No vacation discounts at Bay Area real estate
Bay Area homebuyers haven’t found any Black Friday promotions this holiday season, as prices soared 17% in November, marking another rapid increase in a record year.
The boom continued across the region, led by rising median single-family home prices in San Mateo County (up 23% from the previous year to $ 1.84 million), the Alameda County (up 23% to $ 1.2 million) and Santa Clara County (up 21% to $ 1.57 million), according to data from CoreLogic. Seven of the Bay Area’s nine counties posted double-digit gains, with only Marin and Napa lagging behind.
2020 has been a hot year for home sales, said East Bay Compass agent Paddy Kehoe, but 2021 has been “extremely crazy.”
High demand and a low inventory of homes for sale have driven the country’s most expensive real estate market. Rising prices frustrated many potential buyers, while sellers reaped even higher returns on their properties and were able to choose from several offers. Historically low interest rates, around 3%, also boosted the market.
The median price of an existing single-family home in the Bay Area hit $ 1.15 million in November, down slightly from a high of $ 1.2 million in early summer.
The Bay Area reflected the rapid national growth in residential real estate values ââin 2021. Home values ââin the United States increased 19% between October 2020 and October 2021, according to the S&P CoreLogic Case Home Value Index. Shiller.
âLow-cost homes are still in high demand as entry-level buyers and investors continue to compete for the very limited supply,â CoreLogic economist Selma Hepp said in a statement. She expects 2022 to bring another strong year of price growth – around 7%.
Online broker Zillow estimates that the median home price in the United States is now $ 316,000, less than a third of the Bay Area median.
Bay Area agents say buyers, who expect remote work to continue, are looking for additional rooms, yards and family spaces in the area. Single-family home prices in San Francisco jumped 14% to $ 1.8 million and 12% in Contra Costa County to $ 850,000.
Larger spaces and grounds in Contra Costa and Alameda counties are attracting Silicon Valley workers less concerned with their commutes. And the prices are right.
âSilicon Valley buyers feel like they left Nordstrom to join Macy’s,â said Kehoe, a veteran agent.
First-time buyers have been charged even in the most affordable communities of East Bay, but demand has slowed little. Owners have been hesitant to sell, he said, with only a dozen recent listings in the popular Lamorinda.
âThere is nothing to sell,â he said. “There is nothing.”
Burlingame agent Jeff LaMont said offers from professional couples in tech and biotech are among the factors fueling the price hike. LaMont recently sold two homes in Millbrae Meadows for over $ 500,000 above listing prices. Upgraded properties attract a premium, and multiple offers and quick as-is sales are standard.
He noted some interest in condos – Bay Area prices rose 14% from the previous year to $ 800,000 – as middle-class buyers lowered their expectations for obtaining a single family home.
Most of the clients entering San Mateo County are in tech, with income supplemented by capital grants, LaMont said. It’s fierce competition for families outside of the tech industry. âIf you’re the average Joe,â he said, âit won’t be easier.â
The suburbs near the tech headquarters and good schools remain a huge draw, agents said.
“No one has given up on buying a house,” Cupertino agent Ramesh Rao said of his clients, “and none of my sellers are keen on selling.”
Homeowners tell Rao that they’d rather hold their properties and watch prices rise, as consistent gains increase every month. Homes in sought-after communities of Silicon Valley including Saratoga, Los Altos and Cupertino continue to top the wishlists of many tech pros. âPeople always have a preference for South Bay,â he said.
Kehoe said he didn’t expect the market to stay as hot as it did. The buying and selling during the dot-com bubble and before the subprime mortgage crisis is nothing in comparison, he said, although buyers today are much better qualified.
He expects this to slow down in the coming months, but added, “I don’t know how the hell you can predict anything in California anymore.”