The hot Bay Area home market cooled slightly in late summer, but the median price still topped $1 million as the housing-starved region continued to show big, annual gains.
Low interest rates, few homes for sale and buyers with cash provided the usual tinder for the nation’s most expensive market.
The median price for an existing single-family home in the Bay Area rose 12.8% in August over last year, with prices rising by double-digits in Alameda, Santa Clara and Solano counties, according to CoreLogic data. But the $1.1 million median price in August was a 6% dip from the previous month. August sales can be fickle, agents say, with buyers and sellers focused on vacations or getting children back to school.
Price gains were led by Alameda County, up 24% to $1.2 million year over year, Santa Clara County, up almost 18% to $1.5 million, Contra Costa County, up 9% to $840,000, and Solano County, up 16% to $557,500, according to CoreLogic and DQNews. San Mateo County prices were flat but remain the highest in the region at $1.74 million.
CoreLogic economist Selma Hepp said the Bay Area market remained strong, with expected seasonal dips in activity. Detached single-family homes continue to be the driving force in sales.
The CoreLogic U.S. forecast calls for monthly, year-over-year home value gains greater than 10% through the end of 2021. Nationally, home prices are escalating at a faster rate than much of the Bay Area. But the typical U.S. homebuyer puts in only two bids, and just 1 in 10 waive inspections and buy “as is,” according to a Zillow survey. In parts of the Bay Area, agents say, that’s considered an easy search.
Overall Bay Area sales picked up 15% from the previous year, showing a steady return from pandemic restrictions that curbed activity in 2020. Even condo values have begun to rebound in some spots: Prices rose nearly 11% in Alameda County, and by more than 20% in the Wine Country.
But Bay Area prices suggest the continuing popularity of single-family homes in the suburbs, as buyers look for more space during the volatile and uncertain future of the pandemic. New waves of millennial buyers have also driven demand.
Agents say demand remains robust, but as prices rise, some shoppers are simply leaving the market.
Tina Hand, president of Bay East Association of Realtors, said the market has been particularly strong for single-family homes with big yards. After more than 18 months of remote work, most buyers are convinced work-from-home is going to stay in some fashion.
“People still want that bigger home with the large lot for kids to play in,” she said. “I see that continuing through next year.”
But rising prices and summer family gatherings have pushed some buyers to the sidelines. One family with a $900,000 budget working with Hand put their search for a San Jose house on hold after getting stymied by pricey listings and bidding wars in the early summer. “We’re seeing some buyers step away,” she said.
Established suburbs in the Lamorinda area of Contra Costa County have been attracting more young families from San Francisco, said veteran Orinda agent Clark Thompson. The pandemic has hastened moves from urban centers, he said.
Young, knowledgeable buyers are coming into the East Bay with more cash for down payments. “There is a different level of buyer,” Thompson said. Neighborhoods near downtown Lafayette have become more popular, with newcomers wanting restaurants and shops nearby like they had grown accustomed to in the city, he said.
San Mateo County became the most expensive Bay Area spot during the pandemic, as many city-dwellers bought into bedroom communities on the Peninsula. Burlingame agent Caroline Dinsmore said sales took off between May 2020 and July — then slowed dramatically as the pandemic seemed to ease and people ventured out on vacations.
Dinsmore took a couple of listings off the market to wait for a busier fall. “Buyers are definitely picky” when paying nearly $2 million for a typical San Mateo County home, she said. They want to be wowed and “expect that HGTV effect.”
Sellers have been getting strong returns from renovations, she said. Although several recent sales have gone significantly over list prices, she said, fewer offers have been coming in. “There might be a little bit of a shift in the air,” Dinsmore said. “I feel like we’re in that last, mad dash.”
Article source: https://www.mercurynews.com/2021/10/01/bay-area-home-sales-cool-slightly-but-prices-still-top-1-million
