The Bay Area’s real estate market soared in June, setting some new records for sales and prices as homebuyers scrambled to act before mortgage rates climb and the new school year begins.
Contra Costa and Alameda counties led the charge, registering year-over-year sales increases of 28.8 percent and 21 percent, respectively. The sales volume rose by a more modest 11.1 percent in Santa Clara County, where the median price for a single-family home hit $940,000, a record.
The median price is the midpoint of what’s sold.
“There’s been some unleashing of pent-up demand here because of months of better job growth and mortgage rates that are still really low,” said Andrew LePage, research analyst for the CoreLogic real estate information service, which released the figures. Sensing that inventory may be expanding in some quarters, he also attributed the brisk sales to “significant numbers of people thinking those mortgage rates may not stay that low a whole lot longer.”
Federal Reserve Chair Janet Yellen this week said interest rates could be hiked later this year if the economy keeps improving.
The 6,832 homes sold in June across the region was the highest total since June 2006, when 7,302 homes were sold.
But even with sales increasing, the Bay Area market’s soaring home prices continued to exclude many potential buyers whose pockets just don’t go deep enough.
Ask John Scarboro, an engineer at NASA Ames Research Center, who pays $2,450 rent for the two-bedroom townhouse he shares in Mountain View with his wife and two children. Fearing a sharp rent hike, he would like to settle down and buy a condo, but “the price for two-bedroom places is going up, really high, really fast,” he said. “I don’t think I’ve seen any for under $750,000.”
Given his income, he’s having trouble making the math work: “My salary is over six figures, just barely, but still it seems like a lot of money. It should be possible to find something we can afford.”
As the median price hit a new peak in Santa Clara County, homes up the road in San Mateo County replicated their peak median price of $1.2 million, set in May.
Across the Bay, median prices fell by a hair to $716,500 in Alameda County, down from a peak of $724,000 in May, but rose to $512,000 in Contra Costa County. For the region as a whole, the median price rose to $698,000, a 4.5 percent increase from the year before.
Like LePage, Saratoga-based Alain Pinel agent Mark Wong said he has seen signs of an expansion of inventory. And with families feeling the urgency to lock in deals before their children go back to school in the fall, he noted, 36 homes have sold for $250,000 or more above the asking price in recent weeks in Cupertino and Sunnyvale.
Even so, Wong said, “over asking” bids are not as extreme as they were a few months ago, when buyers typically would throw an extra $400,000 or $500,000 into the mix to make their offer more attractive. The sellers’ market is at “a point of leveling off right now. It’s not going up, not coming down. Basically people are taking a break, and some of them are catching their breath from these multiple bidding wars.”
Walnut Creek-based agent Michele Manzone, of J. Rockliff Realtors, has observed a similar abating of multiple offers: “I think some of the buyers have backed out of the marketplace because of frustration,” he said. “They’ve gotten blown out so many times, and so they just back out, especially in the hot, hot markets. It gets very emotional for them.”
Still, cities close to commute corridors and within striking distance of job centers are very tough for buyers, said Manzone, treasurer and past president of the Contra Costa Association of Realtors.
“Oakland is just so out of control right now. They’re reviving areas where you had foreclosures a few years ago; places that went for $100,000 are now bringing $300,000 or $400,000. People are coming from the city (San Francisco) and rehabilitating these places. You’ve got parts of Oakland where people never thought of buying and now they’re buying.”
In Contra Costa County, he said, the market is “pockety,” depending on city and neighborhood. Some of the most desirable areas are close to BART and transportation hubs: “El Cerrito is a hot little market, and you’ve got Lafayette and Orinda right near the Caldecott Tunnel. Anything that’s got proximity to BART, you’re going to see those places really skyrocketing in terms of sales, and the rental market has gotten out of control, as well.”
