From the desk or iPad of Mike James, President of the Coldwell Banker Residential Brokerage San Francisco Bay Area and Hawaii regions.
Sparse housing inventory continues to affect the Northern California market. The California Association of Realtors’ latest report indicates that the San Francisco Bay Area endured a large drop in pending sales due to the lack of available housing. In fact, it dipped 11.5 percent since last July. The report also indicates that San Francisco and San Mateo counties were both down double-digits, 11.0 percent and 21.4 percent, respectively. For homeowners on the fence about selling, the lack of inventory makes it a great time to list because many patient homebuyers are prepared to come in with solid offers.
Read more about what’s happening from our Northern California offices:
Half Moon Bay’s market remained competitive. The luxury market continued with strong demand. Average days on the market was just 17, with a median sales price of $2 million. Menlo Park experienced a fast-paced market with no slowing. Sellers were encouraged to list their homes instead of trying to time the market or wait for a more optimal time. Redwood City had a lack of inventory. Homes priced under $1 million brought in multiple offers. In the $1 million-plus market, homes sat on the market longer before closing.
Cupertino continues to experience a lack of inventory. However, the luxury market is still active up to $4 million. Low inventory was also a key factor in Los Gatos’ market, creating a similar dynamic as in Cupertino. Gilroy and Morgan Hill also endured a lack of inventory causing multiple offers and high closing prices. Even in those markets favoring the supply-side, sellers should be prepared to choose quickly when presented with multiple offers. To submit a winning offer, buyers must put their highest offers first and make the transaction easier for the sellers. San Jose remained active even with declining inventory. Because of the decreased supply, prices have slightly increased. Sellers can take advantage of the high demand. Buyers should think long term and be prepared to make a strong offer. Factors such as multiple offers or slightly higher asking prices should not deter them from putting in offers. Saratoga’s market saw an increase of 21 percent in the average sales price year-over-year. The luxury market remained active with five listings and four sales.
Santa Cruz County
Offices in Santa Cruz saw a strong month. Average sales prices have been increasing steadily for the last five years by $30,000 to $90,000. This year is no different, with the average sales price of $950,000 and an average list price of $1,050,000. Buyers have been more aggressive in their offers. The luxury market in Santa Cruz peaked in comparison to the last few months with an average of just 50 days on the market (instead of 54 days), and experienced significantly more sales above the $1 million mark over past months.
After the excitement of Concours d’Elegance, the Pebble Beach classic car show event, the Monterey Peninsula market has returned to normal. With the end of summer traditionally being one of the strongest sales periods – along with a continued sellers’ market – it was a great time to list properties. The luxury market slowed slightly because of inventory, but still had significant activity. Monterey also has some luxury golf properties listed and available that should garner buyer excitement.
In Fremont, inventory remained low and prices held firm prompting multiple offers on most properties. Even with the current sellers’ market, buyers still have a chance to find their dream home with increased listing activity expected in the fourth quarter. Sales for Fremont’s luxury properties priced between $1.4 to $3 million were not as active due to sparse inventory.
Despite the shortage in inventory, many buyers in Greenbrae are still searching for their dream home and want to take advantage of low interest rates. Sellers came out ahead by pricing their homes competitively. This strategy encouraged more buyers to place offers and led to above-asking closings. Historically, September sees the highest amount of inventory in the area so it should be a solid month. Southern Marin experienced a similar trend, a sellers’ market with multiple offers. Demand will be strong, so buyers should be prepared to bid against multiple offers and bid over asking price.
Tahoe offices had an increase in interest, especially with summer vacationers checking out the area. A slight increase in inventory over the past couple of months coupled with favorable mortgage interest rates encouraged buyers to start house hunting and created a strong market for sellers to list and sell their homes quickly. In the luxury market, sales on properties priced above $1 million is down 20 percent compared to 2016. There has been an increase of just over 1 percent in average sales price of luxury homes at $2,277,113 as opposed to the 2016 average of $2,248,678.
Folsom’s inventory increased, encouraging buyers to stay in the market. This has created a great opportunity for buyers and more properties to choose from. The luxury market is still strong, but sellers must ensure to price their homes competitively. Sacramento Fair Oaks experienced the seasonal inventory climb, increasing by 10 percent compared to the previous month. Although in a year-over-year analysis, inventory is still down by 12 percent, the uptick in listings gave prospective buyers some much-needed relief. On average, the region has seen an increase in listings as the summer winds down with steady sales. Properties are still affordable and square footage prices are significantly less than the Bay Area average. The luxury market is experiencing a stronger buyer’s market and a larger amount of inventory. Sierra Oaks had an increase in both listings and sales, with multiple offers on entry-level homes. The luxury market experienced an increase in activity with both listings and purchases.
El Dorado County
Although El Dorado Hills continued to see low levels of inventory, there was a slight increase in days-on-market before a close. Inventory priced under $500,000 had fewer multiple offers. With fall and the end of the year upon us, many prospective buyers are looking to close on a new property. The luxury market also saw low inventory prompting buyers to make their strongest offer.