Home sales overall may be leveling off due to low inventory, but the luxury segment of the housing market is showing no signs of slowing down.
Our latest Coldwell Banker Previews luxury market report found that sales over $1.5 million in Silicon Valley soared 33 percent in April (the most recent data available) from a year ago and a whopping 48 percent from March.
The upper end of the luxury market was particularly strong with 124 sales over $2 million, up from 91 the previous year, and 29 sales over $3 million, up from 21 in April 2013.
The South Bay wasn’t alone. Marin County saw a 22 percent jump in sales over $1.5 million compared to the previous year. And there were 37 homes selling for more than $2 million, up from 27 during the same time last year.
One of the hottest luxury markets is in the East Bay, where million-dollar home sales surged 38 percent in April compared to a year ago with 313 luxury homes changing hands in Contra Costa and Alameda counties.
Key market indicators were strong in all three regions with homes selling faster on average than the year before and sellers getting a higher percentage of their asking price on average. In fact in Silicon Valley, the average luxury sale was 10% over asking price with homes selling in just 19 days on average.
One of the main reasons for the strong sales figures is that inventory has gradually started to increase again, giving pent-up buyers some relief at last. The demand from well-qualified buyers has always been there, and now they’re finally having a little more to choose from.
Reports from our offices around the Bay show that listings are gradually increasing for the rest of the market as well. It’s still a seller’s market, but at least the pendulum is starting to swing back a little closer to a balanced market.
Here’s hoping that this trend continues as we begin the summer home buying season.
Below is a market-by-market report from our local offices:
North Bay – It’s still a strong seller’s market although there seems to be more listing activity, which our San Rafael manager thinks will level the market as far as the number of multiple offers. If it does, that could create an increase in sales activity. Our Sebastopol manager says there was a little lull over the holiday weekend, which has extended itself through the graduation period. He expects the market is going to see increased activity over the next few weeks. Our Southern Marin manager reports that the Previews luxury market has remained steady and well ahead of last year’s pace. The $2 million to $5 million market is selling at twice the pace of 2013. The $5 million plus market is selling at more than twice the pace of 2013. CB Southern Marin had two Previews listings close in excess of 20% over list price in the last two weeks. Overall, the market in Southern Marin peaked in April and appears to have leveled off throughout May. However, the leveling off is at a peak level. There is slightly more inventory and consequently fewer multiple offers and the number offers in multiple-offer situations is lower.
San Francisco – Perhaps because of the Memorial Day weekend, sales slowed down just a little and there was a reduced inventory (reduced from an already paltry few properties to sell), our Lakeside office manager reports. However, the properties that are available are selling quickly. Similarly, our Lombard office manager says there has been a little less frenzy this week with no tales of 30 offers or a million over. Listings are perhaps averaging 4-6 offers, selling within 10 days at about 107 – 115% over. There have been some emails of price reductions, “back on the market,” and “still available,” but no other tangible indications of a cooling. City inventory is staying within 10-15 homes or condos each week. Our Market Street manager says it’s not clear if it was because of Memorial Day, but there’s a general feeling that the market is slowing a bit. Maybe it’s the usual slowdown we see every summer in SF as agents and clients decide to take some well-deserved R&R time. In any case, the majority of listings continue to receive multiple offers. However, the number this period dropped to only 2-3 offers per property. The only property that didn’t receive multiple offers chose to accept a pre-emptive offer instead. Open houses are still very busy with 40-50 groups within a two-hour period, according to our Sunset office manager. In the several weeks, agents have seen a slight increase in listing inventory, which translates into more open transactions. More inventory is still needed. Multiple and non-contingent offers are still the norm as buyers are still fighting over the few available listings.
SF Peninsula – Our Burlingame manager reports that sales activity is brisk as ever-resourceful agents are winning the day for their clients in multiple offers and in discovering off market opportunities. Some properties are spending a little more time on the market than a few months ago and the number of offers may be fewer as well. This is typical of end of May/early June as schools end their year, graduations and start of vacations. Our Menlo Park manager says the high-end market is strong with some big numbers. However, there still is a dearth of properties in the average ranges that people are seeking out. As crazy as this market is, with lots of buzz and lots of stories about multiple offers, agents are really working hard and she’s seeing some burnout and very frustrated buyer’s agents. In Palo Alto, agents are seeing a summer time ebb and flow with inventory. Multiple offers keep marching along. There’s been a slight change in the Redwood City-San Carlos market. Our manager says there seems to be more inventory coming on. Even though agents are still getting multiple offers, the number is less – 3 to 4 instead of 8 to 10. San Carlos remains a very desirable location and still commands over list prices. Even if there is only one offer it is still well over list price, she notes. Our San Mateo manager says there’s been no increase in activity coming off memorial week. Listings are moving slightly and the number of multiple offers is down to 2-4 on average. There have been some big-ticket sales and the rest of the Woodside-Portola Valley office is busy, too, despite the usual extended Memorial Day Weekend.
East Bay – The Berkeley area market is still a seller’s market but agents saw a number of deals get cancelled this week and a few homes did not receive offers on the offer date. The high-end Previews market has seen a slight decrease in multiple offers – 3-5 instead of 5-7. Some homes are still selling for 20% over asking price. A house in Piedmont on a busier street on the market for $1.95m sold for $2.395m with “only” 5 offers – a low number of offers for this area. Our Castro Valley manager says Inventory is picking up. The Danville area market seems to be spiking again after a little fade in the past few weeks. It seems to fluctuate weekly. Sales are strong in the mid-$1 million range but slower over $3 million. In the Fremont area, agents are seeing steady inventory with prices rising. There’s been an 8% increase in sales activity with 8 multiple offer situations. At our Oakland-Piedmont office meeting agents were speaking about the softening of the market, meaning that the number of multiple offers has gone down a bit and the large amount of $$ over list price is not quite as much. But then that afternoon one of our listings received 17 offers and went well over. “Guess we spoke too soon,” our manager says. Eight new office listings hit the market this week, which is the most in one time in a while. Open house activity is still brisk with some of our open homes garnering 100+ visitors per day. The Lamorinda market continues to be very robust, our Orinda manager reports. Inventory has increased at a steady rate over the last few weeks. Homes that are appropriately priced move very quickly. Buyers seem to be a bit more selective before making an offer. Open homes continue to be heavily attended.
Silicon Valley – Buyers continue to be desperate to buy and are often paying 20% over asking, according to our Cupertino manager. Open houses are packed. In the San Jose-Almaden area, agents are still seeing multiple offers on almost all properties up to $1,750,000. Our San Jose-Main office manager reports that the markets in San Jose, depending upon area, seem to be slowing down a bit. It is really dependent upon the neighborhood, as Santa Clara is not seeing a slowdown at all, while Blossom Valley is starting to see a leveling off and some price reductions. Overall it seems that the June summer slowdown may be in effect and the aggressive pace of the start of the year and spring is losing its steam. Open houses have been very well attended. And our Willow Glen manager says the local market has experienced a bit of a slowdown to new listings coming to the market. This may be attributed to the end of school year / graduations. However, open house traffic is still brisk. Agents are feeling a little bit of buyer hesitation as any new listing comes to market. The number of offers per property has subsided considerably. The Willow Glen office had a record month for new sales for the month of May and the number of buyer side transactions was up considerably.
South County – The word seems to be out to all “South Valley” sellers—inventory is low, and your home is probably at the peak of its value. We are seeing more and more homes coming on the market. Both the Morgan Hill and Gilroy offices are listing homes at a very fast pace. Each week’s broker tour reflects the increased inventory. This week there were 24 homes available to preview on the South County brokers’ tour. As the inventory increases dramatically, the once strong “sellers’ market” is morphing into a more balanced one—giving buyers more choices.
Santa Cruz County – The number of luxury homes active on the market has increased in the past month, our Santa Cruz area manager reports. Sales in the over $1 million range have been slow but steady. Inventory is coming on faster than it is selling for the first time this year, and interest rates are very attractive, which means that the market is shifting slightly to favor buyers, he says.
That’s it for now. Have a great weekend!