June Market Update

It’s June! The sun’s out, and Bay Area real estate’s got its guns out! News agencies and real estate stats report that for the first time ever in seven years we finally saw a decline in the median sales price in the Bay Area. Yes! A whopping .1% decline in average sales price. That may not seem like much....because it isn’t. Being in the daily trenches of the market, what I do see,  though, is a welcomed flatlining of prices for homes. We’re not getting blown away by offers like we used to be, but our Bay Area listings are still garnering multiple offers over the asking price and oftentimes, sold in less than a week of being on the market. Sales prices are landing at around or just a tad above the last comparable sale, but most agents are listing to look attractive. So, depending on if the list price is above or below market value, they end up selling right at market value. When you think about it though, the true definition of what market value is, is what an able and willing buyer pays to purchase. It’s starting to hold true that each city’s got their average price per square foot and homes are selling within that range.

For the average Bay Area buyer, homes priced under $1.5 million are in high demand and they continue to fly off the shelves. Last month I said single-family homes under $2 million are flying off the shelves, but I want to explain that pertains to homes in the City of San Francisco where inventory is just so tight. For the Peninsula, the market is  also scorching at the $1.5 million and below. That’s what the average double income home buyer can afford these days and that’s who’s buying right now. For the luxury market in the Peninsula, in  areas likes Hillsborough and Burlingame, $4.5M and below seems to be the sweet spot and there’s no crazy overbidding involved. Basically, every entry-level market for single family homes is hot!

Another thing I notice is that first time home buyers are getting more price conscious. They would rather lose 4-6 bids on homes and continue to drudge along submitting offer after offer so they don’t feel like they’re overpaying. Eventually, they do get in contact and sometimes even below the asking price, feeling accomplished and smarter all the while. A couple examples would be our recent sale on Fairmont in Pacifica and the buyers for our listing in San Bruno. While the buyers could afford well over the $1.2 million budget that they’ve set for themselves, (preapprovals showed $1.7M approval amount with cash on hand almost enough reserves to purchase cash), they opted for a more conservative home and kept their reserves and retirement in tact. 

Low ball offers and counter offers are becoming more common, as homes listed at the top of their price range sit on the market. If you’re looking for a deal, contact us to send you properties that have been in the market 45 days or longer. You might get lucky. Thats about the time sellers start getting anxious. Starter condominiums in the Peninsula have flatlined, some newer condos actually seeing a decline in values for sellers who have to sell after short ownership. Speculators from 2 years ago are having to take a loss after commissions, transfer taxes etc are taken into consideration. 

Single family homes just outside of the Bay Area in cities like Suisun, Fairfield, Hercules, Antioch, Pittsburg are now taking a little longer to sell, but they are selling and prices are on the rise. The agents in Solano, Yolo and parts of Contra Costa counties are wary of their appraisers, who are (helping to) keeping their prices down. I’m seeing lots of counter offers asking the buyer to pay up to a certain amount above appraised value in cash. This is tough when most buying outside of the Bay Area are FHA buyers with limited reserves. Working families are moving just outside of the Bay Area for larger, more affordable alternatives so they’re willing to pay a little more to secure a home.

Cash buyers are coming out of the woodwork again too, placing conservative offers on homes. They’re not the top offers like before, and I’m not seeing foreign money, but they’re coming back, placing preemptive offers, tempting sellers with a quick hassle free sale.  Usually what we see are are gift funds from relatives with money. 

Whether you’re buying or selling, now is a great time. Sellers are blessed with ideal weather,  low interest rates and tons of able and willing buyers. If you’re looking to buy, you’re also in good shape. Your competition isn’t as crazy as before and rates are lower than ever! Contact us for more information on a particular market!