Tight inventory and unstoppable buyers pushed Bay Area median home prices higher in July, ignoring the economic drag of the COVID pandemic.
Median home prices for single-family homes in the Bay Area rose 8.6%, led by soaring prices in Contra Costa and San Mateo counties. The median sale price for an existing single family home in the nine county region in July was $950,000, according to DQNews, pushing highs not seen since early 2018.
Current market prices have been driven higher by wealthy buyers snapping up more high-end homes and some first time buyers waiting out the pandemic, agents and economists say.
"It's just a hot market," said CoreLogic economist Selma Hepp. Buyers flocked to single family homes, seeking more indoor and outdoor space. Hepp attributed some of the growth in median prices to a pick up in sales of Bay Area homes going for more than $3 million.The Bay Area remains one of the strongest real estate markets in the nation, shrugging off economic uncertainty as high-paid tech professionals have benefited from record stock prices and low interest rates. Mortgage rates for a standard, 30-year home loan have sunk below 3%, according to Freddie Mac, giving buyers extra purchasing power.
The virus depressed overall Bay Area transactions in the spring with fewer sellers willing to risk home tours. But buyers looking for more space in the suburbs were aggressive shoppers in July, bidding up prices on the Peninsula in the East Bay.
Year-over-year prices surged in July, according to DQNews and CoreLogic data from Bay Area counties: median sale prices for resale homes jumped 16.7% to $735,000 in Contra Costa, 10.3% to $1.6 million in San Mateo, 8.2% to $973,500 in Alameda, 5.7% to $1.3 million in Alameda and 2.7% to $1.59 million in San Francisco.
Suburban and rural Bay Area enclaves also saw dramatic growth from the previous July. Single-family home prices jumped 25% in Marin County to $1.5 million, rose 15% in Sonoma County to $690,000 and increased 11.3% to $735,000 in Napa County.
Condo sales even rebounded, with the Bay Area median sale price climbing 8.3% from the previous July.
Home-buying restrictions enacted in March eliminated open houses and restricted the number of prospective buyers in a home, helping to lower sales in the traditional spring buying season. Buyers seemed to postpone purchases into the summer — with Bay Area home sales in July climbing 10% from the previous year. "Spring demand has shifted to the summer," Hepp said.
Agents say buyers are looking for more room — extra bedrooms, yards and personal space as work-from-home becomes the norm for Bay Area professionals. Pools are becoming popular with families.
Compass agent Matt Rubenstein in Walnut Creek said he's seen professional couples looking to move from San Francisco to the East Bay for the added space. Walnut Creek and Pleasanton have drawn tech workers and super-charged the housing market.
Aggressive buyers are bidding up prices, waiving contingencies and making preemptive offers. Rubenstein said that's unusual in Contra Costa County. "I've seen some ridiculous offers," he said.
Cupertino agent Alan Wang also has seen increased buzz in the East Bay. He's seen homes in Pleasanton and Dublin book eight showings an hour for starter homes listed for around $1.3 million. "It's been extremely busy," Wang said. "You would have thought it would have slowed down."
The shoppers are overwhelmingly tech professionals with two-income families. "Tech is one of those unique industries," Wang said. "It's a little strange, for sure."
Caroline Dinsmore, an agent in Burlingame, sees three major drivers in the market: people leaving San Francisco for more space; retirees deciding to leave for safer, rural retreats; and families looking to upgrade.
The common thread, she said, is "people wanting more space."
