Bay Area home sales continued their divergent trajectories in November, with median prices rising while sales volume dipped, according to a real estate report released on Tuesday.
Buyers in the nine-county region paid a median of $550,000 in November, up 25.6 percent from a year earlier, said San Diego’s DataQuick, a real estate information service. The rise was driven by several factors: more high-end homes changing hands, bargain-priced distress sales continuing to dwindle and tight supplies encouraging competitive bids.
However, the total of 6,659 new and resale homes and condos that sold in the month was down 10.9 percent from a year earlier, as uncertainty kept more buyers on the sidelines.
“A lot of people are waiting to see where this market will head,” said Ron Abta of Paragon Real Estate Group. “It’s been so hot this year that there’s a feeling among buyers that there might be some softness coming. That unknown, coupled with seasonality and colder weather, means you’re getting more of a wait-and-see attitude from some buyers. They’re also waiting to see what the Fed will do with holding interest rates steady or pumping them up.”
Overall, the market appears to be rebalancing, DataQuick said.
‘Back toward normal’
“In a number of key statistics, we’re gradually swinging back toward normal,” said Andrew LePage, a DataQuick analyst. Such factors as jumbo loans and adjustable-rate mortgages, which were in scarce supply during the downturn, are increasing, while foreclosures and short sales, which once were a torrent, are now a trickle. Sales to absentee buyers and cash buyers also are tapering off.
The main factor that remains far from normal is tight inventory. Statewide, there is a 3.6-month supply of homes for sale (assuming that the current sales rate is maintained), according to the California Association of Realtors. A normal market would have a six- to seven-month supply.
“The big question is how many more homes are we going to get on the market?” LePage said. “This spring there will be a lot more people who can afford to sell because now they have equity after having been underwater or because they have more equity than before and are more content with what their homes will fetch.”
Bidding wars fade
A better balance between supply and demand would put the brakes on runaway price increases and bidding wars. Realtors continue to say that bidding wars now are milder than earlier in the year, but another complication is that some sellers have unrealistic expectations.
“Some sellers are overreaching” with their pricing, Abta said. “I represented a buyer recently who offered an insane amount of money – $2.3 million – for an upscale South Beach condo that was listed for $2.5 million. Even though we were the only offer, the sellers wouldn’t take it, and said they would wait to see if they could do better.” Four weeks later, those sellers are still waiting, he said.
One truism in real estate is that people don’t buy homes over the holidays. For instance, Abta is representing an upscale remodeled Edwardian two-bedroom condo in desirable Russian Hill, but won’t list it for sale until early January, probably in the low $1 million range. “It’s staged and ready to sell, but it makes no sense to put something on the market right before Christmas,” he said.
Decorators from home-staging company Design Milagros visit the property weekly to “refresh and fluff” the decor to stay ready for private, off-market showings, said decorator Tory Peterson.
Their firm provides a snapshot of the economic boost provided by the overheated real estate market. Started two years ago with three employees, it now has 15, Peterson said.
“Every quarter we grow and get more employees,” she said. “At any given time, we have 30-plus homes staged in San Francisco. Our inventory (of furnishings) is growing; we just had to rent additional warehouse space to accommodate it.”
Carolyn Said is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org Twitter: @csaid