Bay Area homebuyers shook off any lingering reservations about shopping during the coronavirus pandemic, driving median sale prices up nearly 20% in September in a tight housing market.
The median sale price of an existing Bay Area single-family home climbed to $965,000 in September, near peak levels set in 2018, according to DQNews and CoreLogic data.
Real estate insiders say a swell of high-end sales pushed prices higher, as homebuyers sought bigger houses and yards for a long-term future of remote work.
"At the end, it's really about your home and your space," said Selma Hepp, deputy chief economist at CoreLogic.
The median price in September in Contra Costa County jumped 18.6% to $750,000, rose 15% to $1.33 million in Santa Clara County, increased 12.1% to $1.63 million in San Mateo County, and grew 12.1% to $975,000 in Alameda County, according to DQNews.
Sale prices in 7 of 9 Bay Area counties rose by double-digit percentages. Only San Francisco, up 9% to $1.6 million, and Sonoma County, up 8% to $665,000, lagged behind other hot markets, according to a DQNews analysis.
CoreLogic's home price index, which measures home price trends, saw San Francisco values dip 1% in September, while Oakland rose by nearly 5% and San Jose grew almost 7%, Hepp said.
After coronavirus restrictions and concerns dampened spring sales, Bay Area buyers have come back with a vengeance in recent months. Home sales grew 33% from the previous September.
Nationally, high prices and the prolonged recession have made it the toughest market for buyers since late 2018, according to a survey by the National Association of Home Builders and Wells Fargo.
The survey found 58% of new and existing homes sold in the third quarter were affordable to the typical U.S. family, down slightly from the previous quarter. San Francisco and San Mateo County remained the least affordable in the country, with just 9% of families making the median household income of $130,000 able to afford to buy a home.
Santa Clara County was also among the five least affordable markets.
Agents report brisk sales, anxious house hunters searching through limited inventory, and bidding wars for desirable suburban properties with indoor and outdoor space. Work from home rules at major tech companies — in addition to rising stock values — have given tech professionals added incentives to step up the property ladder or shop for their first home.
Mortgage rates have remained at record lows, sinking below 3% for a standard 30-year home loan, according to Freddie Mac, giving buyers more purchasing power.
Tina Hand, president of Bay East Association of Realtors, said parts of Alameda and Contra Costa counties have historically low inventory of homes for sale. Overall East Bay inventory is down 30% from the previous year.
Homes are being snatched up quickly, with bidding wars driving prices well above listings, she said.
Hand listed a four-bedroom home with a fenced yard in Hayward for $739,000. The sellers received 10 offers and sold in under three weeks for $792,000. "The buyers are out there," she said.
Cupertino agent Ramesh Rao has seen buyers willing to stretch their budgets for single-family homes. Tech buyers also have been boosted by recent company acquisitions that have driven up personal wealth.
Buyers have been aggressive in Saratoga, Cupertino and Los Altos, among other South Bay cities. Rao noted two recent sales that went for more than 20% over the asking price. "People are looking to get in at any cost," he said.
Polaris Realty founder Ron Abta has seen shoppers looking to leave San Francisco for nearby suburbs keeping "a pinky-toe in the city." The pandemic has shuttered restaurants, bars, theaters and other attractions that draw young buyers and renters.
Single-family homes in San Francisco are still selling, he said, but buyers have been staying away from high-rise condos. Condo prices dipped nearly 2% in Santa Clara County and almost 8% in San Francisco, according to DQNews.
Abta is still bullish on the long-term prospects of the city. "San Francisco is on sale," he said. "It's very rare."
