More browsers, fewer home buyers in hot Bay Area real estate market

The New Year brought lots of home shoppers, but not so many home buyers.

Bay Area residents continued to show strong interest in home ownership in January, despite rising mortgage rates and home prices, according to a study by real estate brokerage Redfin. Demand hit record levels across the country for the typically slow winter month.

“This is the highest level we’ve seen to lead off the year,” said Nela Richardson, chief economist at Redfin. Even the surging home prices, she added, haven’t dampened demand.

But the strong interest may show more people browsing, not buying. Redfin saw home tour requests jump nearly 14 percent from the previous year, while actual offers on homes dropped about 10 percent.

Demand in the Oakland metropolitan area hit levels typically seen in the early summer, while San Francisco also hit a January high for the last three years, according to Redfin. The brokerage’s housing demand index, which has tracked demand for four years, factors in the number of buyers requesting home tours and making offers.

The study did not look specifically at San Jose, but Richardson said other indicators show demand in the city is among the nation’s highest. For example, homes for sale in Santa Clara now take about two weeks to sell, twice as fast as in the San Francisco market.

Redfin also saw strong winter levels of home-buying interest in Seattle, Phoenix and Washington, D.C., among other major metropolitan areas.

The desire for home ownership comes despite a rise in mortgage rates, the new federal tax law that diminishes some incentives for buying homes, and an up and down stock market, Richardson said.

Home shoppers are still looking despite a nationwide drop in housing inventory. Redfin has seen 32 straight months of declining home inventory. “We’re just not building enough new homes to meet the demand,” Richardson said. “That’s been a persistent problem.”

Local agents also report steady interest from clients through the winter months. They note that low inventory has driven prices to the highest in the country. The median sale price for the region climbed to a record $825,000 in November, according to real estate data firm CoreLogic.

Doug Goss, an agent with KW Bay Area Estates in San Jose, said less than 500 homes were listed for sale this month in Santa Clara, a low number for any season. For new buyers, he said, “you have to be patient, you have to be willing to step up.”

Neighborhoods in Willow Glen, Los Gatos, Sunnyvale, Cupertino, Palo Alto and Mountain View continue to draw strong interest, Goss said.

San Jose agent Gustavo Gonzalez of Valley View Properties sees demand coming from young professionals, existing homeowners looking for more space, and people looking to move out of family homes.

“Lots and lots of demand, little supply and lots of frustrated people,” Gonzalez said. “We have so much pent-up demand, I don’t see it going away.”

Article source: https://www.eastbaytimes.com/2018/02/28/more-browsers-fewer-home-buyers-in-hot-real-estate-market/

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