Bay Area home prices hit another record and sales surged in October, defying seasonal slowdown

Bay Area single-family home prices hit another record high in October and sales were up 19% over last year, defying the usual slowdown that hits the real estate market in fall, according to a California Association of Realtors report out Tuesday.

“Typically by September we should have the end of home-buying season,” said Oscar Wei, the association’s senior economist. The busy season was extended this year because mortgage rates hit another record low in October and the market is still playing catch-up from April and May, when sales fell off a cliff amid stringent shelter-in-place rules.

Also, “the home-buying season is typically shaped by kids going back to school,” Wei said. This year they’re going back to school, but remotely. “That gives parents a little more leverage in shopping for homes in the off-season.”

The median price paid for an existing, single-family home in the Bay Area hit $1.1 million in October, which was up 3.8% from September and 17% higher than last October. Sales were also robust, rising 1.5% from September and 18.9% year over year, the report showed.

 Bay Area home prices hit another record and sales surged in October, defying seasonal slowdown

The median paid for an existing Bay Area condo was $740,000, down 1.3% from September but up 3.5% year over year.

The median is the price at which half of homes sold for more and half for less, and can be influenced by changes in market mix. For example, if more entry-level homes and fewer luxury homes are sold in one month, the median price could be pulled down even though prices overall went up.

Looking at prices per square foot reduces this effect somewhat. In October, the median price per square foot paid for an existing single-family home in the Bay Area jumped to $613 from $584 in September and $541 last October. That is “an indication that there is price appreciation, not just people buying bigger houses,” Wei said.

Prices are also climbing because supply remains tight in many areas. Active listings, meaning the number of homes on the market, were down 23.8% year over year in the Bay Area, but dropped more than 40% in most other areas of the state. The only two counties statewide where active listings increased were San Francisco, up 34.3%, and San Mateo, up 0.7%, the report said.

“We are experiencing very active sales. It’s true that San Francisco is experiencing some tendency for both homeowners and renters to leave the urban environment for something with more size and open space,” Randall Kostick, Bay Area president of Corcoran Global Living, said in an email.

“The result is that the surrounding marketplaces of Marin, Napa, Sonoma and Contra Costa (counties) are seeing record activity in the form of both permanent residences and second homes. Sale prices have risen in the surrounding markets but San Francisco prices have remained very stable. The only exception to that is S.F. condos, especially smaller ones (studios and one-bedrooms), which in some neighborhoods have seen some softening in pricing,” Kostick said, citing South Beach, South of Market and the Marina as examples.

In San Francisco, the median price for a single-family home was $1.625 million in October, down 2.4% from February and down 1.5% from last October.

The median price for a San Francisco condo was about $1.22 million, down 1.8% from September and down 12.8% from last October. Condo sales in the city were down 5.5% from September but up 14.7% year over year.

San Francisco’s condo inventory “is huge, almost double the amount we had last year,” said Marc Dickow, an agent with Core7. “Some people just don’t want to live in high-rises. Some investors are deciding that the San Francisco rental market has been impacted (by the pandemic). I think some investors are saying it’s time to look to sell.”

San Mateo Realtor David Vigas said, “I have a condo listing in San Francisco that has had three or four showings and no offers in three months. It’s on Second Street by the ballpark. I can’t get anyone to see it.” He cut the price from $2.8 million to $2.2 million and “it’s probably not going to go for more than $1.8 million.”

The rental market “has completely slowed down. People are buying instead of renting,” Vigas added.

Single-family homes in the San Mateo, Burlingame and Hillsborough areas are selling “like crazy” but rentals are just sitting, he said.

Vigas owns several single-family rentals and manages some for clients. “I have three sitting on the market, beautiful homes, I can’t even get a bite,” Vigas said. He’s often approached by agents who want to buy the homes, but neither he nor his clients want to sell and incur capital gains tax. “I’d rather keep the homes for the long term,” he said.

Kathleen Pender is a San Francisco Chronicle columnist. Email: Twitter: @kathpender

Article source:

This entry was posted in SF Bay Area News and tagged . Bookmark the permalink.

Comments are closed.