Coronavirus lockdowns no match for Bay Area homebuyers
Eager buyers and reluctant sellers pushed Bay Area homes prices higher again in April, fueling quick sales and a robust market despite coronavirus restrictions.
Median sale prices climbed in seven core Silicon Valley and East Bay counties, according to a Zillow analysis. Prices jumped 7% in Alameda County and 6% in Santa Clara County from the previous April. The median sale price in April for a single-family home in the Bay Area was $896,000.
Fewer homes went up for sale as sellers pulled back from having strangers tour their houses, but buyers snapped them up at a pace rivaling the height of the housing boom in 2017 and 2018.
"The really big picture story is that prices, especially for single-family homes, have really held up during the crisis," said Zillow economist Jeff Tucker. The relatively strong, tech-driven Bay Area economy, tight home inventory and historically low interest rates contributed to rising prices during the first full month of pandemic restrictions, he said.
The median price for a single-family home sold in April rose to $1.27 million in Santa Clara County and $940,000 in Alameda County. Other Bay Area counties saw smaller gains: Prices rose 3.1% to $1.49 million in San Mateo, 2.2% to $666,300 in Contra Costa and 3.6% to $1.59 million in San Francisco. Data for Marin and Napa counties was not available for April, according to Zillow.
But buyers and sellers have remained cautious amid health risks. The volume of single-family home sales in Bay Area counties plummeted 21.4% in Santa Clara, 27.6% in Alameda, 10.7% in Contra Costa and 22.9% in San Mateo from the previous year, according to Zillow. Single-family home sales in San Francisco were nearly cut in half.
The U.S. home market has been supported through the crisis by record-low interest rates. The rate for a standard, 30-year-fixed mortgage fell to 3.13% last month, according to Freddie Mac. The median price of a single-family home sold in the U.S. in April rose 4.3% from last year, according to Zillow.
Bay Area real estate agents say they're surprised the market has sustained high prices through the lockdown. Local counties and the state have restricted home showings and real estate transactions since mid-March. Agents have gradually been allowed to show homes; at first, only vacant units but now buyers can tour occupied homes as long as residents are not present. Only two visitors may enter a home for sale with an agent at one time. Social distancing, masks and appropriate cleaning procedures are required. Open houses are still banned.
Many agents have turned to digital solutions, adding virtual 3-D tours to online listings and conducting video conferences with prospective buyers and sellers.
In some cities, the few homes that reached the market sold in just days, similar to the white hot trading of three years ago. Many cities in Contra Costa and Alameda counties saw houses sell weeks faster than in spring the previous year, according to data from Bay East Association of Realtors. Homes in Union City and Moraga spent an average of just 7 days on the market and 9 days in San Leandro. Houses in Hayward last April typically took 36 days to sell; this year, sales took just 11 days.
"It's remarkable how much demand there is," said David Stark of the Bay East Association of Realtors said. "People still want to buy houses."
Los Gatos agent Mary Kay Groth said sellers have been weighing the risks of putting their homes on the market. Some agents have been vetting buyers to ensure only qualified and serious buyers make in-house visits, she said. In some cases, she said, "the process has been somewhat laborious."
Burlingame agent Caroline Dinsmore said she's been out on appointments nearly every day.
Buyers are still looking for turn-key homes in good school districts, she said. The pandemic has made it even more difficult for two-career families to take on fixer-upper projects — in addition to home schooling, working remotely, and managing a move, she said.
Homes in the $1.7 to $2.5 million range, in reach of two-income tech professional couples, remain popular, Dinsmore said. Buyers and sellers have mostly adjusted to the new restrictions, and she's seen activity pick up in recent weeks. Dinsmore expects the typically busy spring buying season to be pushed into the summer this year.
"Now," she said, "is a really weird time."