Hot, hot, hot! If you’ve been dreaming of living ‘by the bay,’ it just got a lot more expensive! San Francisco Bay Area home prices soared 11.4% across its 9 county region from January, 2016 to January, 2017, to a median of $675,000.00. Home prices were even hotter in January, 2016, when prices topped a 14% increase but even so, an 11.4% increase in one year is enough to make buyers wonder if their dream home will ever become a reality in the Bay Area market.
Let’s look more closely at several of these counties for the specifics. Santa Clara County’s median price rose 11.4% to $960,000. Last year at this time, Santa Clara posted a peak median price of $1M., 4% higher than today’s median price. Even so, Adam Touni, a local agent with Pacific Union, said “I’ve not seen this kind of activity in two years. Here, a starter home is $2.5M.”
Alameda’s median home price is up 12.3% in one year to $730,000. Again, this is lower than Alameda County’s peak at $767,500. in May of 2016. San Mateo County, also 8.1% below its peak of $1.265,000. in October, 2016, is now up 16.2% from last year’s total at $1,162,000. And lastly, Contra Costa County is up 9% from February, 2016 to February, 2017, to $501,250,000. but still below its pre-recession record of $654,000.
Not everything, however, is roses in this seller’s market. The number of sales across the Bay Area dipped to just 3,272 in 2016. Most real estate prognosticators say that this sluggish number of sales was due to an extremely short supply of homes on the market. Trulia, one of the online real estate juggernauts, calculated that the total inventory of starter, mid-tier and luxury homes on the market has declined by 59.6% in Alameda and Contra Costa Counties, by 63.5% in Santa Clara and San Benito countries, and by 62% in both San Francisco and San Mateo Counties.
Low inventory plays havoc with multiple offers and bidding wars. In tech centric hot spots like Sunnyvale, Alain Pinel agent Mark Wong notes that “…over a dozen homes here sold last month for between $202,000. and $401,000. over the asking price. The listing price doesn’t mean anything.”
Because home prices have escalated so much in the Bay Area, residents looking to downsize are steeling themselves with the reality that “…whatever we get is not going to be as good as what we have…but what are we going to do? Prices are what they are and there’s not much to choose from. We’ll be lucky to get whatever we can get.”