The median price for single-family homes in the Bay Area jumped last month to a record $750,000, reflecting the region’s red-hot demand for housing — even as short supply drove down the number of homes sold.
The new Bay Area high was up 7.1 percent from the year before and surpassed the nine-county region’s previous record of $738,500, set in July 2007. In May 2015, the Bay Area median was $700,000.
“Job growth and low mortgage rates are continuing to fuel a healthy demand” for homes, said Andrew LePage, a research analyst for CoreLogic, the real estate information service that crunched the numbers. “But with the tight supply, you get this pressure cooker effect that drives up prices.”
The region’s largest percentage gains in prices were in the more affordable inland counties, including Contra Costa, where the median price in May jumped 11.3 percent year-over-year to $545,000 — though that figure was still considerably below the $654,000 peak reached in May 2007, before the recession.
In Alameda County, the May median price rose to a record $778,750, up 7.6 percent from a year earlier. The median price in Santa Clara County matched April’s peak: $1 million on the nose. And in San Mateo County, the median was $1.2 million, a slight drop from April’s record high of $1,211,500.
Those sky-high numbers tell the same old story: Supply isn’t meeting demand.
Throughout the region, there was a year-over-year decline in sales. Of the nine Bay Area counties, only Napa showed an increase in sales volume, up a modest 2.6 percent. In Contra Costa County, 1,297 homes sold in May — the most of any county in the region — but that was down 2.3 percent from the year before.
Still, Redfin agent Martin Hendren, based in the East Bay, said he continues to see “a real trend. At least 30 to 40 percent of my clients are people who’ve gotten frustrated in San Francisco or the Peninsula and gotten into a house over here, and it’s been a little bit of an easier process for them. They’re going, ‘Wow, I can almost double the house if I move to Contra Costa.’ “
Assisted by Hendren, Adam and Megan Carmin more than doubled their space.
With their two young children, they moved from a 1,200-square-foot condo near San Francisco’s Nob Hill to a 3,000-square-foot house in Lafayette. They sold the condo for $1.26 million — close to twice what they paid for it in 2011 — and bought a contemporary Craftsman-style house for $1.65 million.
“We were ready for a change of pace: more space, a backyard,” said Adam, who works for an advertising technology company and now takes BART to work.
Noting the so-called spillover effect from high-priced Silicon Valley, CoreLogic’s LePage said, “It’s no surprise that we’re seeing gains in the inland areas, where a lot of buyers who were priced out of the more expensive coastal markets are finding themselves these days.”
Some people are finding themselves a lot farther away than that.
After 12 years in Sunnyvale, Jason and Freda Collier and their two children are moving to Austin, Texas.
“The increases in prices we’ve seen over the last 12 years have been insane, and I don’t know how sustainable it is,” said Jason, a tech executive who sensed that “the market had reached its peak point” and decided it was prudent to “make a move” before prices fall.
The Colliers sold their 1,600-square-foot Eichler home in Sunnyvale — which they purchased 12 years ago for $750,000 — for $1.7 million. In Austin, where Jason often travels on business, their new 5,000-square-foot home on half an acre with a swimming pool cost $740,000.
Real estate agent Kevin Swartz of the Sereno Group, who represented the Colliers, said their deal is a window on the current market, which he said has softened. Yes, the Colliers made a bundle. But the house attracted just one offer — and sold for $17,000 over its listing price, not much by recent standards.
“A lot of buyers are really becoming very picky,” Swartz said. “The market has changed. … It used to be, ‘How much do I have to pay to make sure I get this house?’ Now it’s, ‘Well, what do I really have to offer? Because I don’t want to overpay.’ “
Other agents agreed that the market has shifted in recent weeks — a change that might not be reflected in CoreLogic’s numbers, which are based on deals that have passed escrow and have been officially recorded.
“It’s an interesting market right now,” said Alain Pinel agent Mark Wong, who is based in Saratoga. “It’s transitioning. Before, the seller took all the control; they could ask anything they wanted. Now, the buyer can take a little bit more control.”
The pause might just be a summer lull, with many potential buyers on vacation. Or it could be something more than that, because rising prices “have to stop somewhere.”
Whatever it is, sellers “must set reasonable expectations,” Wong said, which is what he advised clients David and Valerie Fermor.
After 16 years in their Sunnyvale house, they sold it this month for $2.25 million. That was slightly less than the $2,288,800 listing price, and that was less than the $2.4 million or even $2.5 million that David Fermor had originally counted on.
“But this is where the market is now,” David said, “so we had to sort of lower our expectations. “
A tech consultant, David was looking for more job flexibility, while he and Valerie wanted “a more relaxing” place to live than the Bay Area. They settled on Carmel Valley — specifically on a much larger house, one that’s set on 2.5 acres with a swimming pool and panoramic views.
The cost: $1.34 million.
“Basically, we were able to buy it with the cash proceeds from the house in Sunnyvale,” David said, “with money left over to help with renovations in our new house.”
The moving trucks arrive next week.