Median Sales Price Hit Historic Levels

The latest market statistics are reporting several historic firsts. Nationally, interest rates are inching up. Locally, inventory is 25 - 50% below March 2021 levels. According to the SF Chronicle analysis, there’s no other region in the nation that has seen more home sales of $1 million or higher than the Bay Area. Even with low supply and rising interest rates, median home sales prices have dramatically increased since the pandemic.

What I'm Seeing Now

That’s the big picture. Recently the market has shifted. Here’s what I’m currently seeing at the local and micro-market level:

• It’s still a sellers market but the frenzy that existed just a month ago has cooled. This likely means that prices have plateaued.

• The increased interest rate, volatile NASDAQ, and inflation may be catching up to the market.

• Buyers are fatigued. The last two years have been brutal for buyers, having to compete against multiple bids that are well above list price.

We may have hit a market peak but we don’t really know as the data lags. Or, it could be a seasonal slow down as we approach Memorial Day. Only time will tell.

Rising Rates, ARMs & Getting Creative

The Fed raised the Fed Funds rates by .5% this week. Even though mortgage rates are still below historical averages, buyers are now looking at adjustable rate mortgages to reduce their payments. If you need a trustworthy and knowledgeable lender, I highly recommend several in our area.  I’ve found that having a local lender has many advantages. Let me know if you’d like a personal introduction.

New CA Program Helps First-Time Buyers

California has launched a new program, the Forgivable Equity Builder Loan, that allows qualified first-time buyers borrow up to 10% of a home’s purchase price. If they live in the home for five years, the debt is forgiven. Essentially this program allows a new homeowners to develop equity faster and help them refinance to a lower interest rate after the five year period ends.

This program is great news for first-time home buyers who need help with their down payment. Forgivable Equity Builder Loans are available to middle-income families making less than 80% of their county’s annual median income below $120,000 in all Bay Area counties.

San Jose-Sunnyvale-Santa Clara CA Metro

In ISN’s recent report, the San Jose-Sunnyvale-Santa Clara Metro area was #1 in the percentage of luxury home sales. While I think their median property values are a bit off, I do believe the comparison to other metro areas are correct. By the way, SF-Oakland-Berkeley came in #2.

Bay Area Market Stats

Santa Clara County Median Price Approaches $2M

As of the end of March, the median sales price for a single family home in Santa Clara County reached $1.92M. That’s a 20.75% increase from March 2021’s $1.59M. And there’s demand. March data showed homes, on average, were closing at 18% over the asking price. It’s took fewer days on the market (DOM) to transition from an open listing to a ratified contract: dropping from 16 to 10 days.

For condos and townhomes, the numbers were similarly positive.  The median sales price crested over the $1M mark. On average, townhomes and condos closed at 13% over the asking price. It took fewer days on the market (DOM) to transition from an open listing to a ratified contract: dropping from 27 to 11 days.

San Mateo County Median Sales Crests $2.06M

The median sales price for San Mateo County single family homes officially crossed over to $2 million. On average, homes closed at 15% over the asking price. It took fewer days on the market (DOM) to transition from an open listing to a ratified contract: dropping from 18 to 11 days.

For San Mateo County condos and townhomes, the numbers are similarly positive. The median sales price is nearing $1M.

Santa Cruz County Stats

The March numbers for Santa Cruz County single-family homes painted a particularly positive picture. Comparing March 2021 to March 2022, the median sales price increased 44%! With inventory at 50% of the previous year, we’ll see what happens as we the buying season continues.

Santa Cruz County condos and townhomes are also seeing an uptick, with nearly a 27% increase in sales median price year over year. March ended with only 20 homes available for sale.

The Seller's Dilemma

For sellers looking to permanently move out of the Bay Area, the financial decision to put their home on the market is a relatively easy one. For those sellers who want to remain in the area, that decision-making process can be more problematic. The market may have shifted but we don’t know yet. As I mentioned earlier, the data sets lag. Your neighborhood and home is unique, and we’ll need to do a market analysis to determine your best course of action. Please give me a call to discuss your options.

Reach Out & Connect

I’m meeting with clients via phone, video conferencing, and by appointment. Whether you’re looking to buy or sell, you need an experienced guide in this complex and fast-paced real estate market. I’ve helped hundreds of individuals like you successfully negotiate the most important financial transaction you’ll ever make.