Bay Area home buyers have begun to settle back into neighborhoods closer to their offices, driving up prices in Alameda and Santa Clara counties.
The median sale price for a single-family home in the Bay Area reached $1.13 million in September, a slight decline from this summer’s record highs. Homebuyers’ craving for suburban space continued, but cooled in the outer suburbs of Contra Costa and Marin counties, according to CoreLogic data.
Economists and agents expect a robust market heading into the holiday season, with low interest rates and millennial techies looking to buy.
The relatively short supply of homes for sale means buyers are acting fast. “What does come up, we bid on it,” said Fremont agent Sunil Sethi, “and we’re never alone.”
The median price for an existing single-family home in the Bay Area jumped 16% from last September, according to CoreLogic. The year-over-year gain reflects a pandemic-slowed market in 2020, which has rebounded to record levels since early this year.
Home prices rose in all nine Bay Area counties. But the biggest gains were in Alameda, where prices leaped 17.2% from the previous year to $1.13 million and Santa Clara, up 14% to $1.51 million.
Contra Costa County prices grew 9.3% to $820,000, San Mateo increased 8.3% to a region-high $1.79 million, and San Francisco rose 3.1% to $1.67 million.
Overall sales, including new units and condos, ticked up 6% from the previous September, suggesting buyers and sellers have eased their concerns about visiting and showing homes during the pandemic.
The Bay Area market has seen fewer highs and lows during the pandemic than other parts of the country, said CoreLogic economist Selma Hepp.
“We were really expecting, at this point, for sales to be lower,” Hepp said. “Demand is still there.” Sales did decline sharply in Marin and Napa counties, while closings grew by double-digit percentages in Santa Clara County and San Francisco — suggesting homebuyers are returning to urban and suburban homes near job centers.
In the East Bay, buyers saw more choices on the market in El Cerrito and Pinole. But agents planted fewer for sale signs in Clayton, Martinez and Walnut Creek. Home inventory also dropped in Fremont and Newark from the previous year, according to Bay East Association of Realtors. The median price in Berkeley in September reached $1.6 million, and nearly touched $1.5 million in Fremont, according to local data.
California Association of Realtors chief economist Jordan Levine told East Bay brokers that economic conditions are expected to improve with more people moving back to full-time work and continued low interest rates headed into 2022. After months of record lows, interest rates have climbed over 3% for a standard, fixed 30-year mortgage.
“For sellers, the market’s still pretty hot,” Levin said.
Santa Clara agent Alan Wang is seeing some buyer fatigue and a slight slowdown in the frenetic pace of spring and summer. But Wang still sees move-in-ready homes in Silicon Valley getting multiple offers and selling quickly.
After losing three or four bidding wars, some home shoppers have decided to wait until next year. “If you underestimate the market,” Wang said, “you’re going to get a reality check very quickly.”
Still, tech professionals continue to snap up homes in the Valley, he said. One of Wang’s clients fell hard for a fully renovated four-bedroom home in Belmont with stunning views of the hills. At least six buyers put in offers, driving the $3 million list price up to nearly $3.5 million. His clients won — but only after pushing to the edge of their budget.
“We knew the house was beautiful,” he said, “and we knew it was going to be a battle.”
East Bay homes have been selling more quickly, with buyers willing to take pre-emptive offers or simply accepting a smaller number of strong offers, Sethi said. East Bay data shows high-end homes priced in excess of $3 million are selling at seven times the volume they sold in 2020.
Lamorinda agent Paddy Kehoe said the market has begun to level off a little. But shoppers still are willing to pay a premium for good locations, he said.
“Buyers are not afraid to bid up 15, 20, 25%,” Kehoe said. “There’s almost a sense of desperation.”