Despite out-migration, Bay Area home prices still on a tear
March 23, 2017
Updated: March 23, 2017 4:49pm
Some Bay Area counties have more people moving out than in, according to new U.S. Census Bureau data, but this out-migration doesn’t seem to be hurting demand for homes.
The median price paid for all new and existing homes and condos in the Bay Area rose to $662,000 in February, up 5.4 percent from January and 7.6 percent higher than February 2016, according to a CoreLogic report released Thursday. The year-over-year jump is the highest for any month since October 2016, when it rose 8.5 percent.
The Bay Area real estate market took a breather in November and December, but in late January the market roared back to life.
A two-bedroom, one-bathroom, 908-square-foot home on Stanford Avenue in Palo Alto — advertised as a teardown — was listed in mid-February at $1,927,000. It got 17 offers and sold for $2,550,000 cash on March 1, said listing agent Dawn Thomas of Dreyfus Sotheby’s International Realty in Palo Alto.
She thought it might fetch $2.1 million, and one agent in her office said it could go for $2.2 million “on the very outside,” Thomas said. It does have a 7,500-square-foot lot, which is large for Palo Alto.
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The market typically picks up in the spring, but “the bump up this year is somewhat of a surprise to us. Sunnyvale is another off-the-charts market, as well as Mountain View,” Thomas said.
After years of job-fueled net migration to the Bay Area, Santa Clara, San Mateo and Marin counties had more people leaving than coming over the 12 months ending June 30, according to Census data released Thursday.
Last year, Thomas said she started to see some of her “three-time, four-time, five-time clients leave the Bay Area” for places like Seattle and Colorado Springs. Some are still climbing the corporate tech ladder, but couldn’t stand the traffic or high cost of housing here.
Even so, the median home price in San Mateo and Santa Clara counties increased 14.3 and 9 percent, respectively, in February year over year. Month over month, it rose 11 and 7.6 percent, respectively, CoreLogic reported.
While more people may be packing their U-Hauls, there is so little for sale that bidding wars are ruthless. “It seems like every year we have less inventory than the year before,” said Beverly Schwert, a Zephyr agent in Marin. “Now with interest rates going up, it’s a frenzy,” as buyers rush in before they go higher.
Sean Maley, a loan broker with Guarantee Mortgage in Corte Madera, said he has “53 preapproved buyers ready to go.” Normally he has 20 to 25. “The demand is still so high, there’s just no inventory,” he said. “I have buyers making three or four offers and getting outbid left and right.”
Judy Smith, an agent with Decker Bullock Sotheby’s in Greenbrae, listed a home on Altamira in Kentfield at $1,599,000. It sold seven days later with no contingencies for $1.8 million in cash.
The dearth of inventory has contributed to a continuing sales slowdown in the Bay Area. Last month, only 4,767 homes changed hands, down 1.7 percent from January and down 3.3 percent from February of last year. Last month’s sale number was 21.2 percent below the long-run average for February, according to CoreLogic.
In San Francisco, sales plunged 27.2 percent over the previous year, but that was mainly because there was a 60 percent drop in the number of new-home sales recorded in February, CoreLogic analyst Andrew LePage said.
This number has been volatile in San Francisco because of a binge in new condo construction. Developers begin selling units long before they are completed, but sales are not recorded until the building is ready for occupancy and buyers close escrow. That tends to happen in clumps. Despite the sale plunge, the median price in San Francisco was $1.12 million in February, down 2 percent year over year but up 12.2 percent from January.
Kathleen Pender is a San Francisco Chronicle columnist. Email: email@example.com Twitter: @kathpender