Bay Area homebuyers beware. Among the nation’s 100 largest housing markets, San Francisco, San Jose and Oakland – in that order – are the least likely places to find a price cut on a home for sale.
That’s according to a new study by Trulia, which tried to figure out if a Black Friday phenomenon exists in the U.S. housing market. In the Bay Area, of course, the idea of a Black Friday sale on homes is a bit bogus.
Median prices here are high to begin with, topping $1 million for single-family homes in numerous counties. Beyond that, any seasonal price relief of the kind retailers offer post-Thanksgiving shoppers is hard to find if you’re looking to buy a house.
The San Francisco, San Jose and Oakland metropolitan areas “are very expensive markets, and they’re very tight markets,” said Felipe Chacon, the Trulia housing economist who authored the report. “There’s just not a lot of reasons for sellers to cut prices right now.”
Only 6.3 percent of homes listed in San Francisco in the year ending in October had seen at least one price cut, the report found. That was the lowest percentage in the country — less than half the national share of 13.4 percent. San Jose had the second lowest percentage, 7.2 percent, and Oakland had the third lowest, 8 percent. Compare that with Phoenix, where nearly one in five homes had at least one price reduction – and housing is much cheaper, anyway.
Looking at the national market over the last six years, the Trulia study shows that August is a sort of Black Friday for home buyers. As the peak season wanes and sellers get antsy, 13.9 percent of all homes listed in the largest 100 U.S. markets that month had their listing prices reduced at least once. But the bargains have never quite arrived in the Bay Area, at least not with the same frequency.
OK, a Black Friday sort of happens every August in Oakland and San Jose, but only 8.3 percent and 9.2 percent of homes, respectively, see price cuts. In San Francisco, Black Friday arrives in October, according to the Trulia analysis, but only 7.6 percent of homes there see price cuts.
Underlying all these numbers is the super-competitive nature of the Bay Area market, where the home supply is at historic low levels and often well-heeled buyers bid on the scant number of listings, driving prices up. Over-asking bidding has become normal. A modest house in Sunnyvale — a short drive from Apple’s new spaceship campus — sold for $782,000 more than its listing price in September.
The Trulia report illustrates the impact of this steady upward pressure on prices. The 7.2 percent share of San Jose listings that saw price cuts in the year ending in October was down from 9.9 percent in the previous year. That decrease – matched by Las Vegas — was the largest in the country. Oakland and San Francisco were close behind.
Across the region, prices continue to rise. Silicon Valley’s price gains are mythic. But the median price of a single-family house now also exceeds $1 million in a dozen East Bay cities, from Fremont to Alameda, Berkeley, Pleasanton and Walnut Creek.
Black Friday? Forget about it.
Article source: http://www.mercurynews.com/2017/11/14/is-there-a-black-friday-for-the-bay-area-housing-market-take-a-guess/
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