) home that demands and receives offers in the $800,000 range can be purchased in Gilroy for substantially less money. Local agents are reporting a large influx of these types of potential buyers.
Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James. Click here to view past issues.