A shortage of Bay Area homes for sale sparked bidding wars last month but kept sales low in what was the second-slowest February in eight years, according to a report released Thursday.
Sales of single-family homes were flat from a year ago across the region, the real estate research firm CoreLogic said, but it was a mixed market.
First-time buyers were moving eastward, keeping sales robust there, said Andrew LePage, a research analyst with CoreLogic.
“There’s more activity in some of the inland markets because of affordability,” he said. But overall, sales “are off to only a slightly stronger start than in 2015,” LePage said.
Real estate agents in parts of the East Bay and South Bay said there was plenty of demand — just not enough homes on the market. But in some areas, buyers were giving up.
“A lot of people are dropping out of market,” said Lynne French of Windermere Real Estate in Clayton in Contra Costa County. “For first-time buyers, $739,000 for a house is tough.”
High prices pushed millennial first-time buyers to the edges of eastern Contra Costa County. Sales were up 7.6 percent from a year earlier in that county and the median price of $460,000 was up 2.2 percent.
“Affordability is the issue,” said Jennifer Branchini, a real estate agent in Pleasanton. “First-time buyers are being pushed really far out.”
For Lisa and Brian Johnson, it’s been a war on multiple fronts, competing with downsizing baby boomers and investor-flippers for what they hope will be their first home.
“It’s a difficult market,” Lisa Johnson said. “It’s just highly competitive. You’re fighting off 10 to 15 other people who want the exact same house. And then there are the people purchasing houses to flip them. It’s crazy.”
The Johnsons have been looking for five months and have an offer in on a $290,000 condo in Pacheco, a small town next to Pleasant Hill. “We’re hoping this is the one,” she said.
Low inventory and overbidding drove prices up 15.7 percent to $640,000 from a year ago in Alameda County, while the number of sales dropped 1.6 percent.
Inventory levels “dropped off a cliff in December” and are just now coming back, said Glenn Bell with Mason-McDuffie Real Esstate in Berkeley.
But at this point there’s still a shortage in Berkeley and Oakland, said Barbara Reynolds with McGuire Real Estate.
“Anything on the market is going for $200,000 to $300,000 over asking for houses priced at $900,000 to $1 million,” McGuire said. “There are plenty of buyers,” she said. “That’s the issue. There are 15 offers for every home.”
In San Mateo County, sales were up 3.9 percent over the year, but prices remained below $1 million for the second month in a row at $977,500. Median house prices also dipped below $1 million in San Francisco on a 25 percent drop in sales. It was the first year-over-year decline since February 2012, but LePage cautioned that it could be a one-time blip.
In Santa Clara County, sales dropped 11.3 percent from last February while prices rose 7.7 percent to a median of $862,000. Eight out of the past 12 months have seen double-digit price increases, but LePage said it’s too soon to declare a trend toward slowing prices.
Another factor depressing inventory is soaring rents, which make it tempting to rent out a home rather than sell it.
“The rental market is really good and a lot of people originally trying to sell have decided that rental income is so good, why shoot the golden goose,” said Mark Wong of Alain Pinel Realtors in Saratoga.
Buyers have to jump fast, Wong said. One of his clients snagged a Cupertino home for $1.3 million only by making an offer before the open house. “Buyers want to buy, so the timing is very critical,” Wong said.
Several real estate professionals said they’ve seen first time buyers competing against downsizing baby boomers.
“It’s a generational thing,” said Kevin Kieffer with Keller Williams in Danville. “The empty-nesters are coming in and taking all the properties. The baby boomers are the first-time buyers’ toughest competition, and nine times out of ten the baby boomer is winning.”
The CoreLogic report covers sales that closed in February. These are typically purchases that began late last year or early January.
Contact Pete Carey at 408-920-5419. Follow him at Twitter.com/petecarey.