If there was any doubt that the Bay Area housing market has rebounded from the economic downturn, July’s figures lay those to rest. The region racked up the most home sales in July for any month in almost seven years, reaching pre-recession highs. And the luxury market around the Bay was particularly strong with double-digit year-over-year sales increases – as high as 76% in the East Bay.
DataQuick, the La Jolla-based industry research firm, reported that 9,339 new and resale houses and condos sold in the nine-county Bay Area in July. That was up 18.3 percent from the month before, and up 13.3 percent from July 2012. It was the highest July sales since 12,538 homes sold in July 2005, and the highest for any month since August 2006, when 9,713 homes sold.
While the recovery has been extremely strong, there’s still a little ways to go before we reach the all-time high prices again. Bay Area median peaked at $665,000 in June and July 2007, then dropped as low as $290,000 in March 2009. Today’s Bay Area Median Price is up to $562,000. But keep in mind DataQuick and other media sources are referring to overall Bay Area combined median prices. We have several high demand/low inventory towns and cities which have indeed surpassed their previous all-time high prices. Palo Alto continues to hit new highs each month in median price this year, most recently posting a median of approximately $1.54M. Similarly, nearby Menlo Park almost hit their 2008 median high of $1.47M late last year, and the median price sales numbers the past several months are just short of that.
A few others:
Carmel peaked at $1.4 late 2006. Steady gains in price began late last year, and they continue to rise this year, today just a bit short of $1M.
San Francisco passed its prior peak price of $830K (2007) earlier this year, and is running about $859K today.
Marin County has seen a big 16% year of year gain to $828K, but still short of its 2008 high of $928K.
In the East Bay, Orinda has seen a whopping 23% increase over last year to $1.24M, and is not far from its April 2008 high of $1.31M
In San Jose, the desirable area of Willow Glen just passed its July 2007 high of $759K, coming in last month at a new high of $767,000.
I can’t stress enough the fact the Real Estate is hyper-local, probably more importantly true here in the Bay Area than in most other parts of the country. Many sources are now offering plenty of data on real estate sales and activity, but you need a local Real Estate Professional to understand what is truly going on in your neighborhood.
The Bay Area’s luxury market has been on fire for the past year or so and is showing no signs of slowing down.
Our Coldwell Banker Residential Brokerage luxury market reports this month found double-digit sales gains all around the region in July. Silicon Valley saw a 28 percent gain from a year ago with 195 homes selling for $1.5 million or more.
The upper end of the luxury market in the valley remained solid with 84 sales of more than $2 million, up from 73 a year ago. Other indicators were positive as well with homes selling faster on average and sellers receiving a higher percentage of their asking price.
Silicon Valley’s luxury sales gains were actually outdone by Marin County and the East Bay last month. Marin posted a 56 percent year-over-year increase with 130 million-dollar homes changing hands. Sales of multi-million-dollar homes were even stronger, nearly doubling in July from a year ago.
The East Bay set the pace last month with an astonishing 76 percent sales gain over last year, with 291 million-dollar transactions in Alameda and Contra Costa Counties. The East Bay’s total was the highest level since Coldwell Banker launched our luxury reports prior to the recession.
We’ll report out on San Francisco’s luxury market at the end of September when we issue the city’s quarterly report on $2 million properties. And it will be interesting to see if The City follows suit with strong sales gains.
Below is a market-by-market report from our local offices:
North Bay – There has been increased listing activity in anticipation of a post-Labor Day rush, our Central and Southern Marin manager reports. Agents are seeing strong activity in all price points. The average sales price in certain areas is rising and in some cases exceeding prices at the height of the market. Well-presented homes in desirable areas are still the most valued properties. Our Petaluma manager says the number of multiple offers has diminished to two or three per presentation. In Sonoma County, properties selling over $1 million for the month of August: 56 so far. That’s a record number over the past two years beating last month’s record of 45. The million plus market is robust. According to our Sebastopol manager, the market appears to have slowed just a little bit with the start of school. New listings continue to attract large crowds at their initial open house. Price, location and condition still dictate which get offers and which don’t. We continue to see overbids, which the sellers want to accept only to find out the property will not appraise. One listing, a short sale, was bid up so high it was no longer in short sale territory so the sellers decided not to sell.
San Francisco – Our Market Street manager reports all quiet on the western front as buyers and sellers prepare for the Labor Day weekend. We continue to see multiple offers on many properties (anywhere from two to 11). Some buyers are definitely getting fatigued, and are removing themselves from the market. Hopefully there will be some relief and more listings will hit the market after the holiday. In the Sunset district, open houses are very active. Multiple offers are still the norm but the number of offers has dropped. The overall market condition is still very favorable as more listings come on the market.
SF Peninsula — Generally the new listing inventory is light on the Peninsula, which is a reflection of the rolling school openings over the past two weeks and vacation wrap ups. The multiple offers have diminished to a smaller number per property, which seems like in many cases buyers are showing resistance to price points that seem too high. San Carlos and Belmont are seeing growing interest from these buyers who are looking south of Burlingame and Millbrae for more value. Hillsborough is very quiet; it seems to be in waiting mode for school openings and vacations to finish. There are few new listings coming to the market right now. Burlingame Previews price points are pushing higher with some beautiful inventory priced at $2.5 to $2.8 mill. This challenges Hillsborough at dollars per sq. ft. and will be interesting to watch. Multiple offer situations are a mixed bag, our Burlingame North manager says. Some markets, generally at entry-level price ranges for the location, are still receiving many multiple offers. Other markets, generally at the higher level of price ranges for the location (except for the ultra expensive market), are receiving a lesser amount of multiple offers, but still considerably over the asking price – usually approximately 3-4 offers. S-L-O-W is the word for the local market, our Menlo Park manager says. Most open houses have medium attendance except the A-plus areas. New construction in Central Menlo Park at $4.2 million had 50 people plus each day over the weekend. Traffic has been very heavy still on new listings on the mid-peninsula, according to our San Carlos-Redwood City manager. There are many buyers in the $1,000,000 to $1,400,000 range. The only properties that are not selling quickly are either overpriced, do not show well or are located in a less desirable location. The San Mateo area has been quiet somewhat as we approach Labor Day. But a home listed for $878K in San Mateo Village sold with nine offers – the lowest was $930K – with two offers over one million. The buyers are still out there. The Woodside-Portola Valley market is quiet with so many people gone for the end of summer vacation. Showings on the high end are happening but buyers are walking away saying prices are still too high.
East Bay – The August market was slightly slower than the previous summer months, but our Berkeley office recently received 37 offers on a fixer, mostly all cash offers from investors. New listings are coming in and lots of “coming soon” scheduled for the fall. The $1-1.3 million market is active. Properties listed just below one million are often going over to $1-1.2 million. The San Ramon Valley has slowed somewhat, a combination of end of summer and back to school, according to our Danville office. Our Oakland-Piedmont manager says there has been a slowing in the last week but it appears mostly to do with the dog days of summer – the last chance to get out of town and the impending Labor Day long weekend. Lots of new buyers are still coming to the market and open homes are well attended. It appears that there is an influx of inventory coming on after the holiday, but that’s been the rumor several times before and it has not materialized. The Lamorinda market remains steady. Our Walnut Creek manager says agents are starting to see a spike in listings and sales with the summer lull looking like it is coming to an end. However, the local Previews market seems to be slowing a bit.
Silicon Valley – Our Cupertino manager says things are a bit quieter lately, maybe in anticipation of the Labor Day Weekend. Lots of folks are out of town. Los Gatos agents have seen a huge uptick in activity since the schools have returned to session. A reasonably priced home in Monte Sereno listed at $1.9 million that had been on the market for over 100 days with no offers received multiple offers over the weekend and is now pending. Buyers and sellers are more serious now that summer is winding down and the kiddies are back in school. Inventory is steady in the San Jose Almaden area. August has been somewhat slow, although more sales happened towards the end of the month. The market has been consistent for homes under $2 million. The Willow Glen area listing inventory remains steady without much growth in the monthly inventory numbers. However many homes are sitting on the market with little activity and buyer traffic has slowed considerably. We are seeing buyers wait on the sidelines for the most desirable properties. Overall sales activity has slowed considerably the last two – three weeks. Agents are waiting to see what the next busy season will bring after the Labor Day weekend until just before Thanksgiving. Saratoga listings were down this week and the tour was very small. Our local manager expects a surge after Labor Day as we head into the fall and then beginning to scale back as the holidays approach.
South County – The South County market is stabilizing with a leveling off of an extreme period of appreciation, according to our Gilroy manager. While most properties that are priced well and in good condition are getting multiple offers, agents are having to help sellers set realistic expectations that a property may be on the market longer than one week. Agents are saying we are entering into what appears to be a more normal market. We have about two months’ worth of inventory and prices are leveling off. Morgan Hill agents are reporting that attendance at open houses continues to be impressive. There are lots of “lookers” but agents are also indicating that buyers seem to be reluctant to actually write offers. Increased interest rates have certainly impacted the market, but as listing inventories continue to improve, buyers now have the convenience of not having to “jump” on a property as soon as it is listed. These two factors have impacted the South County market significantly. In addition, new home developments seem to be springing up throughout the area—giving potential buyers even more homes from which to choose.
Santa Cruz County – Local market activity is steady. July sales in the county were up year over year 33% for July 2012. Lack of inventory continues to hold back sales, although the unsold inventory index has risen from 2.9 to 4 months, creating more pricing stability. The Previews high-end market is picking up with 12% of the county’s sales over $1 million.
Monterey Peninsula – This week our Monterey Peninsula offices had several closings in all price ranges. Ratified contracts are picking up with fewer falling out of escrow. There hasn’t been a flurry of activity but enough to keep the market humming along. Inventory has increased but buyers are still looking for that “bargain buy” that probably does not exist.