As the Bay Area’s housing market continues to heat up once again, it’s catching the attention of the local news media in a big way. Just in the past week or so I’ve been on KQED, the local PBS radio station to speak about our market, and have been interviewed by the San Francisco Chronicle, talking about why the housing market is rebounding in such a big way.
In a front-page story in Thursday’s Chronicle entitled Bay Area Home Sales, Prices Surging, reporter Carolyn Said reported on the extremely strong housing numbers just released by DataQuick, the La Jolla-based information services company, and examined what is driving the housing turnaround.
In its monthly report, DataQuick said the median sale price in the Bay Area in December rose to $442,750, a stunning 32 percent increase from a year ago and the biggest jump in 25 years of record keeping, according to DataQuick.
Additionally, sales increased year-over-year for the 18th month in a row, climbing 4.5 percent last month. In fact, San Francisco and Santa Clara County both recorded double-digit sales growth year over year at 29.5 percent and 13.1 percent, respectively.
It’s good to see the Bay Area news media on top of this story, but what’s especially gratifying is that they’re getting out the message that we have a severe shortage of homes for sale in the region and sellers are getting good prices for their homes once again.
As all of our sales associates know all too well, there just aren’t nearly enough listings to meet the surging demand of buyers. And the Bay Area isn’t alone in that regard.
A look at unsold inventory statewide tracked by the California Association of Realtors found that listings were down to just 2.6 months in December, half of what they were a year ago and down precipitously from their lofty level of 7.5 months less than two years ago.
The more headlines and stories that spell out the critical need for listings, the better.
My hope is that homeowners who have been sitting on the sidelines will begin to realize that this market presents a tremendous opportunity for them to get top dollar for their home. Right now, it’s a red-hot seller’s market. But as we know, it won’t always be that way. If traditional patterns apply this year, there will be some added inventory in March / April. This will bring more opportunities for Buyers, but also brings additional competition between Sellers, as compared to today.
Below is a market-by-market report from our local offices:
North Bay – Our Central and Southern Marin manager echoes the sentiment of others – not enough inventory to meet buyer demand. Now really is the time to put a property on the market instead of waiting for spring when the buyers will then get to pick over their favorites, he advises. Low, low inventory in Sebastopol. One new listing had 8 offers and they were all cash. Another new listing garnered 5 offers, and 4 were cash. Agents are pulling out all stops searching for sellers but the buyers are piling up like cordwood.
San Francisco – Our Lakeside office manager says somehow agents are continuing to come up with more sales even though there is virtually nothing on the market publicly. Several agents last week with buyers found a property by canvassing the buyers’ top choice neighborhood. Buyers, Sellers, and agents seemed to have taken the last two weeks off after a big year-end flurry of closings, our Lombard office manager reports. Record-low inventory, but hoping a post-cliff, post-football season will bring on some new stock. Our Market Street office says that with the holidays over, listings are starting to slowly increase, but not nearly enough to meet the buyer demand. As such, offer dates and multiple offers remain the order of the day.
SF Peninsula — Our Burlingame office said the local market is still so very tight in all cities. Pre-emptive offers are happening as buyers will do whatever it takes to secure a property. Our agents came straight back to work from the holidays and hit the ground running. A few new listings came to the market this week in Hillsborough. The inventory that came off the market for the holidays has yet to come back on so a well-positioned property is getting attention and showings. The overseas cash is back and looking now. Across the hills in Half Moon Bay, agents are gearing up for the new year with listings on the horizon. We’re seeing strong activity from Peninsula buyers looking for an area they can purchase a home without so many multiple offers. Our Menlo Park manager says agents are busy with new-year sales. Top agents are slammed. More listings seem to be coming on than anticipated and that’s good. Inventory is at an all-time low, reports our Palo Alto manager. Open houses are very busy – lots of buyers out there ready to buy. Our Redwood City–San Carlos office says it’s been a sluggish beginning of the New Year – everyone is out looking for potential listings. Without inventory, both open houses and sales activity are affected, our San Mateo manager says. There is some promise of inventory but not in the numbers agents need.
East Bay – At the beginning of the year, there were only 19 homes for sale in Berkeley and only 2 were new listings. Six of the 19 are distressed sales (REO’s or short sales), with 3 being REO and 3 short sales. There has been a .4% month’s supply of inventory for a while now. With many visitors to the few properties and multiple offers on many, it is a real supply and demand illustration of a Sellers’ Market. The Oakland-Piedmont market is still teeming with anxious buyers and not enough homes to buy. Open houses were slammed this week with several properties having over 100 groups through. This resulted in agents speaking with groups and not individual buyers coming through. One agent has been calling clients she has had over the last couple of years talking about the rising value of their properties. This has resulted in a listing that sold well over expectations in a week (with 25 offers) and two previous sales that were going to be short sales in to non-distressed sales. Inventory continues to be the focus for Orinda. Market appears to be slowly ticking upwards. Multiple offers everywhere, our Walnut Creek manager reports. Buyers are starting to feel less hopeful in regards to getting their offers accepted. This leads to buyers making offers over asking. In some cases they are also paying over appraised value, reminiscent of 2005.
Silicon Valley – Lots of buyers and nothing to sell, our Cupertino manager laments. Great news, our Los Gatos manager says: Prices are up across the board in Santa Clara County. The average sales price for single-family homes in Santa Clara County for 2012 was $834,417 up 12% from $743,893 in 2011. Average sales price for condos and townhomes in Santa Clara County for 2012 was $413,725 up 16% from $356,112 in 2011. Our San Jose-Almaden manager says inventory keeps decreasing with just about every offer being a multiple offer. Our Willow Glen manager says agents are seeing a steady stream of new listings coming into the office and are anticipating listing inventory will continue to increase as January turns into February. Crowded open houses are the norm with multiple offers taking well-priced homes well over asking price. Even homes that are priced what seems to be on the high side are still selling quickly. Agents are running out of seasoned listings as everything is selling. Santa Clara County is near a record low number of active listings with 623 actives, second lowest ever.
South County – The markets in south Santa Clara County are taking some time to wake up after the holidays. There are only four properties that have closed escrow in all of Gilroy since January 1. There are 12 new listings for a total of 39 homes to sell. 45% of those are the luxury market in the area. So, it is slim pickings for buyers. New construction is nearly all sold out with only one homebuilder with an active subdivision left. There is one large subdivision coming in the spring-summer 2013 that should provide us with some new inventory. San Benito County has only 12 escrows that have closed since the year started and only 14 new listings coming on the market since then. The listings that are coming on are all receiving multiple offers. One entry-level home in Gilroy received 40 offers. On January 17 there were just 41 homes for sale in all of Morgan Hill, only two of which were distressed listings. In December available inventory was well below one month—a healthy and normal figure is a three-month inventory index. In addition, pending sales are outnumbering new listings. All of this, of course, is driving prices up. The average sales price of a single family home in Morgan Hill is up over 20% from that just one year ago. The seller’s market continues but most agents are hopeful that potential buyers will realize that the time is right to list their homes.
Santa Cruz County – Low inventory levels continues to be the driving force in this market like other areas in the Bay Area. This is the biggest challenge the agents are facing and we have been having a lot of conversations about how to identify sellers who do not have their homes listed but may be interested in selling. Agents are having to be creative to find interested potential sellers, and match those people with the buyers looking in a specific area and price range, and experiencing success with that effort. Our local office had several “off market” sales and this is all due to the agents taking that extra step and hunting down those sellers. Inventory levels are down 26% from a year ago and agents don’t see a lot of change in that trend so far. However, they are expecting the best as we move toward warmer and sunnier days. Sales overall in Santa Cruz County for single-family homes year over year were up 18%, and that is wonderful news. The agents are optimistic and expecting that trend to continue as we move further into 2013.
Monterey County – While there was a bit of a lull over the holidays and start of the new year, the beat has picked right up and our agents on the Monterey Peninsula are once again busy showing properties and writing contracts. The high-end Previews market is also showing improvement as the year gets underway.
That’s it for now. It’s often said that the market doesn’t really come alive until after the Super Bowl. Let’s hope that holds true for a pickup in inventory! Have a good weekend, and a great Pre- 49er Super Bowl week!