Once red hot, Bay Area housing market still simmers

Bay Area home sales sagged in December from a year earlier, but — continuing a nearly five-year trend — the median price of a single-family house continued to climb.

For the nine-county region, the median price was $680,000 in December, up 3 percent from December 2015, according to CoreLogic, the real estate information service. Discounting a single month — March 2016, when the price remained flat — it was the 57th consecutive month of year-over-year gains.

4c1c4 sjm housing 0201 web Once red hot, Bay Area housing market still simmersFor 2016 as a whole, the median price paid for a single-family house rose 4.5 percent to $700,000 from $670,000 in 2015.

As Bay Area home prices increase — along, lately, with mortgage rates — families seeking to move up to larger homes can face steep financial challenges. But homeowners who move out of the region have the potential to pocket significant profits on their home sales, for now.

The upshot is that the Bay Area’s once red-hot market has settled into a simmer. With buyers competing for a notoriously tight supply of homes, prices keep rising, though not at the same clip as in previous years: “The overall trend this past year has been toward a moderation of price growth and at least a modest decline in sales,” said Andrew LePage, a research analyst with CoreLogic.

Despite national reports about a surge of buyers getting off the fence as mortgage rates began to rise after the presidential election in November, LePage wondered if the effect was less powerful here.

“It’s possible,” he said, “that in the Bay Area, where homebuyers face some of the highest prices and mortgage payments in the country, rising mortgage rates in November 2016 had a net negative impact on the number of home sales recorded in December 2016.”

December sales were down on a year-over-year basis through most of the region: by 5.4 percent in Contra Costa County, 7.7 percent in San Mateo County, 8.9 percent in Santa Clara County and 9.1 percent in Alameda County.

Home sales in the year-earlier period may have been artificially inflated, LePage said, as new federal mortgage rules had delayed some deals into December 2015 that otherwise would have closed sooner.

Looking at 2016 in its entirety, sales were down 2.6 percent in the nine counties from the year before.

“There’s nothing on the market,” said Kevin Swartz, a Saratoga-based agent with the Sereno Group. He cited just 594 active listings in December for all of Santa Clara County. “That is incredibly low,” he said.

The flip side of the situation is that most of what is available sells — and at a good price.

After eight years in Sunnyvale, Swartz’s clients Nancee Braddock, a retired registered nurse, and her husband Jim Gurney, a videographer, sold their 1,570-square-foot home for $1,725,000, about $25,000 over the asking price. There were four bids on the property, which was on the market for barely a week.

Why move?

“To get away from the traffic,” said Braddock, who previously lived with Gurney in Los Altos Hills. “The traffic is just unbelievable, especially in the last four years — bumper to bumper down El Camino. So we were looking for some place not so congested and not so rushed, where there’s not always somebody behind you who’s late for something.”

The couple, whose children are grown, moved to Port Townsend, Washington: “You just feel like you can breathe here,” Braddock said.

The cost of their 2,300-square-foot house in Washington: just under $500,000.

Compare that with the median prices for Bay Area homes in December: Contra Costa County was comparable at $498,500, up 8.4 percent from a year earlier. But the median price was $700,000 in Alameda County, up 3.2 percent; $865,000 in Santa Clara County, up 1.2 percent; and $1,155,000 in San Mateo County, up 5 percent.

Those home prices were down from November.

(CoreLogic’s aggregated December sales and price figures for the Bay Area as a whole were estimates because it said data for San Francisco County were not yet available).

Anecdotally, agents mentioned a softening of the high-end market: “Almost no transactions at all,” said Alain Pinel’s Mark Wong, who is based in Saratoga. “But at the entry level, it’s very active, often with multiple offers and well over asking.”

Wong mentioned a house in San Jose — about equidistant from the Municipal Rose Garden and Santa Clara University — that listed “at $499,000 and got 40 offers, and they ended up with $750,000. You’re talking about a quarter million over asking,” he said, sounding amazed, “and this is a total fixer-upper and tear-down. You cannot live there.”

In the East Bay, agent Kevin Kieffer, based in Walnut Creek with Keller Williams, noted too many buyers for too few properties: “Demand’s super-high, inventory is super-low, and buyers are being more prudent and not as willing to overbid,” he said. “We’re in a worse inventory situation than we were last January. Still, one listing comes up and we’re getting multiple offers — kind of unusual for the rainy season.”

His clients Simon Yee and Tamara Corduck recently sold their Dublin house — four bedrooms, two baths, about 1,350 square feet — for $722,000. The couple, who work in tech, bought it about eight years ago for $540,000, but were looking for something larger now that they have two children.

“Buying a home was pretty hard because the supply was so limited in the Tri-Valley area,” Yee said. “We looked for over a year, put it on hold for a bit and then started back up.”

Eventually, they bid on a house that listed for $1,095,000 in Danville’s Greenbrook neighborhood: four bedrooms, three baths and about 2,275 square feet. The schools are good. The yard is decent. The house needs some upgrading: “New colors, and the cabinets might need some change,” Yee said.

They bought the house at a slight reduction: $1,072,000.

“We bided our time,” he said. “You have to be patient. And we discovered it’s best not to sweat the little things; you have to see the big picture. You’re not going to get your perfect home, which is hard to accept when you’re spending over $1 million. Once we got past that — that it could be 80 percent perfect — it was a little bit easier to pull the trigger.”

Article source: http://www.mercurynews.com/2017/01/31/bay-area-real-estate-home-sales-dip-prices-rise/

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