Median single-family home values have increased slightly year-over-year. They are also above last month’s average of $1.37 million. So despite Covid-19’s upheaval, the latest stats indicate resiliency in the Bay Area’s real estate market.
Even though we’re in the middle of the summer home-buying season, active inventory dipped slightly. There were less than 1,000 single-family homes available on the market at the end of June. Aculist confirmed that inventory was down 7% from May and down 33% from June 2019.
The Days on Market (DOM) also shortened from 27 to 24 from a year ago and is relatively steady compared to May 2020. The DOM reduction may be a sign that when buyers are motivated by a property — especially those homes staged and priced well — the transaction proceeds relatively quickly.
In the Top Quartile
When you slice available single-family home sales into quarters, the data shows some variation. Most notable is the third quartile, those homes with a median sales price of $1,650,000. This quartile’s median DOM is nine (9) days and an average of 23. I believe this speaks to buyers’ preference for Santa Clara County homes that average 2,000 square feet on larger-than-average lot sizes.
In my experience, the 2nd quartile median price is what many dual-income households can afford in this area. The demand is great for this limited supply, especially from families with kids. The third quartile is similar but homes in the $1.2 million range. They are less likely to be in strong school districts at 1796 sq ft and are located in Santa Teresa, Blossom Valley, etc. Often many 2nd quartile homes are in Cambrian, Willow Glen, and Campbell and neighborhoods with good schools.
A Broader View
The California Association of Realtors reported that the state’s housing market regained its previous losses. Median home prices set another record high, showing a 6.5% gain from May 2020 and up 2.5% from June 2019.
Home sales bounced back solidly in June after hitting a record bottom in May, as lockdown restrictions loosened and pent up demand driven by record-low interest rates roared back,” said 2020 C.A.R. President Jeanne Radsick. While the momentum is expected to be sustained as we kick off the third quarter, the resurgence in coronavirus cases remains a concern. It may hinder the market recovery in the second half of the year.
Additional report findings:
- Median prices increased in all regions in June, with the more affordable markets increasing year-over-year in the high-single digits. The Bay Area and the Central Coast regions, which experienced a dip in price in May, bounced back in June with a moderate increase of 4.2 percent and 5.4 percent, respectively.
- Forty-three of the 51 counties tracked by C.A.R. reported a year-over-year gain in price in May, with Lake County growing the most at 19.4 percent.
- Housing supply continued to trend downward on a year-over-year basis, with active listings falling more than 25 percent for the seventh consecutive month.
Interest Rates Causing a Flurry
30-year mortgage rates have hit new historical lows. For qualified buyers, this is an excellent time to make a purchase. For homeowners planning to retain the home for the mid- or long-term, this is an excellent time to refinance.
To put things into perspective, here’s a Freddie Mac chart plotting 30-year fixed, 15-year fixed, and 5/1-adjustable-rate mortgages over the last three years. You can see that the 30-year fixed is touching the 3% line and 15-year fixed nearing the 2.5% line.
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 just like you successfully negotiate the most important financial transaction you’ll ever make.