Bay Area home sales plummeted in May, falling by more than one-third in most counties and by nearly half in San Francisco as COVID-19 fears chilled buyers and sellers.
But the slowdown in transactions did little to slow prices — median sale prices rose noticeably in Santa Clara, Alameda and Contra Costa counties, according to Zillow data. The median home sale price for seven counties came in at $866,900.
Bay Area demand for scarce homes remained strong despite the shutdowns and constraints caused by the pandemic. “These numbers are pretty impressive. Pretty striking,” said Zillow economist Jeff Tucker.
The smaller pool of Bay Area house hunters shrugged off historic job losses, an ever-lengthening health crisis and economic uncertainty to snap up the few homes for sale at rates not seen since the peak of the market in 2017. Even limited in-person home tours and less personal meetings with brokers did not discourage these buyers.
The lure of record-low interest rates — hovering around 3.1 percent — has also encouraged many to start shopping.
Median prices for single family homes rose, year-over-year, in five of seven counties in May, according to Zillow. The median price for a home in Santa Clara County rose 4.6 percent to $1.25 million, grew 2.4 percent to $660,900 in Contra Costa County, increased 2.1 percent to $889,700 in Alameda County, jumped 5.9 percent to $462,100 in Solano County, and climbed 2.9 percent to $646,300 in Sonoma County.
Prices fell in the region’s two most expensive spots, but provided no bargains. The median sale price in San Francisco fell about one percent to $1.53 million and dropped 1.6 percent to $1.45 million in San Mateo County, according to Zillow.
Data for Marin and Napa counties was not available.
The market for condominiums in core Bay Area counties continued to crumble, with price drops nearing 15 percent in Santa Clara County, and smaller declines in San Francisco, San Mateo, Alameda and Contra Costa counties.
Tucker said the appeal of single-family homes — with yards and private space — has grown during the pandemic. Many condo units now have limited access to common areas, community gyms and outdoor spaces, and tighter living conditions could be a turn-off for some buyers.
Agents say buyers remaining in the market are serious and prepared to move. Some are reporting bidding wars for Silicon Valley properties, with low inventory fueling the market. And despite the growing reliance on remote work, few have noticed a run for distant suburbs with lower prices and bigger spaces.
Core Silicon Valley communities, including Palo Alto, Mountain View, Cupertino, Sunnyvale and Saratoga, have seen growing interest and sales over listing prices.
Compass agent Mark Wong of Saratoga said business remained brisk with motivated buyers. During the pandemic, he’s seen several clients looking to move from San Francisco high rises to single-family homes in the South Bay.
The tech economy has also remained solid, he added. “People are still buying and selling every single day, ” Wong said. “They seem to be bullet-proof on their income.”
Buyers are shopping online and making quick decisions, he said, with offers being accepted as quickly as a day after a property has been listed. “Buyers just can’t wait,” he said.
Agent Tina Hand, president of the Bay East Association of Realtors, said demand remains strong along the I-880 corridor. Low mortgage rates have boosted buying power. “It’s free money,” she said.
Realtors have adapted to new rules, staggering home showings in one-hour intervals because open houses have been banned. The inventory of homes for sale in the East Bay has fallen, like the greater Bay Area.
The pandemic has changed some buyers’ habits. “People are now seriously looking at traditional single-family homes,” she said. “They’re looking for yards again.”