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Sellers are realizing that if they are not getting the offers or showings, their property is ready for a price adjustment. The Carmel Valley market continues to move quickly with several closings in the last 30 days. The Pacific Grove market inventory continues to be very tight with more buyers than properties available. Our office just closed a Pebble Beach estate for $7 million that is literally tear a down.
Investors could invest in these projects or buy properties in the hopes that they are torn down and redeveloped. This is why burned-out husks can sell for hundreds of thousands of dollars and ones with demolition permits can sell for a million or more. Since 2021, the inflation rate jumped 7.5 percent, and Golden Staters are feeling the effects on everything from gas to groceries. But last year, home prices rose 20 percent, outpacing the inflation rate.
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Only those who do not have enough money for a down payment are delaying their purchases. Looking at the low supply of homes, high-interest rates, interested buyers may have a difficult time finding available properties in the Bay Area in 2022. Hence, sales and prices are expected to decline further in the coming months.
The number of active homes over $2 million has increased slightly each month starting with 33 in January and 42 currently active in May. The median sale price for a Bay Area home last month was $1.25 million, which is 0.5% less than September's price of $1,256,500. It is the price in the very middle of a data set, with exactly half of the houses priced for less and half-priced for more in the Bay Area real estate market. It shows that the Bay Area housing market is distinguished by high demand and a scarcity of available inventory.
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As a result, there are more price adjustments of late, but these still only make up a smaller percentage of the market. In short, the market is strong but just experiencing normal supply and demand fluctuations. Days on market have increased and frenzy bidding or multiple offers being the exception as opposed to the rule. Our Los Gatos manager notes that buyers are getting a slight reprieve as more inventory hits the market. Our San Jose Almaden manager says inventory is creeping up and he’s still seeing multiple offers although not as many as previous months.
Sales last month, meanwhile, fell 6.5 percent from a year ago as the market continued to deal with low inventory levels. But the 8,679 sales in June 2016 was up 8 percent month over month from May. Although it’s normal for sales to increase between May and June in the Bay Area, last month’s jump was greater than usual. The data from NeighborhoodScout reveals that San Francisco real estate appreciated 100.33% over the last ten years, which is an average annual home appreciation rate of 7.20%.
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Over $1 million hit a low mark of 16 sales in February and averaged 35 in March and April. If the trend from 2015 follows we will expect to see this rise to an average around 48 closings per month through September. The Santa Rosa Mission office manager reports that the lower end of Previews market is very active but activity diminishes as you move up the price ladder. Our Southern Marin manager says the luxury market has had a flurry of activity with several sales for $10 +/- million in Ross/Kentfield and Tiburon/Belvedere.
Another $250 million investment fund would be utilized to provide incentives to enable developers to build at least 5,000 affordable housing units across the Bay area housing market. Underpinning the Bay Area real estate market and general economy are often amazing, but sometimes worrisome statistics. Below are tables and charts ranking counties, zip codes and cities by a variety of parameters. The median price for single-family homes in the Bay Area jumped last month to a record $750,000, reflecting the region’s red-hot demand for housing — even as short supply drove down the number of homes sold. Zillow, the real estate website, forecasts home values all the way down to the ZIP code. It first looks at macroeconomic factors such as unemployment, mortgage rates, construction costs and land availability, then looks at what prices are likely to do based on what they are doing today.
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Sales might be slowing, but home prices probably won’t come down anytime soon — at least not significantly. This is largely due to the inventory shortage we’ve seen in recent years. Home sales of $500,000 or more accounted for 69.7 percent of all sales in April, up from 66.3 percent in March and up from 65.5 percent in April 2015. The April 2016 $500,000-plus share was the highest since August 2007 when it was 72.1 percent, CoreLogic noted. Prices in Southern California are nearing their prerecession highs — Los Angeles’ HPI is 2.8 percent short of its May 2006 peak, while San Diego’s is 4.4 percent shy of August 2005.
Even with increasing inventory it is a competitive market with many properties still seeing multiple offers. The local Willow Glen market continues to see active listing inventory increase week over week. The market has surpassed the 100-unit mark, which is a three year high for active listing inventory for this area.
This figure puts San Francisco in the top 10% nationally for real estate appreciation. And within San Francisco, some individual neighborhoods’ home values have jumped by more than 100%, according to Trulia & Zillow. Here are the five San Francisco neighborhoods that have had the biggest jump. San Francisco real estate market is perpetually constrained in terms of inventory. Several factors contribute to this, but principally the strict zoning laws prevent new development and high-rise construction throughout the city.
The San Francisco real estate market is, for better or for worse, beholden to several competing interest groups. They want to protect the look and feel of the community, and through high-rise construction could start to relieve the overcrowding in the San Francisco real estate market. This is a good sign for new homebuyers and investors as far as affordability is concerned as many of them can’t afford to buy a median-priced home in San Francisco.
Entry level properties (single family homes in the $700,000 range) are in high demand with double digit offers very common. This week saw the first slight dip in the home and condo inventory count after a couple of month’s increase, according to our Lombard office manager. Over 80% of SFH’s are still exceeding the listing price, whereas almost half of recent condos closings have been at or lower than asking.
The strict zoning laws, coupled with the fact that the SF is only seven by seven miles, make it a very constrained market and keep supply perpetually low. San Francisco sits on a peninsula, surrounded on three sides by water. Why doesn’t everyone just move out of the San Francisco housing market?
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