Bay Area home sales slow in November as inventory falls
Sales of Bay Area new and existing homes last month fell to the lowest level for the month of November since 2008, according to a new report by CoreLogic DataQuick, the La Jolla-based real estate information service company. As we’ve seen out in the trenches, the sharp drop in inventory is the primary cause of the slower sales, although DataQuick also blamed cautious buyers, a challenging mortgage market and a “quirk of the calendar that resulted in a relatively low number days for recording deals.”
According to DataQuick, a total of 6,003 new and resale houses and condos sold in the nine-county Bay Area in November 2014. That was down 22.0 percent from 7,693 in October of this year and down 9.9 percent from 6,659 in November 2013, according to CoreLogic DataQuick data.
DataQuick did note that a decline in sales from October to November is normal for the season. But this November’s sales decline from October was especially sharp because of a calendar issue with only 17 days on which home sales could be recorded at county recorders’ offices this November, compared with 22 or 23 days in October, depending on the county. Over the last decade, there has been an average of about 19 days for such recordings in the month of November.
The median price paid for a home in the nine-county Bay Area was $601,000 in November, the same as in October and up 9.3 percent from $550,000 in November 2013. DataQuick says the year-over-year increase was the lowest since May 2012, when it was 7.5 percent. The Bay Area’s median sale price peaked at $665,000 in June and July 2007 and dropped to a post-boom low of $290,000 in March 2009.
“We did see a continuation of long-term trends: Low supply levels, a dysfunctional mortgage market and dormant market categories. This could change fast, and the big question then will be just how much pent-up demand is out there. No one knows,” said John Karevoll, CoreLogic DataQuick analyst.
Here’s hoping that Santa brings us a lot more inventory for the coming year!
Below is a market-by-market report from our local offices:
North Bay – Our Greenbrae manager says if someone has ever questioned whether to put a property on the market soon before Christmas, versus waiting until the beginning of the year, this past week has given us the answer. One of our listings at $795,000 in San Anselmo received 21 offers. The winner was all cash, closed in 10 days at $1,070,000. Another listing in Corte Madera, priced at $850,000 received 11 offers yesterday. The lack of inventory prior to the holidays is making for a buyer frenzy. The average sales price in Marin just increased to $1 million. New listings have fallen off significantly as you would expect late in the year, our Novato manager reports. Buyers are still writing contracts and we are seeing a few multiple offers on well-priced homes. Our Santa Rosa Bicentennial manager says general seasonal slowdown is upon us. Inventory dropped to 1.8 months of supply due to the fact that new listings taken fell 35% month over month. Demand did slow, but not at the rapid pace that supply did. Our Santa Rosa Mission office manager says there’s steady activity but seasonally slowing market as we head into the holidays. Our Southern Marin manager reports that the general market has slowed down due to holidays and lack of inventory. The demand remains strong and if we can get listings on market in January, the market will become active/robust immediately.
San Francisco – There are fewer open houses because there are fewer listings – fewer sales, too – our Lakeside office manager reports. And the number of Buyers at open houses and crowding around well-priced listings is very high. We are seeing multiple offers on most properties. Our Lombard manager says it’s slower than most Holiday seasons. There is almost no new inventory coming on during the season. Though the holidays are upon us, those sellers with homes for sale are being rewarded with multiple offers and strong prices, our Market Street office manager notes. Due to the shortage of available inventory, even properties that went unnoticed are seeing renewed buyer interest and ratifying offers. With Christmas around the corner, most sellers are now waiting until the new year to introduce their homes to the market.
SF Peninsula – No inventory as is usual in December, according to our Burlingame manager. Buyers are still attending every open house that comes to the market and the fact that it’s December does not slow down the motivated families waiting for that perfect home. Our Burlingame North manager says the total number of closed transactions for Single Family Residences in San Mateo County for 2013 was 4,904. The number of closed transactions of San Mateo County SFR’s through November is 4,335. It would take 569 closed transactions in December to equal last year. 569 closed transactions in December would be an overly optimistic expectation based on past data. However, the total number of closed transactions for Condo/Townhouses in San Mateo County for 2013 was 1,559. The number of closed transactions of San Mateo County CIDs through November is 1,460. It would take 99 closed transactions in December to equal last year. Our Half Moon Bay manager says it seems like the market just went silent starting 12/1. Inventory dipped very low. There are currently 51 single-family homes for sale along the coastal area from Pacifica to Pescadero. Active Single Family Homes in San Mateo County is down to 248 as of 12/17 from 624 06/2014. Our Redwood City-San Carlos manager says there are a fair amount of buyers out there but this is the lowest inventory for a very long time – maybe the lowest inventory in the last 25 years. Many of the agents are traveling or just taking time off.
East Bay – Inventory has dwindled for the holidays, our Berkeley manager reports. Open houses are getting between 20-100 groups and buyers are still very active. Now is a great opportunity for a seller to put their home on the market with no competition. Multiple offers seen in every price point. Inventory is low in the Previews luxury segment, but buyers are still very active. One of our agents closed on a duplex in Berkeley – list price $1.3m, SP: $2,034,000, 10 day close, all cash with 16 offers. Our Danville manager reports surprising strength of activity so far in December. Buyers are still active and buying. New listings are selling quickly to multiple offers. Our Fremont manager says there’s very low inventory with a big decrease in new listings and sales. What has increased is the average sales price in the SFR market for the Tri-City area (comparing: November 2013 vs. November 2014) – Fremont – $960K (up 21%), Newark – $649K (up 22%), and Union City – $677K (up 11%). Our Oakland/Piedmont manager says while it is slowing down as we get closer to the holidays there are still plenty of buyers out there and deals are being made. Open house activity is still brisk. Indications from the people in the trenches (stagers, painters, handymen etc.) is that inventory should be rising after the first of the year. They are all booked and working hard to get homes ready.
Silicon Valley – It is definitely holiday light, our Cupertino manager says. Between our office remodel and lack of inventory, our manager is looking forward to renewed energy in 2015. Our Los Gatos manager says activity is slowing just a bit as the consumer focus is switching from buying real estate to other holiday gifts. In San Jose, the sold average price for Almaden is only up 3% over December of 2013 but up 10% over last month. The list average price for Almaden is 38% higher this year over last year and 19% higher than last month. Blossom Valley has seen an increase of 9% in sold average price over the same time last year and is flat compared to last month. The list average price is down 6% over the same time last year and down 4% from last month. The market is red hot in many areas of San Jose, our San Jose Main manager notes. Willow Glen and Cambrian are seeing multiple offers with homes going 10-15% over the asking price. Open homes are well attended even with the holidays. Serious buyers are out in force. Inventory is very low. All signs point to a strong start to 2015. The local Willow Glen market along with all the surrounding local mini markets are continuing to experience contracting active listing inventory, the story has pretty much been the same from the previous weeks – active listing inventory shrinks as the weeks move closer to year end. Our Willow Glen manager says they are at record lows for active listing inventory in Willow Glen this past week’s count was 32. We are also only seeing 2-3 new active new listings coming to the market this past week. As we get closer to the year-end it is highly likely this trend will continue.
As for the buyer side still strong demand busy open houses and yes multiple offers going well over asking list price.
South County – As the year comes to an end the “big story” remains the lack of inventory. Many South County agents are working with buyers who are ready and willing to purchase a home but, unfortunately, find that there is little or nothing to show them. The list of available homes for sale is at an all-time low in both Morgan Hill and Gilroy. One reason is that home sellers are reluctant to put their homes on the market because of the difficulty in finding a replacement or “move-up” home. One bright spot is that this phenomenon is taking place during a season of traditionally slow activity. Agents seem optimistic, however, that the new year will bring a revitalized and strong inventory enabling buyers to satisfy demand and which will also enable move up sellers to find appropriate properties.
Santa Cruz County – The inventory of homes on the market is low and demand continues to be high. Demand continues to be strong with about 30% of sales being all cash purchases. Interest rates continue to stay low and the affordable range of homes for sale are seeing very low days on market. Some luxury properties are receiving multiple offers when priced well and depending on the views and amenities of the property. There is a low inventory of luxury homes available.
Monterey Peninsula – Our local offices closed escrow on two Previews properties this week in the $4-5 million price point. The high-end buyer is still shopping in this area with some great deals to be had. Many realize the benefit of buying an existing property and updating and personalizing to their taste. We have the vacant lots still available in Pebble Beach for those that want to build from the ground up. Our Carmel and Coastal properties are getting the most attention at the moment, as they say, they are not making anymore of them, so demand is high. Agents are looking forward to several new listings after the New Year, it will certainly help inventory that is still on the low side.