Bay Area Home Prices Exceed $ 1 Million In April
The Bay Area’s spring home buying season exploded in April, with sustained sales and prices surpassing $ 1 million for the second month in a row.
The median price of an existing single-family home in the nine-county area hit $ 1.15 million in April, due to tight supply and intense demand for suburban space. The price marks a 12% increase from March, signaling a favorable trend for home sellers but more costly bidding wars for buyers, according to data from CoreLogic and DQNews.
Still, economists and agents say the sparkling market is not a bubble – just a reflection of the Bay Area’s economic strength, homebuyer demand, and insufficient housing availability.
CoreLogic deputy chief economist Selma Hepp said pent-up pandemic demand was pushing prices up. “They are traditional buyers, not speculators,” Hepp said. “When you think ‘bubble’ you think there is speculation. But it is not speculation.
An analysis of FHA loans by housing researchers at American Enterprise Institute of Bay Area properties – particularly in San Francisco, Santa Clara, and San Mateo counties – supports Hepp’s point. He revealed that the Bay Area had the lowest loan default rates in the United States last April.
Research suggests that landowners with government guaranteed loans are making mortgage payments in the Bay Area, unlike the increase in defaults that led to the 2007 housing crash.
Prices are surging in once relatively affordable East Bay communities, while technicians in Silicon Valley are offering more than $ 100,000 off list prices to buy in towns on the peninsula. Low interest rates, hovering around 3% for a standard home loan, have allowed buyers to expand their budgets.
The surge in house prices in the Bay Area was led by Contra Costa County, up nearly 25% from a year earlier to $ 972,000, with Alameda County up 17% to $ 1.18 million, and Santa Clara County, up 11.5% to $ 1.52 million, according to CoreLogic Data. The year-over-year median price rose 8.5% in San Mateo County to $ 1.75 million and climbed 2.9% in San Francisco to $ 1.79 million.
Median prices are up 28% from April 2020 – a low threshold for real estate, with few sales closing during the initial lockdown of COVID-19 restrictions.
Sales of all homes, including new and existing condos and homes, increased 15% from March to April. The number of transactions more than doubled compared to the previous April.
Hepp said part of the intense demand is driven by fear of buyers: “I won’t be able to come in unless I come in now. “
Real estate agents and professionals say the market accelerated to record highs for the last time in 2018. Desirable homes attract multiple bids the day they hit the market.
In Alameda and Contra Costa counties, the average number of days on the market dropped from 25 to 13 between January and May. “The price increases in East Bay are mind-blowing,” said David Stark of the Bay East Realtors Association.
Michelle Ronco of MLSListings said home inventory has started to increase, but not enough to meet demand. In Cupertino and Saratoga, for example, houses are listed and sold on the same day. “What’s coming is coming right away,” Ronco said. “It’s just basic supply and demand.”
The common Silicon Valley trend of selling homes for more than their listing price has spread to Santa Cruz and Monterey counties, as well as Hollister, she said. These areas have all hit record home prices in recent months, according to data from MLSListings.
Cupertino agent Ramesh Rao said professional couples continue to buy single-family homes near the peninsula’s tech offices. He warns customers that they might need to bring in more money to close a deal, as prices have sometimes jumped $ 250,000 or more from the ads.
One of Rao’s clients, a tech couple in their 30s, set out on their search with an initial budget of $ 1.3 million for a single-family home with a beautiful yard in San Jose. They were told to expect to stretch their finances – and ultimately won a bidding war with a bid of $ 1.75 million for a spacious 4 bedroom with a collection of fruit trees in the backyard.
Rao said demand for space remains strong even as pandemic restrictions have eased. “Which buyer ever said, ‘I want a small house?’ “They always want a bigger house,” he said.
The market has been a challenge for many buyers, said Pleasanton’s agent Tina Hand. She had to help clients adjust to East Bay’s fast pace and inflation. “A list price is just a number. The appraisal price is really just a number, ”Hand advises new buyers. “What are you really prepared to pay? “