As if it wasn’t hard enough to buy a home in the Bay Area, right now it’s hard to even find a home to buy.
The number of houses for sale in December sank to historic lows, dropping 22% in San Francisco and the East Bay and 32% in the South Bay from the previous year, according to Zillow data.
In recent weeks, only about 700 single-family homes were up for sale in San Mateo and Santa Clara counties – less than half the number of a year ago for a population of nearly 2.7 million people. The East Bay is also pinched.
“It’s been a cold, dry winter,” said David Stark of Bay East Association of Realtors, “for Bay Area real estate.”
Bay Area home inventory has been tight for decades, with home construction lagging far behind the number of new residents migrating to the region for its booming economy and opportunities. The recent dearth of supply has helped to drive home prices to record highs, stoked hot bidding wars across the region, and forced buyers to cross out items on their “must-have” lists or simply give up.
Sellers have been reluctant to list properties for a number of reasons, agents say: pandemic cautions, a reluctance to move and become buyers in a fierce market, or a desire to wait for the value of their home to climb higher. The median price of a single-family home in the nine-county Bay Area hit $1.2 million in December, up 13 percent from the previous year.
By normal standards, a three-month inventory of homes for sale – roughly the measure of how long it would take for all the available homes to sell – is considered balanced, giving buyers sufficient choices and sellers enough opportunity to move. In the Bay Area, inventory in December slipped to less than a month, according to the California Association of Realtors.
The scarcity mirrors a national trend. Online broker Zillow estimates the U.S. supply of homes for sale has reached a record low, dropping 40% in the last two years. That’s driven home values up 20%, to a national median of $320,000.
“Home shoppers picked the shelves clean this December,” said Zillow economist Jeff Tucker, “leaving fewer active listings than ever before in the U.S. housing market.”
Sales and listings typically slow during the holiday season, but this year’s drop is more dramatic than comparable winter slowdowns. Home choices in certain cities are particularly bleak, according to data from Aculist.
The number of homes for sale in December in San Jose fell 60% from the previous year to just 106 properties, dropped 40% in Oakland to 103, and nearly 50% in Fremont where only 12 homes were for sale. Several other South Bay cities saw single-digit availability: 9 homes in Menlo Park, 6 in Cupertino, 5 in Burlingame, 4 in San Mateo and one in Campbell.
In the East Bay, the Lamorinda area had just 9 homes for sale, less than a quarter of last December’s total. Central Contra Costa County, including Concord, Pleasant Hill and Walnut Creek, had 35 listings, a little more than half of last year’s supply.
“It’s a different market because of the supply,” said Michelle Ronco of Aculist. “It’s the worst.”
Agents and buyers report fatigue, frustration and an alternating cycle of hope and abject despair. “What inventory?” asked Pleasanton agent Tina Hand. “It’s hit or miss.”
Sellers are still getting multiple offers, and buyers have had to adjust to fewer choices, Hand said. “Some are at the point where they’ll take what’s available.”
Menlo Park agent Brett Caviness, president of the Silicon Valley Association of Realtors, has seen deep frustration – especially in clients who have made multiple, aggressive offers and failed to land a home.
“Things are selling so fast,” Caviness said. “They’ve got to be prepared to jump on it.”
Matt Rubenstein, a Compass agent in Walnut Creek, has had several clients who have been looking for months. Buyers are typically raising their budgets and lowering their expectations.
Rubenstein has toured about 20 homes with one couple. They haven’t found anything. “It’s been tough,” he said. “It’s a ton of work.”
Samantha and Jason Youngblood began their search with Rubenstein in August. They had talked for five years about moving out of their rental home in Concord to get more space for their three, school-aged children.
“We knew we had to get moving,” said Jason Youngblood, a 41-year-old electrician and foreman. “We’ve been wanting a house for years and years and years.”
They wanted to find a four-bedroom home in Concord near their current rental so their children wouldn’t have to change schools. They started with a budget of around $750,000, hoping to find a move-in-ready home.
The couple toured open houses many weekends but discovered few homes that met their criteria for space or school district. They upped their budget to around $800,000 and started looking at three-bedroom homes they could eventually expand.
They got outbid on three houses. “It was really defeating at first,” said Samantha Youngblood, 39. “It hurt. It really did hurt.”
The Youngbloods finally closed on a three-bedroom in Concord a few days before Christmas. They’ve spent the last several weeks fixing it up, and expect to move in early February.
“We’re fighters,” she said. “We don’t take no for an answer.”