With high demand and a tight market, Bay Area housing prices continue to soar, setting record highs in April in Santa Clara and Alameda counties.
The median price of a single-family home in Santa Clara County hit seven figures for the first time last month: $1 million on the button. Prices grew even dizzier in San Mateo County, where the $1.2 million average matched the previous record, set in May 2015.
The East Bay also saw a run-up in prices, with the median Alameda County home reaching $750,000, up more than 10 percent from the previous month. Tugged upward by prices in Walnut Creek and other high-end areas, the median Contra Costa County price grew to $525,000, its steepest in seven years, according to new housing figures released Wednesday.April 2016: Paul and Ruby Callary speak with their realtor Mark Wong before an open house at their home of 27 years in San Jose, Calif. (Karl Mondon/Bay Area News Group))
“We just don’t have a market under $700,000 in Walnut Creek,” said Alain Pinel agent Margaret Garber-Teeter. “And even at $700,000, you’re going to be in second-tier schools. So there’s still an affordability problem for young families, unless their parents help them, and a lot of young families get help.”
Overall, the Bay Area’s nine counties saw the median single-family home price rise to $725,000, just shy of the $738,500 peak of July 2007.
“It’s the same story: The housing supply isn’t keeping up with the demand,” said Andrew LePage, research analyst for real estate information service CoreLogic, which released the latest numbers. “Mortgage rates remain low. The region’s generating jobs. But you still have relatively low inventory, at least in the mid- and lower-priced markets, where most people are shopping.”
The numbers reflect a crisis that is squeezing low-income earners and the middle class. According to a recent poll by the Bay Area Council, more than a third of the population, fed up with housing costs and endless commutes, are considering moving away.
While regional prices rose last month, the volume of sales fell from a year earlier: by 9.5 percent in Santa Clara County, 18.3 percent in San Mateo County, 13.1 percent in Alameda County, 5.1 percent in Contra Costa County and 9.5 percent for the nine-county region. It was the second consecutive month of year-over-year declines for the Bay Area.
Recognizing that there aren’t enough houses to satisfy all the potential buyers, computer engineer Eugene Jong sensed a seller’s market and worked it to his advantage.
Two years ago, he and his wife, Linda, also an engineer, moved from their San Jose townhouse to a single-family home in Los Gatos.
He watched as San Jose prices kept rising. Then in April, he pulled the trigger, listing the 1,250-square-foot townhouse for $599,950: “The open house was a month ago. The first day, 100 people came. The second day, about 50 more came. I had some numbers in mind in terms of the selling price — what would be average and what would make me feel really happy. And it ended up that the price was way above the price where I felt really happy.”
The townhouse drew 15 offers over the asking price and sold in seven days for $665,000.
Alain Pinel agent Mark Wong, who negotiated the sale, said it was a matter of good timing: If Jong had delayed and listed his townhouse in May, his fortunes might now be up in the air — at least in part because the amount of inventory is “creeping up” and softening competition.
“The market is shifting right now,” Wong said. “The market is really mixed. Some people are getting multiple offers, some are getting no buyers. Just in one month, the market has changed a lot.”
High prices “are the new normal,” said Julie Ray, a Coldwell Banker agent in Redwood City, “and fabulous houses with curb appeal” still get grabbed up. But “buyers are getting more picky. The inventory has come up to a level where people say, ‘You know what? This one I’m not going to bid on, because it’s not what I want.’ ”
In Contra Costa County, Garber-Teeter agreed that May has brought “a leveling” to the market. In more affordable areas — she mentioned northern Concord, near Pittsburg — inventory has opened up to the point that “the market is softening, homes are sitting.”
Even in desirable Lafayette, Moraga, Orinda and Walnut Creek, she said, “We do have a little more inventory, but then you have to weed through that and find the few that are ready to go.”
Expecting stiff competition in April, Garber-Teeter helped clients Tom and Heather Young “get all their ducks in a row” in order to sell their Walnut Creek house and buy a new one in Orinda.
They had purchased the Walnut Creek home, a fixer-upper, for $475,000 in 2009, and spent $225,000 on improvements. Last month, they listed it at $985,000, held open houses on two consecutive weekends, then took offers on the Tuesday after: “We had multiple offers and a buyer that night,” said Tom Young, who runs an online advertising company and works at home.
The selling price: $1,070,000.
Last month, they also bought their new place in Orinda: four bedrooms, four baths and 3,700 square feet on a hillside with 100-year-old oak trees and “tons of wildlife.”
It listed at $1,350,000. Their bid — for $1,475,000 — was one of five. The seller went with a higher offer, but the deal fell out of escrow. The seller then approached a second buyer, who dropped out, leaving the Youngs as main contenders. They had lined up those ducks, showing liquid funds and pitching the seller with a persuasive letter and a photo of their 6-month-old baby.
Now in his new home, Tom Young called last month “the most stressful period of my life, not because anything terrible happened, but because there were an overwhelming number of scenarios to think through and my brain got pretty busy. Now I’m waking up in a brand new place.”