Near-record pace for Bay Area home sales

Oakland real estate agent Katy Polvorosa cautions her first-time homebuyers these days — be ready to bid quickly, and don’t be surprised to lose. A lot.

“I’ve lost out so many times,” said Polvorosa, who has also scored her share of victories this year. “It’s really not for the faint of heart right now.”

Demand for Bay Area houses has soared in recent months, and some home sellers barely need to plant a “For Sale” sign in the front yard before getting an offer.

Homes in San Jose and Oakland have been selling in less than two weeks, a near-record pace for the region, according to online broker Redfin. A limited inventory of homes for sale and eager buyers looking for more space during the COVID-19 pandemic are driving the frenzy, real estate experts say.

East Bay homes and condos in March sold in an average of 13 days, matching the fastest turn-around from listing to sale since the online broker started tracking the measure in 2012. Residential properties in the San Jose metro sold in just 11 days, two days short of a record set in the spring of 2018. Only San Francisco, where homes and condos have taken an average of 25 days to sell and prices have dropped, have buyers been more cautious.

Saratoga-based agent Mark Wong said he’s seeing more pre-emptive offers, with bids coming in days before all shoppers have had a chance to tour the house.  “People are really desperate,” he said. “They don’t want to wait.”

Work from home routines have upended the work-life balance, sending many families into the market looking for bigger backyards, Zoom-rooms and home office space that doesn’t double as a dining room. But the supply of homes has lagged far behind demand.

The California Association of Realtors estimates the Bay Area has about 1.5 months of inventory — an indication that at the current pace, all homes on the market would sell in just six weeks. It’s the lowest level since at least 2005, according to the association’s data. In March 2020, for example, the region had about three months of inventory.

Redfin economist Taylor Marr said the Bay Area housing market has split: slow-moving condos and townhomes, and fast-selling single-family homes. “This is true everywhere,” Marr said, “but it’s very pronounced in the Bay Area.” The fast-selling homes drive down the average days on market.

Professional couples, spending less during the pandemic on vacations, commuting and other discretionary purchases, have bigger budgets and bigger demands for space in single-family homes, he said. They jump into “the roulette-wheel of home buying” and make multiple offers before they get lucky, Marr said.

Marr thinks the relatively tight market will continue. “I’m less confident that more vaccinations will mean more inventory,” he said.

Agents say the frenzy has pushed buyers to bust budgets, add cash to offers, bid on multiple properties and be ready to move at a moment’s notice. Motivated buyers come with a clear idea of what they want — and maybe a few battle scars from losing previous bids.

Before the pandemic, most sellers wanted to hold two weekends of open houses, allowing four days of crowds to tour and consider their homes. Collecting offers and agreeing on a price would take a minimum of two weeks on a normal transaction.

But the pandemic has eliminated open houses, Wong said, so scheduling a tour as soon as possible has become a priority. Wong has seen offers come in on a property a day or two after a tour.

“It’s very stressful for the homebuyer in today’s market,” he said.

Fremont agent Sunil Sethi said he typically sees single-family homes moving in five days. Prices have risen so quickly, appraisers have had a hard time keeping up.

In north Fremont, Sethi listed a four-bedroom home with space for in-laws and a landscaped yard for $1.88 million. “The offers started coming in and I’m like, ‘Wow,’” he said.

The first offer came in quickly at $200,000 over asking. Other, higher offers followed. It went into contract for $2.35 million, but the bank appraiser valued the property at $350,000 less. The new buyers made up the difference in cash, he said.

Sethi said the lack of inventory is driving fast sales, adding “people clearly have money, too.”

Polvorosa, a Redfin agent, said sellers have been asking “for the world. And they’re never happy.”

Buyers, in turn, have become more aggressive to try to land a home. Waiving contingencies, offering more than 20% down on a property or buying with cash have made their bids more attractive to sellers.

Still, many are coming up empty. “I practically write an offer every other day,” Polvorosa said.

One client has lost out on seven recent offers. He tried for a four-bedroom home in Berkeley listed for $1.1 million. The bids came quickly, and Polvorosa’s client jumped in at $1.47 million — about $100,000 short of the eventual sale price.

They’ll keep looking, she said.

Article source:

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

Comments are closed.