Even pandemic can't slow Bay Area home prices
A once-in-a-century pandemic, widespread lockdowns and economic woe — none of it was enough to keep Bay Area home prices from going up.
Bay Area single-family homes sales fell nearly 10 percent in March, but eager buyers continued to push prices higher despite coronavirus concerns and restrictions.
Median sale prices in the region increased 1.5%, led by year-over-year gains in the counties of Alameda (5.1%), San Mateo (6.5%) and Santa Clara (4.8%), according to a Zillow analysis. Contra Costa County home prices grew 1.9% from the previous March. The median sale price for a single6family home in seven Bay Area counties was $899,800.
Fewer buyers searching for even fewer homes kept prices elevated for the third straight month. Median prices rose 1.9% in January and 2.8% in February, according to a Zillow analysis of the entire region.
The pandemic has slowed sales, but buyers and sellers have retreated from the market at an equal pace. Zillow economist Jeff Tucker said that as sellers took their homes off the market, demand remained strong and prices stayed up. "No sign of a slowdown yet," he said.
New listings in the last week of March fell 50% from the previous year in San Francisco and the East Bay, according to Zillow data. New listings in the San Jose metro area dropped 34% compared to the previous March. The drops were some of the largest in the country, Tucker said.
"We entered the crisis with pretty much record low inventory," he said. The pandemic has further cut the number of homes for sale, both nationally and in the Bay Area, he said.
March single-family home sales actually grew 5.3%, year-over-year, in Contra Costa County, according to Zillow. But sales fell 18% in Alameda, 9.3% in San Mateo and 9.9% in Santa Clara.
The median price hit $668,300 in Contra Costa County, $928,000 in Alameda, $1.52 million in San Mateo, $1.6 million in San Francisco and $1.25 million in Santa Clara County. Data was unavailable for Napa and Marin counties.
Bay Area agents were encouraged by a strong start to the year — and then crisis struck.
Bay Area shelter in place restrictions limited real estate transactions during the last two weeks of March. Real estate agents were not allowed to show or hold open houses until early April. County recording services were also limited as government workers adjusted to work-at-home routines and security.
Agents reported a chaotic and uncertain business environment. Some continued to show homes, despite restrictions, while others limited their business to calls, texts and video conferencing.
Sandy Jamison of Tuscana Properties in San Jose said Santa Clara County homes have been sitting on the market a bit longer, and some deals have fallen through because of the economic impacts of the pandemic.
But demand remained strong and buyers are looking for deals, Jamison said. She plans to list four or five homes for auction, believing an online sale will generate more interest for her clients.
"The buyers still outnumber the sellers," she said. "That hasn't changed."
Sunil Sethi, a veteran agent in Fremont, has counseled sellers on the new procedures, including clauses in some contracts that make it easier to cancel a deal because of the pandemic. If a seller is worried about the new environment, he said, "there's no use going through the process."
Homes listed for more than $2 million in Fremont weren't selling, according to his analysis of sales data. Most buyers in that range are probably already homeowners, Sethi said, and might not feel compelled to shop during the pandemic.
Matt Rubenstein of East Bay Pro in Walnut Creek said many agents were caught flat-footed, trying to figure out rules for showing and conducting business. But as restrictions lifted, he found demand remained strong for starter homes in Contra Costa County. Most clients came prepared with masks and gloves, and Rubenstein had extra gear and sanitizer if needed.
Rubenstein did five deals in March and April. "I always deliver the keys in person. No more hugs," he said. "Everything but the hugs are there."