Declining Bay Area home sales last month made it the most sluggish February in nine years, but prices jumped sharply as buyers bid on a shrinking supply of single-family homes.
Prices soared 11.4 percent higher across the nine-county region compared with the same month of the prior year, reaching a median price of $675,000 — the largest such increase in more than a year.
“It’s the first double-digit price gain since January 2016, when the median went up 14 percent,” said Andrew LePage, a research analyst with the CoreLogic real estate information service, which published the figures Thursday in its monthly report.
Only 3,272 home sales closed across the region, 21 percent below the February average going back nearly three decades. But short supply and high demand turned the February market into a pressure cooker as prices moved back toward peak levels in some areas.
“It’s pretty much a seller’s market right now,” said William Doerlich, president of the Bay East Association of Realtors.
In Santa Clara County, the median price of a single-family home rose 11.4 percent from a year earlier to $960,000 — 4 percent under last spring’s $1 million peak. Bucking the region’s sluggish sales trend, transactions in Santa Clara County actually rose 11.2 percent over the same period. The market is “frothy,” especially for entry-level homes, said Pacific Union agent Adam Touni, who is based in Palo Alto, where a so-called starter home can cost $2.5 million. “I haven’t seen this kind of activity in two years.”
In Alameda County, the median home price climbed 12.3 percent from a year earlier to $730,000 — 4.9 percent under the May 2016 peak of $767,500.
In San Mateo County, the median price rose 16.2 percent to $1,162,000 — a mile-high price, though still 8.1 percent below last October’s peak of $1,265,000.
In Contra Costa County, the median rose 9 percent to $501,250, but remained well below its pre-recession record of $654,000.
Earlier this week, Trulia, the real estate website, issued a report stating that the Bay Area housing supply has dramatically contracted. Over the past five years, Trulia said, total inventory — including starter homes, mid-tier trade-up homes and luxury homes — has declined 59.6 percent in Alameda and Contra Costa counties; 63.5 percent in Santa Clara and San Benito counties; and 62 percent in San Francisco and San Mateo counties.
Yet job growth continues in the region and competition for homes is a natural outcome. In tech-centric hot spots like Sunnyvale, bidding can get out of hand. Alain Pinel agent Mark Wong noted a dozen Sunnyvale homes that sold last month for between $202,000 and $401,000 over the asking price.
“It’s scary, right?” he asked. “The listing price doesn’t mean anything.”
Tell that to his clients Shue Pun, a marriage and family therapist, and her husband Heman Pun, a graphic artist. Last fall, they sold their townhouse in Cupertino for $1.05 million and rented a one-bedroom apartment in San Jose, biding their time before commencing the hunt for a single-family house.
“When we sold, the market was going down, and we thought, `Oh, it’s good that we’re waiting,’” Shue said. “But after Jan. 1, when we started looking – it was really a shocker. Things were pricey, and we felt almost hopeless.”
They bid on one home in San Jose — a fixer-upper that listed for $499,000. It attracted 40 bidders and sold for about $750,000. Other frustrations followed. But finally, the Puns discovered a modest house in the city’s Burbank neighborhood that listed for $720,000: three bedrooms, 1,100 square feet, with avocado, peach and lemon trees in the yard. It felt like home and they pulled the plug, making a cash offer for $735,000 that beat out four or five other bidders.
The deal closed last month.
“Our prayers were answered,” Shue said.
Ameen Paul, Doerlich’s client, is still praying. Retired from a career in corporate sales, he and his wife Lorna are looking to move from the far-flung suburbs to the heart of the East Bay.
Nearly a decade ago, they bought their three-bedroom, 1,800-square-foot house in Mountain House for $225,000. But Lorna, who works as a lab technician in Pleasanton, is fed up with the commute: “It just grinds to a halt and she has nothing to do but just sit in traffic until it moves,” Ameen explained.
Last weekend, they listed their house for $475,000 and had “good traffic” through an open house. They figure it will sell. But moving to Pleasanton, Dublin or Livermore — close to Lorna’s job — presents a challenge. Modest homes of just 900 or 1,000 square feet cost “over $500,000,” Ameen said, sounding somewhat forlorn. “The place is so small, my wife and I will be bumping into each other. But that’s life. We’re looking to downsize, and whatever we get is not going to be as good as what we have.”
Article source: http://www.mercurynews.com/2017/03/23/sjm-housing-0324/