Number of homes on market down as prices pick up

After several months of house-hunting in and around Cupertino, Sury and Suhasini Balasubramanian became disheartened.

“We were outbid quite a few times,” said Sury Balasubramanian. “They were all-cash deals with no contingencies, way over our budget.”

They decided to get aggressive.

“We realized that our budget of $600,000 would not cut the mustard,” he said. They found a three-bedroom Sunnyvale townhome listed at $649,000 and beat out 14 other buyers with a $725,000 bid.

Their experience is the story of the day in the Bay Area real estate market, especially in the tech-fueled swath from San Francisco to San Jose.

Buyers are battling over tight inventory, with for-sale homes in such short supply that they sell up to twice as fast as a year ago and draw multiple offers. In many areas, asking prices and sale prices are up significantly from this time last year.

The combination signals a shift to stability for the once-plummeting housing sector, experts say.

“The market has clearly turned,” said Christopher Thornberg, principal at Beacon Economics. “The question is: How high a bounce? Will it be a basketball or a bowling ball? The answer is more on the bowling ball end. While things have clearly (improved), it’s not like the problems are finished.”

Price per square foot

Asking price per square foot – a metric that captures the most current market snapshot while controlling for a change in the mix of properties being sold – rose in 105 out of 239 Bay Area ZIP codes analyzed in April compared with a year ago, with many of those areas in the South Bay and Peninsula, according to real estate information service Zillow. (Data were not available for some ZIPs.)

“There is more growth in listing prices in that area than elsewhere in the Bay Area,” said Stan Humphries, Zillow chief economist. “A desire to live close to the major technology companies is definitely helping those markets.”

Zillow shows that properties in towns such as Palo Alto, Los Altos, Mountain View, Cupertino, Sunnyvale, San Jose and Santa Clara are selling at above asking price.

Realtors specializing in Silicon Valley said the change is tangible.

“Over the past year, we have seen the market start to accelerate,” said Eric Boyenga of Intero Real Estate in Cupertino. “We could feel that job growth was happening when we started getting relocation calls almost every day.”

That revved up even more this year, said his wife, Janelle Boyenga, also with Intero.

“The light switch went on in mid-January, when (tech workers) realized, ‘Omigosh, Nasdaq stock prices are going up, the economy is doing well – we’d better jump into the housing market.’ We’re seeing hundreds of people going through open houses on the weekends; they’re like rock concerts.”

Asking prices are also up farther afield in suburbs both pricey (Corte Madera, San Anselmo, Moraga) and modest (Concord, Discovery Bay), according to Zillow.

“We’re seeing growth that’s organic, not stimulated” by government home-buyer tax credits, Humphries said. “We expect a lot more to spread throughout the San Francisco metro area, which will help stabilize prices.”

Inventory is the other “real-time” real estate metric – lower inventory signals a recovering market. It is down significantly in every Bay Area county this year as demand outpaces supply. Some have fewer than half as many houses for sale as a year ago, according to multiple listing service data provided by Realtor.com.

Besides a surge in demand, there are several factors on the sellers’ side. Many homeowners are staying put, waiting to put their houses on the market until they’re sure that prices are on an upswing. Many others are underwater, so they cannot sell without taking a loss. At the same time, the pace of foreclosures has slowed in response to government programs.

Quicker sales

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/02/MNJ11OMMVC.DTL

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