Another Record for Bay Area Home Prices, New Report Shows
Bay Area home prices continued to move higher last month with the median sale price of all homes (new and resale, houses and condos) hitting yet another record, according to a new report by CoreLogic, the Irvine-based real estate information firm.
The median price paid for all homes sold in the Bay Area in June 2016 was a record $712,000, the third straight month it hit a new high. Prior to this spring, the peak median was $665,000 in June and July of 2007, CoreLogic reported.
The June 2016 median price was up 1 percent month over month from May and up 7.9 percent year over year from $660,000 in June 2015. The median sale price has risen year over year for 51 consecutive months, according to the firm.
The biggest bump in prices came in San Mateo County, where the median sale price jumped 13.2 percent from a year ago to hit $1,070,000. Sonoma County saw a 9.1 percent hike, Contra Costa County was up 8.2 percent, Alameda County 7.6 percent, Solano County 7.4 percent, Santa Clara County 4.5 percent, Marin 3.2 percent, and San Francisco 2.6 percent. Napa County’s median sale price was the only one that dropped, falling just 0.9 percent from last June.
Sales last month, meanwhile, fell 6.5 percent from a year ago as the market continued to deal with low inventory levels. But the 8,679 sales in June 2016 was up 8 percent month over month from May. Although it’s normal for sales to increase between May and June in the Bay Area, last month’s jump was greater than usual.
Andrew LePage, research analyst with CoreLogic, said it’s important to put the record sale price numbers in context, noting that when adjusted for inflation, the region’s median sale price last month remained more than 10 percent below its prior peak nine years ago.
When adjusting for inflation, three of the most expensive counties – San Mateo, Santa Clara and San Francisco – did log record median sale prices in recent months, while the medians in the region’s six other counties remain 7 percent to 38 percent below their peaks.
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Buyers in the Novato area are waiting to make offers if they sense a property is overpriced, our local manager says. One property this week had multiple offers after a large price reduction. Many sellers are starting out with inflated prices only to reduce after a few weeks on the market. Open houses are still quite busy, even with the slow summer activity. In Novato, there are 42 properties in the $1M-$3M range with an average 73 days on market. The luxury market has stalled over the past few months with only 30% of the luxury properties under contract. The area is experiencing price reductions and more days on market.
San Francisco – Summertime and international and national uncertainty have brought a slower pace, but the market remains healthy to date, our Lakeside office manager says. There has not been much change in the last two weeks, our Lombard office manager notes: The entry and mid-level SFH market remains very strong with the vast majority closing over asking. Going the other direction, the number of condos for sale is twice the number of a year ago. That is definitely affecting traffic, offer numbers and sales prices. Like the high-end homes, condos are seeing longer days on market and numerous price reductions. New construction price indices are down about 3% year-on-year. Our Market Street office manager reports the summer doldrums continue in SF. While one exceptional property received 24 offers, others are having price reductions or being withdrawn from the market. Open houses and broker tours continue to be well-attended, which shows that there’s plenty of interest out there. However, buyers seem to be waiting for a great price or an exceptional home before putting pen to paper. With all that, prices remain steady.
SF Peninsula – The upper Peninsula housing market experienced a slight slowdown when Britain announced it was pulling out of the EU, according to our Burlingame manager. But once the panic subsided, and the stock market rebounded, sales began to increase as well. Our Menlo Park manager says it’s quiet after the July Fourth holiday still. The busy sales periods seem to be getting more compressed as the area becomes wealthier. Everyone is out of town – the July 4th holiday extends until labor day – it’s just a slower market period. September will be telling, especially with the elections. Inventory is rising in the Palo Alto area, and there are more negotiations after escrow opens. Definitely an adjustment is underway in the local market, our Redwood City-San Carlos manager reports. Fewer and fewer multiple offers (which is not a bad thing as long as there are still offers). It’s extremely important to present a property in its utmost best condition and to make sure the list price reflects the current market. The summer slowdown continues in the San Mateo area. Listings have slowed a bit, but there is still a lot in the pipeline – maybe 20 or so waiting on paperwork. The Woodside-Portola Valley markets are slow and sleepy – everyone is out of town. Our manager expects more activity in August as people may not wait for September as the elections make people feel uncertain.
East Bay – July inventory and sales activity remains steady, reports our Danville manager. Inventory supply is still relatively low, although some properties are taking longer to sell and require a price reduction to get the job done.
Silicon Valley – Not many agents on tour or in the office, reports our Cupertino manager. But sales are steady and open house traffic is good. Our Los Altos manager said recently he’s seen less new inventory coming on the market. And although he’s seen a slight slowing of market activity, he still categorizes the market as robust. There is strong activity on properties in move in condition and priced to sell, resulting in multiple offers that typically achieve a sale price that is over asking. Some sellers are hoping to test the market by listing their homes at higher prices than previous sales and pendings. As a result, there are more price adjustments of late, but they still only make up a smaller percentage of the market. In short, the local market is just experiencing normal supply and demand fluctuations. The luxury market (homes priced over $3.5M) is steady but flat – with days on market increasing and frenzied bidding or multiple offers being the exception as opposed to the rule. Los Gatos area buyers are seeing less competition with other buyers as we head into the summer months. The San Jose Almaden market continues the trend of inventory increasing and pending sales lower than the previous weeks. Santa Clara County currently has 1,856 homes (SFR & C/T) available for sale. There hasn’t been that many properties available for sale in the County since September of 2014. The average sales price has been lower for this area compared to last month and July 2016 for the most part. Almaden has an average sales price of $1,341,000, which is down 5.5% from last month as well as last year (July 2015). Blossom Valley has an average sales price of $701,000 for the month thus far, which is actually up 4% from last month and 2% from last year. Cambrian has an average sales price of $921,000, down 9.5% from last month and 3.5% from last year. Santa Teresa has an average sales price of $700,000, down 8% and 3% for last month and last year, respectively. Our San Jose Main office manager says the market is steady as the homes that are priced at or below market are getting all the attention. There are still many buyers who want to take advantage of historically low interest rates. Buyers will not look at homes that might be priced even a tad over the market. Buyers will wait for price reductions before submitting low offers as sales price vs. list price is around 98%. The Willow Glen market continues to consume new listing inventory. There has been a contraction of active inventory with less than 90 units. Our local manager was anticipating an increase in inventory post the 4th of July week, but it just hasn’t materialized. The market is very hot under the $1 million price point. Multiple offers are back with agents setting offer dates to review offers again. But there still is some languishing inventory above the $ 1 million price point. After a slower 4th of July week, the Saratoga area market is picking up again – as are listings in the high-end.
Santa Cruz County – The days on market for affordable homes is shorter than it has been all year, at nearly 30 days. This represents one of the shortest days on market numbers since the MLS has existed. The average sales price has stayed consistent around nearly $900,000. The Previews luxury market is slowing down a bit in the recent month with days on market increasing and the supply of active homes on the market increasing as well. There is still demand, however buyers are not bidding up properties like they were earlier this year.
Monterey Peninsula – The local market has definitely felt a slight slowdown but it actually is feels more like a “breather” for escalating prices, according to our local manager. Sellers are realizing that if they are not getting the offers or showings, their property is ready for a price adjustment. The Carmel Valley market continues to move quickly with several closings in the last 30 days. The Pacific Grove market inventory continues to be very tight with more buyers than properties available. Our office just closed a Pebble Beach estate for $7 million that is literally tear a down. The out of area buyer recognized the value in the location and is building their golf dream vacation home. Our out of area visitors are looking around at values and see that the quality of life as compared to other coastal areas is still a great value compared Southern California and the East coast.