So much for a Spring break in the housing market! Home sales and median sale prices in the Bay Area continue to rebound, with much of the improvement coming from the mid and even higher-price ranges, including our Previews luxury market.
MDA DataQuick, the La Jolla-based research firm, reported that March sales and prices hit a three-year high in the Bay Area region. The median price of $380,000 paid for a home was 31 percent higher than a year ago. Some 6,992 new and resale single-family houses and condominiums closed escrow in March, up 40.2 percent from February and up 10.5 percent from March 2009.
As I said in an interview with the Contra Costa Times, what is particularly encouraging about the latest report is that there were more sales of medium and high-end non-distressed properties and fewer foreclosures compared to a year ago. Foreclosure resales accounted for 31.7 percent of Bay Area existing home sales last month, down from 36.3 percent in February and 50.2 percent from a year ago.
We’re seeing improvement in higher-priced markets from Carmel through Silicon Valley and up to San Francisco and Marin. Cupertino reports that open houses are “insane” with 100-plus groups in some cases viewing properties and multiple offers surging despite an increase in inventory. I’m hearing similar stories in Saratoga, throughout Marin, The City, and even markets like Livermore, where there have been eight million dollar sales through March compared to two last year.
I think buyers are becoming more confident about purchasing a home now as the economy continues to show positive signs of a recovery and the stock market moves higher. Additionally, buyers are jumping into the market to take advantage of tax credits as well as mortgage interest rates, which could rise in the months ahead.
It’s important to remember that any road to recovery has its share of obstacles and potholes. There are still challenges ahead to the housing market, including stubbornly high unemployment and the expectation that another wave of bank-owned properties could hit the market in many areas before too long. Still, I am encouraged by the DataQuick report and our own updates from the field that we’re moving in the right direction again.
Here’s the Contra Costa Times article: http://www.contracostatimes.com/business/ci_14890565
Below is a market-by-market report from our local offices:
SF Peninsula— In Burlingame, multiple offers are happening every day in the $600,000 to $1 million range, as entry level buyer are scrambling to meet first-time buyer deadlines. When the price is attractive enough, open homes are drawing big crowds. We had one Millbrae home open in pouring rain with over 60 attendees. Consistent activity at all price ranges was reported in Redwood City. Open houses have been well attended there regardless of Easter and pouring down rain. The market in Menlo Park is mixed. Spring break combined with Easter weekend caused the market to slow slightly. However, good new inventory is still flying off the shelf. There were a few multiple offer sales the last couple of weeks. Buyers are out there, dipping their toes in the water. Sales and inventory are also steady in Half Moon Bay. In Palo Alto, the market has mirrored the spring school breaks – the last week or so has been relatively slow for sales and inventory. But our local offices expect the north side of Palo Alto to have more sales activity in the near future. The south side is waiting for more inventory to hit the market.
San Francisco— Sales and inventory have been steady to increasing in many parts of San Francisco. The Market Street office reports lots of counter offers going back and forth before ratifying a property. Open house traffic varies widely depending on the property. There are many first time homebuyers still looking and this is the price point that has the most activity. The Lombard office reports early April has been erratic: One good week, the next one slow. Many deals have multiple counters. Open house traffic has been quite high. But sales are still facing financing challenges. Similarly, the Noriega office states that financing and appraisals continue to be an issue on some transactions. The SF Van Ness office has seen steady activity in all price points the past two weeks, including a single family residence sale in the $350,000 range (yes, that’s City of San Francisco) as well as several closings in the $4M to $6.5M range. At least one of the sales in the latter range had multiple offers. Also, a well cared-for and staged, but dated 1950’s home near Lakeshore priced about $900,000 had 13 offers, with a few at the top competing well over list price.
Silicon Valley– The Los Gatos market is picking up “dramatically.” Inventory is increasing in Cupertino with about a third of the listings that sell getting multiple offers. Open houses are “insane” with 100-plus groups in some cases viewing properties and multiple offers surging despite an increase in inventory. In San Jose-Willow Glen, sales are steady but inventory is still low. This is resulting in multiple offers, but it is a disadvantage to buyers. Saratoga reports a strong uptick in Previews sales over $1 million.
North Bay— Our Greenbrae office reports that activity in Central Marin is brisk. Inventory continues to come on the market and buyers are still finding some bargains. The Previews market is holding strong with multi-million dollar properties in Ross, Kentfield, and Tiburon/Belvedere attracting a lot of excitement. A similar story is being told in Northern Marin where 39% of listings went pending in the month of March in Novato. The majority of new inventory to hit the market is non-distressed. One home in Novato over $1.9 million went into contract. Things did slow down a bit with spring break in Southern Marin, but in general sales and inventory are up. The Petaluma market is starting to see a lot of activity in the $500 – $700K range. They are experiencing up to five offers on some homes and anticipate more inventory under $800,000 coming to market. Santa Rosa continues to see action in the lower price points and increased action in the high end. The middle of the market is still very quiet. Sales are on the rise in Sebastopol, but Easter week and heavy rain seemed to slow activity at open houses last week.
East Bay – Activity is good in Danville, but closings are still often challenging – lots of delays because of short sales and appraisal issues. The Windermere area of San Ramon is hot. A year or two ago there was lots of inventory and little demand. Now it is just the opposite. A new listing there got six offers in less than a week. Home sales above $800,000 in Livermore have been four times the amount of closed sales compared to 2009 through March. Our average closed sales price for the first three months in 2010 is almost 21% higher than the same period in 2009. Multiple offers are very common in Livermore, as we only have a 1.9 month supply of detached homes on the market at the current sales pace. Inventory is steady and sales are on the rise in Orinda, with entry-level properties continuing to move quickly. Fremont reports more REO’s than short sales. Even though right now the market shows a decrease in sales, compared to last month at this time it has increased.
Santa Cruz – Market inventory has been recently increasing along with sales activity. Well-priced properties are selling with multiple offers. However, the market is still showing signs of correction in the higher end inventory with price reductions occurring throughout the area.
Monterey Peninsula — Activity continues to be steady on the Monterey Peninsula and greatly improved over this time last year. Even the higher priced areas, like Carmel, are doing well as buyers become more confident about purchasing right now and want to take advantage of interest rates before they go up more, as is expected. However, we are expecting more REOs to come on the market in Seaside and Marina.
South County– Unlike some other Bay Area markets, the South County market remains steady to slow. In Gilroy, homes are staying on the market longer when initially listed. Buyers seem to be cautious when making offers. Some properties are still receiving multiple offers, but at less than list price, most likely due to appraisal concerns. Morgan Hill agents attribute the slowdown to the lack of inventory, lamenting that there are very few homes to show and those that are priced right and look good garner multiple offers and often sell for over list price. Though this is good for sellers, buyers are becoming frustrated and discouraged. On the bright side, prices are increasing as demand far out weighs supply.
A final note on the Previews Market: Activity and sales overall are on the rise. So far this year, Mill Valley has seen nine $2 million-plus properties close escrow, versus only three a year ago. There are currently 68 active and 18 pending Previews listings in Hillsborough. New listings in all price ranges are coming on the market and entry-level properties under $2 million are bringing in multiple offers. We are hearing similar reports in other higher-priced markets throughout the Bay.
That’s it for now. Have a great week!