Housing sales and prices still rocketing
Spring buying season starts early as pandemic’s end appears in sight and mortgage rates continue to be low
By Louis Hansen
Families typically start gearing up in spring to search for, bid on and buy the elusive and usually expensive Bay Area home.
Not this year, not even during COVID-19: homebuying and selling have picked up earlier.
Santa Clara-based agent Alan Wang said the early start in January of this year’s busy season has been more bullish than any he’s seen in nearly two decades.
Wang said buyers priced out of the South Bay and shopping for more space, at a better price, are looking in the East Bay. One family bid on a single-family home in Dublin — only to discover they were one of 49 offers on the house. The four-bedroom home sold for about $400,000 over the $1.7 million listing price.
“ The aggression of the buy side,” Wang said, “ is shocking to us.”
Pandemic restlessness and low interest rates sent sales of existing single-family homes in the Bay Area soaring 36% in January, as buyers hunted for bargains and suburban space. Median sale prices jumped nearly 16% to $860,000 in eight Bay Area counties, driven by scant inventory and hot markets in Santa Clara and Contra Costa counties, according to data from CoreLogic and DQNews. Alameda County data for January was not available.
Condo sales in San Francisco (up 64%) and Santa Clara County (up 39%) spiked year- over year as buyers sensed bargains and an end to pandemic restrictions.
“ It feels like we are already in the spring homebuying season,” said CoreLogic economist Selma Hepp.
The Bay Area home market continues to defy the broader economic slowdown, boosted by the strength of the tech economy and its professionals feeling little financial impact from the COVID-19 pandemic, Hepp said.
"We keep saying, 'When is this going to bust?'" she said. "But it's an insulated market, in a sense." Median home prices continued to rise, year over year, throughout Bay Area counties: prices rose 16% to $1.25 million in Santa Clara, leaped 25% to $720,000 in Contra Costa, and increased 5% to $1.45 million in San Francisco. San Mateo County home prices were flat in January at $1.42 million, according to CoreLogic data.
Home sales data collected by members of the California Association of Realtors saw the median price in Alameda County shoot up 21% to $1.06 million. It marked the seventh straight month the county's median home sale prices have topped $1 million.
The Bay Area remains among the least affordable regions in the U.S. for homebuyers, according to a recent analysis by NerdWallet. Despite high household incomes, the typical family would pay more than seven times its annual income to afford the median home listed for sale in the San Jose, San Francisco, and Oakland metros. Nationally, the median home price is 4.7 times the typical household income of a region.
Realtors say the Bay Area market has become even more competitive, with shoppers looking for more space, bigger lots and move in ready features in the suburbs. A strong stock market, lifting the incomes of tech professionals and other investors, and historically low interest rates of around 3% have increased the purchasing power of buyers.
The number of homes for sale has also dipped, bringing more intense bidding in a market that has favored sellers for nearly a decade.
David Stark of the Bay East Association of Realtors said Tri-Valley houses continued to be popular with buyers seeking more space to accommodate work from home routines and remote learning. Buyers have also been willing to expand their budgets and borrow more. "The three most important words in real estate these days is 'low interest rates,'" he said.
Realtor Jeff Hansen said condo sales have started to pick up after months of slumping. Buyers had hesitated to move to city centers with shops, businesses and restaurants closed, he said.
Downtown San Jose units have begun to draw more interest in recent months, he said. "It's really started to come back since the beginning of the year," Hansen said.
He's also seeing Silicon Valley workers hunting more aggressively in Santa Cruz. Tech workers have been less concerned about commutes during work-from-home routines, he said.
Wang said buyers have been quickly upping bids $50,000 and $100,000 without hesitation. "There's no rhyme, no reason behind it," Wang said.
He added, "the sad part is, not everybody can play in this market."
A construction worker carries a window frame at a town home build site in the Wilshire residential development in 2018 in Dublin. The housing market continues to surge.
SOURCE: Mercury News