Bay Area Home-Buying
The Bay Area’s housing market looks like it’s headed for a competitive free-for-all this year as a low supply of homes for sale has droves of buyers bidding up prices everywhere.
Sales of single-family homes in the East Bay, Peninsula and South Bay were the lowest for a February in seven years, according to a report Wednesday from real estate information service CoreLogic DataQuick.
The region’s housing market has been grappling with low inventory for years. Still to be seen is whether high prices will finally lure sellers off the fence, and, if not, whether prices will continue to rise. Other constraints on sales include tough loan requirements and affordability. For many buyers, the prices may have finally gone beyond their reach.
“March should provide a better view of emerging trends this year,” said Andrew LePage of CoreLogic DataQuick. “That said, it is easy to see that supply is still constrained.” Agents say they expect inventory to increase throughout the spring buying season.
February sales dropped by double digits from a year ago along the Peninsula and the South Bay and parts of the East Bay, CoreLogic DataQuick reported. Only Contra Costa County managed to hold the line with a relatively small 2.2 percent drop in sales.
The East Bay scored the biggest percentage price gains over February 2014, with Contra Costa County jumping 12.2 percent to $450,000 and Alameda County rising 9.6 percent to $548,000. Santa Clara County was up 8 percent to $782,000 and San Mateo County rose 4.7 percent to $921,500.
Real estate agents say it’s a classic seller’s market, except there aren’t many sellers.
That has buyers trying to outbid one another, sending prices skyward, said Ken DeLeon of Ken DeLeon Realty in Palo Alto.
“I don’t see any bubble at all,” DeLeon said. “I just see a lack of inventory.”
It’s pretty much the same in the East Bay. “We are experiencing a little bit of craziness right now,” said Tom Hendershot, a Redfin agent who covers the Oakland-Berkeley area. “We have less inventory on the market right now than we did at this time last year.”
Houses that have been on the market for two weeks or less are receiving an average of eight offers, he said. “It’s across the board, not just the most prestigious neighborhoods.”
Marisol and Rob Greenlee first bought a home in nearby Clayton and then put their Walnut Creek home up for sale, a nerve-racking but successful move.
“It was fast, it was thrilling, it was scary,” said Marisol Greenlee. “We had three offers.”
One was under the asking price of $1.075 million, one was for the asking price and one — the winning bid — was $75,000 over.
“The over-asking was coming from the Peninsula, where the market is so hot right now,” she said. “They came in aggressive and they got it.”
Craig Gorman of Intero Real Estate in San Jose and president of the Santa Clara County Association of Realtors, said a client recently put a 1,200-square-foot home in Santa Clara up for sale at $850,000 and sold it for $1.22 million. “It was a nice home but nothing off the charts,” Gorman said.
Home sales usually pick up in March.
“This is a very typical market,” said Margaret Garber-Teeter of Alain Pinel Realtors in Walnut Creek. “Right before spring there’s no inventory and a lot of pent-up demand.”
Garber-Teeter said buyers have to jump to get a house, but if they’re preapproved, make a good offer and move fast, they have a good chance of closing a deal.
Showing how prices have rebounded since the housing crash, she just listed a home in Alamo for $1.2 million that was once a short sale. That’s about what it commanded in 2007, she said. At the first open house last weekend, 65 potential buyers toured it.
Why the reluctance of owners to sell?
Chris Trapani, founder of Silicon Valley’s Sereno Group, said many homeowners with lots of equity from the past few years of rising prices are reluctant to sell and hand a big chunk of it over in capital gains taxes. Nor do they want to worry about finding a place to buy.
In the areas of Contra Costa County hardest hit by the housing crash, homeowners are just now seeing their equity recover, said Joy Di Ricco of Better Homes and Gardens Real Estate in Antioch.
“Now that they’ve recouped some equity in their home, they’re on the fence,” she said. “Do they purchase a new house, cash out, refinance?”
The answer for many is refinancing, taking some cash out to fix their place up with an eye toward selling it later on, she said.
Contact Pete Carey at 408-920-5419. Follow him at Twitter.com/petecarey.