Bay Area is Nation’s Fastest Selling Housing Market
Bay Area house hunters who have been pounding the pavement to get into a home probably won’t be surprised by this news: Bay Area properties are selling faster than anywhere else in the U.S., according to a recent study by Trulia.
In one more sign that we’re going through a red-hot seller’s market here, Trulia reported that the San Francisco, San Jose and Oakland metro areas are indeed the three fastest moving markets in the nation. It’s interesting to note that the top five markets are all in California (including San Diego and Orange County), and eight of the top 10 markets are in the Golden State.
As the San Francisco Chronicle points out in its story on the report, “With historic low inventory continuing across the nation, buyers aren’t waiting to jump on available homes, which means a trend of fewer days on the market (DOM).”
In its findings, Trulia said just 26 percent of homes in the SF metro area are still for sale after two months, followed by 30 percent in the San Jose metro area and the Oakland metro area. By comparison, Salt Lake City – the No. 10 market – had 45 percent of its listings still on the market after two months.
But many of our agents would probably tell you that Trulia’s DOM for the Bay Area markets is far too conservative. As you’ll read in local market reports below, it’s not unusual to see well-priced, well-maintained homes in good neighborhoods selling within a week or two – and with multiple offers over the asking price.
|America’s Top 10 Fastest-Moving Housing Markets|
|#||U.S. Metro||% of homes still for sale after two months, April 2015||Median Asking Home prices, April 2015|
|1||San Francisco, CA||26%||$1,099,000|
|2||San Jose, CA||30%||$800,000|
|4||San Diego, CA||33%||$549,990|
|5||Orange County, CA||41%||$699,000|
|8||Los Angeles, CA||43%||$549,000|
|9||Ventura County, CA||43%||$589,999|
|10||Salt Lake City, UT||45%||$299,900|
Below is a market-by-market report from our local offices:
North Bay – All price categories are still seeing multiple offers – varying from two to 10, our Greenbrae manager reports. The huge numbers of multiple offers seems to be dwindling due to buyer fatigue. Buyers are getting frustrated in writing offers, many writing offers for up to six or seven properties, and still not getting the property. We’re also seeing back up position offers going into primary, as multiple offers push the winning buyer beyond their comfort level, often creating buyer’s remorse. The Novato area market is starting to experience a steady increase of inventory. The past two weeks there have been far more properties on tour. There has been an uptick in sales activity due to increases in inventory and less multiple offers in the area. Our Santa Rosa Mission office manager says many agents are frustrated that the market is ultra-competitive for their buyers (writing many offers to get a property) and the low-end market has virtually disappeared with the median price in the county now at $541k, which is highest level since 2007. Some new listings in the Sebastopol area are seeing swarms of attendees. Agents report double and sometimes triple digit attendance. Properly priced inventory sells quickly and normally above asking price with multiple offers. It’s a great time to be a seller in Sonoma County. The Southern Marin general market has picked up with increased inventory, however unit sales are down 4.2% from a year ago and prices are up 4.3%. The Previews luxury market continues to be strong and steady and ahead of last year’s pace with average luxury sale prices (above $3 million) up 22.5%. This market thrives on high quality listings in desirable locations that are priced well. There are many off market transactions (non-MLS) in this price point, which may explain only a slight increase in unit sales.
San Francisco – Little change in the market over the past couple of weeks, or Lombard manager reports. Solo offers are rare. Some entry-level homes and condos going up to 30% over asking. A slight inventory bump in condos this week but the sales have kept pace. No long-term indications in SF for inventory relief. The market continues to strongly favor sellers, as buyers continue to tussle over too few listings, according to our Market Street office manager. Every property that ratified during the past couple of weeks did so with multiple offers (from 2 to 8). Open houses and Broker Tours continue to be well attended, as buyers and their agents continue to hope for a bump in available inventory.
SF Peninsula – Burlingame North agents are still receiving multiple offers on almost everything, but not as many competing offers for each property as they were experiencing earlier. However the overbids in most cases are still off the charts and can be as high as 30%-40% over the asking price depending on location, price ranges for the location, condition of property, etc. We’re sounding like a broken record but low inventory is still problematic in relationship to the demand. Across the hill in Half Moon Bay, inventory is still very low. Condo/townhome inventory is extremely low. Our office just had huge two sales in Menlo Park – a $9 million and an $11 million sale (both off market), to go along with a $19 million sale in Woodside. The high end, quality, first class, newish home market is almost insatiable. Agents still need more inventory in Woodside and Portola Valley. More cash deals and stricter lender guidelines create less fear of another ‘meltdown’ as prices climb.
East Bay – Our Danville manager says sales activity continues to intensify, and the Previews luxury market segment is doing especially well.
Silicon Valley – More inventory is coming on and things don’t seem quite as frenetic, according to our Cupertino manager. Agents have some good properties that are taking several weeks to get into contract. It’s time for those discouraged buyers to try again. In Los Altos hills some higher end homes that have been sitting for more than one month either have taken a price reduction or sellers agent says they are working on a reduction, our Los Altos manager reports. Entry level to under $3 m is still selling well, with a little extra time than 7-10 days of marketing. The high-end price is still top heavy. North and middle Los Altos is still selling in one week, unless priced above the last close of escrow price. Then the property is lasting more than one week. The median price range 2-3M still is selling, usually within one week of MLS. Prices don’t seem to be appreciating any more, just selling what the last property sold for. Mountain View prices remain level, although there are some homes that are still getting new highs, depending on location and condition. There’s not enough inventory to go more than one week. Condo/townhouse market prices reaching new highs still. In Sunnyvale there are not as many offers, and some houses are not selling for the highest price, also some only having 1 -2 offers. In Los Gatos, buyers are getting a break as more inventory hits the market. San Jose Almaden agents are still seeing multiple offers but not as many offers as the previous month. A neighborhood that had been getting 10 – 15 offers is now receiving 3 – 6 offers. Prices are still going over list price. Almaden inventory was down in April (from March) but is up in May over March and April). Blossom Valley inventory was down in April from March and is currently flat in May from April. Cambrian inventory is up 4 homes in May from April for a total of 44 available for sale. This is down 31% from last year. Our San Jose Main office manager reports the market continues to remain strong as inventory is limited and buyers are focused on the well-priced homes that come on the market. These homes are seeing instant activity in addition to multiple offers with offer deadlines. Those home where sellers priced their homes just the slightest over market are being shunned by buyers and many times have to over compensate to get back in the market. Buyers are very educated today and know market pricing. As the Willow Glen Market moves into the spring selling season agents are finally getting some relief with healthy new listings coming to the market each week. There are 58 active listings, the high water mark for 2015, and agents are seeing up to 20 new listings coming to market each week. With still strong buyer demand new listing inventory is eaten up each week, however agents are starting to see net gains each week in new listing inventory.
South County – This week the San Jose Mercury ran an article revealing that Silicon Valley CEO’s are planning a hiring spree this year. The article goes on to say that the job boom looks robust for this year and next. Of course this translates to more demand for housing throughout the Bay Area. Increased demand, coupled with the continued low inventory, however, will certain continue to drive prices upward. Even in the South County, where prices have been traditionally lower, there just isn’t sufficient inventory to meet demand. In Morgan Hill, there are currently only four homes listed between $600,000 and $700,000. In Gilroy there are only three active listings in that price range. There are, however, 44 homes listed in Morgan Hill for over $1,000,000 and in Gilroy there are 31 homes listed for over $1,000,000. All of these statistics give pause to potential buyers—as entry-level homes are hard to find and to purchase.
Santa Cruz County – The market is absolutely hot right now with multiple offers being presented on any property reasonably priced and relatively appealing. Compared to last year, April 2014 had 484 Active and 156 Sold versus this year, in which April had 386 Active and 179 Sold. Currently the month of May has a Sale Price to List Price Ratio of 110.8% with an average sale price of $748,004.
Monterey Peninsula – The last two weeks 38% of our Carmel area sales have been in the Previews price point over $1,500,000. This price point is still seeing new listings come to market with plenty to choose from. We have a few new clients in the $10-20 million price point looking for that desirable golf course or ocean front location that does not come along that often. Pacific Grove continues to be the most desirable market under the $1 million dollar price point with multiple offers on new listings.