Agents in the trenches know all too well that if you don’t make an offer quickly when the right home comes along in the hot Bay Area housing market you’ll be left in the dust. But what they may not realize is just how quickly homes are selling here compared to the other hot spots around the country, such as Austin, Texas, Seattle, and Los Angeles.
An interesting new report by Realtor.com shows that the San Jose and San Francisco metro areas are tied for second place in the U.S. for fastest sales. Homes in those two cities were only on the market for a median of 36 days in September vs. three months for the national average.
To find the number one market for fastest sales in the entire country you don’t have to travel far – just across the Bay Bridge. The Oakland metro area tops the national ranking with a median of 35 days on the market!
As the Silicon Valley Business Journal noted in a story this week, Oakland’s rise to the top of hot housing markets may be the result of “skyrocketing prices in San Francisco and Silicon Valley sending prospective buyers fleeing to farther-flung Bay Area housing markets…”
According to the report, Oakland had the most inventory of the three local markets, with 4,175 homes on the market as of September, compared to 2,050 in the San Jose area and 2,397 in San Francisco. Median home prices were $500,000 in Oakland, $718,000 in San Jose and $949,000 in San Francisco.
Other strong housing markets on the list were Denver with a median of 37 days on market, Washington D.C. with 40 days, Seattle with 51 days, and Los Angeles and Austin tied with 56 days on market.
Below is a market-by-market report from our local offices:
North Bay – While the deals keep coming in, our Greenbrae manager is also seeing an all time high for the year of escrows falling out. Our office just closed a $3.2 million listing that was in escrow three times (third time’s a charm, right?) Another $1.5 million property just fell out of escrow. She’s not seeing as many multiple offers, and when they happen the number of offers are less than earlier in the year – maybe 2 to 4, versus 8 to 10. The Novato market has cooled off. Agents are still seeing new listings coming on market but sales activity has decreased. Open houses are much slower and the market is experiencing fewer multiple offers. In San Rafael, our manager says the attendance to the open houses for the past two weeks has fallen off – a bit early for this time of the year. However, the sales activity for the past two weeks has maintained. Santa Rosa area market activity has picked up from a 1-2 month lull as we see the build-up in buyer motivation to get into homes before the holidays. The luxury market is strong. Multiple inquiries from out of country buyers on wine country high-end properties as either second homes or corporate housing for incoming executives. There are some multiple offers on the best properties in high demand neighborhoods and on well-priced inventory, or first time buyer (entry level). There’s been an uptick in activity since the last report. Otherwise the market is normalizing, reaching balance between buyers and sellers with fewer multiple offers overall. In the Sebastopol area, the move up market is back. Most of our local sales are above $600k. Agents are seeing many contingent offers being made and less seller reluctance to accepting a buyer home sale contingency. We continue to see lots of cash offers as well as more sales with 20% or more down. The Previews luxury market is off the charts. We listed three new Preview properties in a week and they all sold with multiple offers.
San Francisco – Our Lakeside manager says the local market is uneven and seems to be in some transition. Prices have risen during the early part of the year but now mostly seem stable, as buyers are sometimes saying no to higher prices. There are pockets with growing inventory while the general market still is short of inventory. One buyer was in a multiple offer negotiation with a seller who demanded too high a price and the buyer was able to find a better property close by that for less money. According to our Lombard office manager, there has been a little increase in general inventory this week. One week there are a few more properties, some longer days on market, even some price reductions and you conclude there may be a slight cooling or leveling off. Then, bam, the next 3 deals had 10, 12 and 15 offers, going way over. It’s hard to see a trend, but there are still a lot of buyers chasing a few good homes. Our Market Street manager also reports that the local market continues to be a bit schizophrenic. Some properties still receive multiple offers (as many as 8 during this period), while others go unnoticed and must do price reductions. It’s definitely a better time to be a buyer, as there are many homes that can be had without having to compete in a bidding frenzy. Is this just the holidays creeping up, or something more substantial? Only time will tell.
SF Peninsula – Every day seems like a new market on the Peninsula, according to our Burlingame manager. One day, things are quiet and then the next is a flurry of activity, all centered on the newest hot listing and which day they are hearing offers. Smart agents are ignoring offer dates and submitting pre-emptive offers, which then generate multiple pre-emptive offers, completely passing by the published offer date. At the same time many buyers are stepping back and refusing to be drawn into the competition so sometimes, a home that everyone thinks will be highly sought after sits on the market while buyers wait on the sidelines and try to gauge the interest. It’s hard to say right now where the fall market will take us as the holiday season approaches. Hillsborough currently has 36 active and 4 pending listings. Listing activity is beginning to slow. Our Half Moon Bay manager reports that inventory in San Mateo County is very low. As of 10/22, there are 464 active single-family listings compared to 624 at the end of June 2014. Open houses are busy. Some agents have it open during weekdays from 4-7 and are getting good activity. If a home is priced right, there are a good number of multiple offers. If the home is not priced right, it’s staying on the market. Buyers are still lining up for prime locations in Menlo Park, Palo Alto and San Carlos. A Menlo Park property listed for $2.2 million sold for 500k over list. It continues to be a brisk market. In the Palo Alto area, properties are selling as soon as they hit the market with multiple offers. Our Redwood City-San Carlos manager says the market seems to change day by day and is very unpredictable. List prices seem to be more realistic but inventory is still very low.
East Bay – Our Fremont manager says there’s been a slight increase in multiple offers. Inventory is slightly down. The medium priced homes are the ones that are selling. Open house activity still remains active and strong – especially in Fremont’s Glenmoor Market. There are still lots of potential buyers going through the open houses in the Oakland-Piedmont area. A couple of the opens had more than 100 groups and several had 50 or more groups. The drop in interest rates seems to have brought more people out looking at the inventory that is available this week, according to our local manager. The Lamorinda market has been steady.
Silicon Valley – Things seem a bit quieter, reported our Cupertino manager. There are some good buyer opportunities out there right now. The Los Gatos area market remains a seller’s market as buyers compete to purchase a limited quantity of inventory. San Jose Almaden market inventory is decreasing, Blossom Valley is holding steady and Santa Teresa decreasing. The local Willow Glen market continues to experience strong buyer demand. Open house traffic has been brisk in all active listings. The only concern is continued low levels on active listing inventory. Buyers are playing the wait and see game as to when offers will be looked at by sellers. At times they are waiting until after the published offer review date to submit an offer typically at or below the asking price.
South County – At the beginning of this year, South County sellers were listing their homes, garnering multiple offers and receiving “top dollar” at closing. This phenomenon encompassed homes at every price level (from entry level homes and condos, to multi-million dollars properties). As the fourth quarter approached, however, this scenario changed dramatically. Many sellers, hoping to jump on the selling bandwagon are finding that their homes are lingering on the market—some for weeks at a time before receiving any offers at all. In a majority of the cases, buyer demand has not met seller expectations. Some of this is seasonal, of course, but it is evident that, at least in the South County, the market as gone from one that benefitted sellers to one that is more balanced and less competitive in nature. Homes are selling, but the frenzy that was normal earlier this year has subsided. Some segments of the market, however, remain strong—this is especially true for moderately priced, single story homes. One over-55 senior community recently opened its models (single story homes—listed around $750,000) and completely sold out its first phase within one weekend.
Santa Cruz County – The luxury properties in Santa Cruz are selling at a good pace and prices are staying strong. Our Capitola office recently closed a sale for $4.8 million, which is a high water mark for recent sales. In the market overall, inventory is increasing a bit while the number of sales is steady. We continue to enjoy attractive interest rates, which have kept the demand strong. At least 20% of sales have been all cash, particularly with luxury properties.
Monterey Peninsula – The Monterey Peninsula market is moving along steadily but our local manager has noticed a slow-down in new listings and ratified contracts. At the same time, the average sale price in our offices has increased 16% over last month so agents are still seeing the upper end market continue to sell. Open house traffic has been on the slow side but serious buyers continue to tour the new listings and properties that have received a price adjustment. It seems that we are headed into the holiday season and hope that with some new inventory we will have a steady fourth quarter.