Homes prices all across the country have rebounded sharply from the housing downturn. CoreLogic, a real estate information firm, reported that over the past year, prices rose in 371 of the 401 metro areas it tracks. But 10 metro areas, as defined by the U.S. Census, have experienced the sharpest increase, ranging from 11.4 percent to 20.5 percent, according to Kiplinger magazine.
Not too surprisingly, the San Francisco metro area leads the list with the median price up between 13.4 percent and 20.5 percent, according to the magazine. In fact, their survey found prices have come all the way back – or even surpassed – their peak levels of 2006 in many communities.
“Demand has outstripped supply in the nation’s most-expensive housing market for decades,” Kiplinger reports. “This is what happens when high population growth meets geographic and regulatory constraints on new housing construction.”
The publication said that another tech boom fueled by an influx of social media companies to the Bay Area (San Francisco, Oakland, Vallejo) is again driving up home prices.
“Workers seeking more-affordable housing have pushed up prices in the East Bay, including Oakland and Vallejo, although they have a ways to go to recapture value lost because of the foreclosure crisis and Vallejo’s bankruptcy in 2008,” Kiplinger said. “Inventory in the Bay Area is super tight.”
The Santa Rosa area, considered a separate metro area by the Census, ranked number six on the list with a 12.3 percent increase in median price over the past year. Kiplinger attributed the rising prices to a number of retirees who have resettled from the more expensive Bay Area, as well as “pre-retirees” who vacation in the area and purchase second homes, and steady job growth.
The publication does note that that rapid price increases over the past year or two have mostly slowed in the Santa Rosa area. It says that the housing market is more normal than it has been in a long time, although sellers are still in the driver’s seat with low inventory levels.
Here’s a link to the Kiplinger survey for your reading enjoyment.
Below is a market-by-market report from our local offices:
North Bay – The market activity has increased after a slight slowdown over Labor Day weekend, according to our Greenbrae manager. More inventory came on the market following Labor Day, but most every new sale in our offices has been multiple offers, often going well above the list price. The luxury market is healthy and thriving. A number of Previews listings that went on the market last week have received multiple offers. It is still a market that is lacking good inventory and when a desirable property comes on, it will get great activity and multiple offers. Sales continue to be steady in Novato/ North Bay. It was slow over the Labor Day week as expected. Listings are still very challenging. Agents are expecting a slight increase in activity over next few weeks. The Sebastopol market appears steady. As usual proper pricing, location and condition rule the day. Open houses continue to be well attended especially those being held open for the first or second time. The agents report fewer unattached buyers. The agents also report more and more out of area agents sending their clients to open houses or asking the local listing agent to show the property to their buyers. In the Previews market, offers below asking price are becoming the norm. The Southern Marin market settled into its summer lull for August, which was actually a leveling off from the peak of spring/summer. We will see a gradual slowdown as we approach the holidays, our local manager predicts.
San Francisco – Our Lombard office manager reports lots of new high-end properties have come on after Labor Day with about 80 new homes and 70 new condos hitting the market. It may be time to resurrect burned out buyers, he says. A wide variety of transactions this week from a solo deal on an older listing to 22 offers on an entry-level fixer.
SF Peninsula – Our Burlingame manager says September started out a bit slow with a very small list of new properties to preview on Sept. 2nd. Open homes were very well attended on Saturday but were quieter on Sunday…could it be the Home Opener for the 49’s? Agents are reporting buyer concern that Burlingame prices may have caused buyers to look in San Carlos and Belmont for greater value. As the fall market settles in, this will be a trend to watch. Hillsborough currently has 37 active and 16 pending listings, reflecting a lower than normal inventory. We expect some new listings in the next few weeks as the fall market kicks into gear. Our Half Moon Bay manager notes that in San Mateo County, inventory is continually decreasing. For example, total active single-family resident listings were averaging 624 at the end of June through mid July. At the end of July it went down to 563 and continued downward throughout August, and as of Sept. 8 it’s down to total 517 active single-family residences for sale. Generally August was a slower month in listings and sales. There were less cash transactions and less multiple offers. In coastal cities such as Half Moon Bay, El Granada, and Montara, the Previews Market is strong. In Menlo Park, agents are still getting a number of rejected offers submitted to the office so agents are out there working. There is no slow down in the number of multiple offers on properties in Palo Alto. Prices continue to climb to a historic high. Inventory is starting to slow. Inventory seems to be growing ever so slightly in the Redwood City-San Carlos area. Woodside and Portola Valley were busy for Labor Day week.
East Bay – In the Fremont area, listing inventory continues to be low. Sales price are still in the leveling off trend with the Union City market showing the most dramatic drop. Our Oakland-Piedmont manager says open houses are becoming busier after a quiet August. More properties are coming on the market but the number of buyers, especially from San Francisco, is still strong and many listings are still in multiple offer situations. Agents are finding themselves with clients that have hard deadlines to find a house and are writing many offers a week and upping the ante until they are successful.
Silicon Valley – Our Cupertino manager reports that quite a few new listings were announced at her office meeting today. Things continue to be highly competitive in the overall market, while the Previews luxury market is steady. In the Los Altos area, sales activity is still steady. There are not as many multiples on properties, but prices continue to be steady. List prices have come off the lowest, as sellers are not willing to take that list price, so the bottom offer buyers are not making offers. More buyers coming to houses priced under $1M, in areas like Santa Clara and San Jose. There are new high median prices in median for Sunnyvale and Cupertino listings. Median prices are not increasing in Los Altos or hills. More high end inventory coming on in Los Altos Hills – three new listings so far this week over $5M and there were three last week. Some buyers are choosing to wait now for the right house in the Previews luxury market, but Palo Alto school district and Los Altos Hills still seeing strong demand. In Los Gatos, multiple offers continue to remain the norm on properties that are priced at fair market value or below. Inventory in the San Jose Almaden area is down from last year although we’re not seeing a lot of multiple offers. But agents are seeing a spike in Previews homes in Almaden with 6 homes over $2 million pending. The post Labor Day weekend started with a bang in the Willow Glen market. Our local office posted one of its busiest weeks with new open sales and new listings coming to the market. Listing inventory has been consistent week to week. The issue is all new listings are being consumed as they come on, thus agents are not experiencing any type of net gain on new listing inventory. In the Saratoga area, the local market is healthy, especially under $2.5 million. Those above $3 million are also selling better than in recent years, but fewer buyers in that price range is still the norm.
South County – During the past year the lack of listing inventory significantly impacted South County’s Real Estate market. As the year progresses, however, it seems that more and more homes are being offered for sale. Buyers now have the opportunity to be a little more selective and are taking their time in making offers. Homes that only six months ago sold with multiple offers, now are lingering on the market and many remain unsold. Price reductions, unheard of at the beginning of the year, are now a common occurrence. This swing from a sellers’ market to a more balanced and equitable market is not surprising or unexpected. As the rate of increase in home prices slows and interest rates remain low, the market is now much more favorable to buyers. In addition, buyers are finding that property in South County (Morgan Hill, Gilroy and San Martin) remain a good value in comparison with the rest of the Bay Area. Lower prices, good interest rates and a healthy inventory are all factors why the South County market remains an excellent choice for homebuyers.
Santa Cruz County – Well-priced homes in the upper end of the local market are getting offers and for the most part going pending in a relatively short timeframe. Overall, new listings are coming on fast and furious but demand has kept the inventory at low levels.
Monterey Peninsula – Sales volume in August this year was up slightly from last year in the local market, with unit sales even and average sales price just over the $1 million dollar mark. The softening seems to be due to tighter inventory and buyers feeling the increase in values and the “hindsight is 20/20″ phenomenon, feeling they could have bought that property last year for much less. The trade up sellers are feeling the same and looking for very high prices for their property in order to justify the trade up price, our local manager believes. The median prices in most of the local areas are back to the 2006 era prices, so we are seeing a steady recovery, but values as compared to the Bay Area are still relatively inexpensive for a full time or part time residence in this area. The entry-level properties are still getting a lot of attention. If it is priced well and in good condition this market is still attracting the investor and first time buyers.