Real estate agent Julie Wyss knows that buyers are getting desperate to get their hands on a home, because even some of her less desirable listings are receiving offers over asking.
Just last week, she sold a San Jose condo built in 2008 that overlooks the freeway for $60,000 more than the listing price.
“It’s not even cute,” joked Wyss, who works mostly in the region’s largest city. “The agent who wrote the offer was basically begging.”
Home sales across the nine-county Bay Area rose 25% in February from the prior month, according to new data from the California Association of Realtors — showing signs the market may be gaining momentum leading into spring, when Bay Area home sales typically peak.
“We’ve seen an uptick in demand, and that’s put pressure on the market,” said Jordan Levine, a senior economist for the state association.
Statewide, California saw more home sales in February than in any month last year.
“For us to have exceeded the spring home buying peak from 2023 already this year — that’s a really good sign for home sales,” Levine said.
Still, inventory remains low — and that’s creating tough competition among buyers, pushing up prices. In the Bay Area, the price of the median single-family home rose to $1.26 million in February, up 22.6% year over year. The median price jumped to $1.81 million in Santa Clara County, $1.59 million in San Francisco, $1.30 million in Alameda County, and $850,000 in Contra Costa County. The median price fell 7.6% year over year in San Mateo County to $1.92 million.
Grace and Josh Steadmon are feeling the crunch. Last year, the family of three expanded to five when Grace gave birth to twins — making it all the more urgent to find more space. Despite looking for months in San Jose, they have yet to close on a home.
“The housing market is really tight, especially for houses in a good school district,” said Grace, an economics professor at UC Santa Cruz. “Houses seem to go really fast.”
She’s not wrong — according to Redfin, homes in Santa Clara County are spending just 11 days on the market, down from 19 days last year. Compare that to 16 days in San Mateo, 13 days in Alameda County and 14 days in Contra Costa County.
The problem: So many buyers want exactly the sort of home the Steadmons are seeking.
“The generic buyer wants a three-bed, two-bath with a backyard, and decent schools, around 1,400 square feet,” said Jeet Dholakia, a San Jose-based agent. “There are only a few pockets around our area that fit that criteria, and most of those areas only have one or two options at any given time.”
With interest rates for a 30-year fixed-rate mortgage at 6.79%, many homeowners have decided to remain in their current homes rather than trade up for a new one, preferring to keep the 3% rates some locked in during the pandemic. Real estate agents and homebuyers are crossing their fingers, hoping that the Federal Reserve will lower interest rates — but policymakers have indicated that, so long as inflation continues to overheat the economy, those cuts aren’t coming anytime soon.
The shortage of available homes has pushed some buyers to give up their dreams of a single-family home and buy a smaller property instead. Condo sales in the Bay Area were up 19.4% from last year, according to industry data.
“I’m seeing a lot more condo buyers than I have in a long time,” Wyss said. “We’ll probably continue to see an uptick in condo sales in the next few months, because there are so few single-family homes out there.”
Still, not all areas of the Bay Area are seeing such frenzied activity. On a sunny afternoon last Sunday, just six groups trickled through an open house for a four-bedroom, 1.5-bath Victorian in West Oakland.
Michael Braillard, a real estate agent, stands in the front door of a listing in West Oakland. Although home sales are up around the region, certain areas like West Oakland haven’t bounced back as quickly. (Kate Talerico/ Bay Area News Group)
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“The pandemic impacted West Oakland more than other areas here,” said Michael Braillard, the agent representing the seller. “The main draw for this neighborhood was that people could hop on BART and be in downtown San Francisco in one stop.” Now, with remote work more common, a shorter commute is less of a priority for buyers.
He still expects to get a few offers on the home — its vaulted ceilings, wooden floors and expansive backyard are a huge draw for the right buyer.
“It might just take two to three weeks on the market, instead of seven days,” Braillard said. “It’s still a very active market.”