Bay Area home market, getting looser, is still tight

Despite falling prices and sluggish sales, Bay Area homebuyers can’t expect to sniff out too many bargains.

Name almost any city in the nine-county region — say, San Jose, Oakland, San Francisco or Concord — and it’s where buyers are most likely in the country to pay over list price, waive contingencies, buy quickly and generate a windfall for long-time homeowners, according to a new study from Redfin.

The hottest spots for sellers include San Carlos, Mountain View, Daly City, Palo Alto and Belmont on the Peninsula, and Contra Costa Centre (a transit community near Walnut Creek), San Lorenzo, Alameda, San Leandro, Pleasant Hill and Albany in the East Bay, according to the national brokerage. The cities ranked at least 92 out of 100 in Redfin’s competition index. Nearly 70 Bay Area cities have markets rated at 90 or above, a mark the company ranks as most competitive in the country.

The national real estate firm ranked more than 1,000 cities across the U.S. The company considered information reported from Redfin agents and other listing and sales data to figure the amount of time a property spent on the market, how many offers were made, whether buyers waived contingencies to the sale and other factors.

The Bay Area housing market has downshifted from last year’s peak but is still making millionaires of long-time homeowners and frustrating buyers with near-record prices. Bidding wars have cooled in the region, but relative to the rest of the country, the Bay Area is still among the hardest places to buy into.

Redfin chief economist Daryl Fairweather compared the region’s market to a weather report: Bay Area real estate temperatures may have slipped from 100 to 90 degrees, while the rest of the country has inched up from 50 to 55 degrees.

A year ago, the Bay Area was also the most competitive real estate market in the country, along with Seattle, San Diego and Denver, said Redfin lead economist Taylor Marr. But higher interest rates last fall and a general slowdown have pushed other western cities toward a market with more choices and some lower prices for buyers.

The Bay Area, however, has remained resilient. The nine-county region added nearly 5,000 jobs in July, led by hiring in Santa Clara County, and also strong employment growth in San Francisco and the East Bay, according to state economists. The region was responsible for 4 in 10 of the state’s new jobs in the first half of 2019.

“The jobs are there,” Marr said. “It’s still a competitive market.”

He added that while the effect of tech IPOs on the market is hard to measure, the new wealth unleashed can stabilize and bring higher prices to the market in the long term.

Agents say the market has cooled — but not enough to slow down multiple offers in desirable cities. San Carlos, for example, had just 11 homes newly listed for sale in July, a roughly two weeks supply to satisfy buyers.

Redfin manager Julie Zubiate said San Carlos has a thriving downtown and good schools — two amenities popular with tech workers with young families.

The markets in San Mateo and Santa Clara counties popular with tech workers have shifted in the past 12 months. A property that once received nearly 20 offers might attract 5 to 10 today, Zubiate said. “It’s cooled a tiny bit.”

Sophia Niu, a Keller Williams agent specializing in Alameda, said competition in the island city has pushed inventory down to about 30 homes on the market — about 2 to 4 weeks worth of sales, she said. Well-priced, single-family homes offered at around $1 million typically draw between 5 to 7 bids, she said.

Although Alameda sales have slowed from last year’s peak, she said, “right now, the market is still strong.”

Alameda has become more attractive to San Francisco residents tired of paying high rents for small apartments. Niu even saw a bumper sticker around town recently: “Alameda: Where hipsters come to breed.”


Article source: https://www.mercurynews.com/2019/09/09/bay-area-home-market-getting-looser-is-still-tight/

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