As the true estate market picked up steam within the spring, the median home price in two Bay Area counties exceeded $2 million.
In Santa Clara County, the median home price reached $2 million for the primary time – a record number that surpasses even pandemic-era highs, in response to April data from the California Association of Realtors. In San Mateo County, meanwhile, the median sales price was $2.15 million – a decrease from its peak of $2.4 million in April 2022, but a 9.1% increase from April 2023, when the median price was $1.97 million.
Across the nine-county Bay Area, prices rose 15.5% year-over-year, reaching a median sales price of $1.44 million. The average price rose to $1.4 million in Alameda County, $940,000 in Contra Costa County and $1.8 million in San Francisco.
Pre-owned home sales rose 23% year-on-year because the spring selling season reached its peak, even with Fixed rates of interest for 30-year mortgages are around 7%.
“Interest rates are not coming down to the level that buyers want, even though they've waited and waited,” says Janelle Boyenga, a Los Gatos real estate agent. “They've decided: How much longer can I wait?”
In the East Bay, Amanda Piñero and Kenny Handel are weighing whether it will be value giving up their pandemic-era rate of interest for a bigger apartment.
In 2021, the couple, of their early 30s, moved from Austin, Texas, to Berkeley, where they bought a 700-square-foot condo. But recently, space has change into tight, and so they began searching for a brand new place. On Saturday, they toured a 1,000-square-foot home within the Rockridge neighborhood with a small yard for his or her dog, Willie Nelson.
“I find it hard to give up our current interest rate,” Piñero said. “If we try to get something else, we could end up house poor.”
Such calculations have prevented many sellers from selling. But because the 12 months progresses, many realize that they will not wait.
“Time passes and life goes on,” said Oscar Wei, a senior economist on the California Association of Realtors. “People can only delay selling a home for so long.”
The result’s that inventory has grown this spring—the number of recent lively listings within the nine-county Bay Area has increased 25% in comparison with the identical period last 12 months.
As activity increases, homes are spending fewer days available on the market. In the nine-county Bay Area, time on market was 12 days — the bottom time since May 2022 and lower than the 14 days a 12 months ago.
Some real estate agents say high-performing technology stocks are chargeable for the uptick in Bay Area sales, as they permit tech company employees to sell their stock options to make a bigger down payment on a house.
“We tend to follow the major technology stocks that drive Silicon Valley,” said Connie Miller, a Los Altos real estate agent. “As long as they're healthy, the housing market is healthy.”
The stock market rally also coincides with spring market dynamics, when buyers with children often move to have time to enroll in a brand new school district before the beginning of the college 12 months.
Although agents say it's a seller's market, they advise homeowners to make obligatory improvements before listing to get the very best offer possible.
“People want turnkey properties,” Miller said. “With two incomes and already struggling to make ends meet, they don't have time to renovate.”
Some realtors expect home sales to be barely lower in May as rates of interest peaked at 7.2% in late April. According to the state-owned housing finance company Freddie Mac.
The combination of rising prices and high rates of interest is hitting buyers like Piñero and Handel particularly hard. Despite the competition they faced throughout the pandemic-induced buying spree, the couple was in a position to navigate the market higher.
“2021 provided a lot of people with an opportunity to enter the market,” Handel said. “Now we're asking ourselves: Is this the new normal? Housing costs are so high.”
Unfortunately for buyers, it's prone to stay that way – especially if rates of interest fall, as some real estate agents are predicting, which may lead to even stronger demand.
“Buyers might as well jump in right away,” Miller said. “Prices will only continue to rise.”
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