More inventory is becoming available in the San Francisco Bay Area for the first time in two years.
Luxury Buyers in Bay Area Getting Some Relief
Home sellers in the San Francisco Bay Area have ruled the roost for the last two years. Now, thanks to steeply rising interest rates, astronomical home prices and global and economic instability, market dynamics are adjusting.
“I think like a lot of areas in the country the (Bay Area) market seems to be pivoting, but it’s interesting, because we still have relatively high prices,” said Danielle Hale, chief economist for Realtor.com. “But we’re also seeing homes sit (on the market for a bit longer.) That could mean new opportunities going forward, but we’re not seeing that just yet.”
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Luxury Inventory Increasing
According to data collected by Realtor.com for MansionGlobal, new listings for homes priced at $1M and above increased quarter-over-quarter in every county in the Bay Area during Q1 2022. $1M+ listings increased in Napa, San Francisco, Alameda, Solano and Contra Costa counties on a year-over-year basis during Q1.
Likewise, every Bay Area county except Alameda, Contra Costa and Solano experienced year-over-year price increases. Marin County saw home price increases of +36% y/y, the steepest increases of all counties within this region.
No Pricing Steals But More Breathing Room
“Generally speaking, luxury home sales in the Bay Area have been holding up quite well, much more so than less expensive segments (which are seeing significant declines),” said Patrick Carlisle, chief market analyst for Compass in the Bay Area. “However, I believe luxury buyer demand is indeed softening with all the stock market volatility…affluent buyers are typically much more affected by scary stuff happening in the financial markets than by interest rates.”
Not only has the pace of sales slowed a bit, buyers are beginning to see more available inventory. Likewise, bidding wars are also beginning to evaporate.
Taso Tsakos, managing partner of The Agency in San Francisco’s East Bay region, said, “Before buyers were competing with seven, 10, 12, 15 offers. Now we’re putting properties on the market and instead of getting five or six offers, we’re hoping to get one…depending on how (the house) was priced, you might get the asking price now…not $400,000 over asking.”
Realtor.com’s Hale believes that now buyers have room to negotiate. “…the market does seem to be at a turning point. It’s fair, especially if you’re not in a rush, to test how much negotiating power you may have. It’s likely more than you’ve had in the last couple of years.”
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Thanks to Realtor.com and MansionGlobal.