Compass May 2019 Bay Area Real Estate Update

While overall
Bay Area pace of sales in May still trends 2 percent below last year’s levels,
some regions are starting to see sales pace pick up ahead of last year. Sales
below $1 million are up for the second month in a row after more than 20 months
of annual declines.


CONTRA COSTA COUNTY

At $1.3 million, May median sales price in Contra Costa County retrieved from the previous month’s high, but still continues to trend ahead of last summer. Days on market continued to trend lower with homes selling as fast as they did at the same time last year, averaging 18 days on the market. See Contra Costa County market statistics for May.

Defining Contra Costa County: Our real
estate markets in Contra Costa County include the cities of Alamo, Blackhawk,
Danville, Diablo, Lafayette, Moraga, Orinda, Pleasant Hill, San Ramon, and
Walnut Creek. Sales data in the adjoining chart includes single-family homes in
these communities.


EAST BAY

While retrieving slightly from the previous month’s peak, median home prices in the East Bay in May remained ahead of last year, at $1.2 million. The pace of sales activity also picked up again with homes selling on average in 17 days, only a day longer than the 16-day average seen last spring. See East Bay market statistics for May.

Defining the East Bay: Our real
estate markets in the East Bay region include Oakland ZIP codes 94602, 94609,
94610, 94611, 94618, 94619, and 94705; Alameda; Albany; Berkeley; El Cerrito;
Kensington; and Piedmont. Sales data in the adjoining chart includes
single-family homes in these communities.


MARIN COUNTY

At $1.45 million in May, Marin County median home prices continued the recent trend of monthly increases but still fall slightly short of last May. Pace of sales also picked up slightly from previous months though taking a few days longer at the same time last year. See Marin County market statistics for May.

Defining Marin County: Our real
estate markets in Marin County include the cities of Belvedere, Corte Madera,
Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San
Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the adjoining chart
includes single-family homes in these communities.


NAPA COUNTY

After a slow winter season, Napa County‘s May median sales price picked up pace again and increased 2.8 percent above last year, to a median of $725,000. Homes continued to sell at a faster pace, averaging 56 days before entering into a contract, only 2 days longer than last May. See Napa County market statistics for May.

Defining Napa County: Our real
estate markets in Napa County include the cities of American Canyon, Angwin,
Calistoga, Napa, Oakville, Rutherford, St. Helena, and Yountville. Sales data
in the adjoining chart includes all single-family homes in Napa County.


SAN FRANCISCO — SINGLE-FAMILY HOMES

Median home prices for single-family homes continued with a strong upward trend, bringing San Francisco‘s May median prices to $1,697,500. Number of homes under contract also continued to accelerate with almost 50 percent of homes available for sale being under contract. See San Francisco single-family-home market statistics for May.


SAN FRANCISCO — CONDOMINIUMS

At $1,250,000 median sales price, San Francisco condominiums trended only slightly below last year’s median price mostly reflecting the change in types of units being sold. Buyer activity remains strong and the share of units under contract picked up again, up 8.1 percent points year-over-year to 37.7 percent. See San Francisco condominium market statistics for May.


SILICON VALLEY

Silicon Valley median prices picked up in recent months and reached $3,350,000 in May, 1.5 percent ahead of last May. Buyers otherwise remain more restrained than last year, taking longer to decide to purchase, leading to an average of 27 days on market. See Silicon Valley market statistics for May.

Defining Silicon Valley: Our real
estate markets in Silicon Valley include the cities and towns of Atherton, Los
Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of
U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the adjoining
chart includes all single-family homes in these communities.


Mid-Peninsula Subregion

The median sales price in the Mid-Peninsula continued to trend lower in May compared to last year. Homes under contract were down 6.3 percent with average days on market 10 days slower. See Mid-Peninsula market statistics for May.

Defining the Mid-Peninsula: Our real
estate markets in the Mid-Peninsula subregion include the cities of Burlingame
(excluding Ingold Millsdale Industrial Center), Hillsborough, and San Mateo
(excluding the North Shoreview/Dore Cavanaugh area). Sales data in the
adjoining chart includes all single-family homes in these communities.


SONOMA COUNTY

Sonoma County’s median homes prices continued their monthly increase after some bumpy winter months reaching $665,000 in May, or 4.4 percent below last year. Pace of home sales also continues to improve averaging 54 days in May, 9 days more than last year. See Sonoma County market statistics for May.

Defining Sonoma County: Sales
data in the adjoining chart includes all single-family homes and farms and ranches
in Sonoma County.


SONOMA VALLEY

Median home prices in Sonoma Valley picked up in May after relatively flat at the beginning of the
year, reaching $905,000. The pace of home sales also improved notably bringing
the average days on market to 45 days. See Sonoma
Valley market statistics for May.

Defining Sonoma Valley: Our real
estate markets in Sonoma Valley include the cities of Glen Ellen, Kenwood, and
Sonoma. Sales data in the adjoining chart refers to all residential properties
– including single-family homes, condominiums, and farms and ranches – in these
communities.


LAKE TAHOE/TRUCKEE — SINGLE-FAMILY HOMES

Median prices of single-family homes in Lake Tahoe/Truckee has been oscillating over the last year and reached almost $727,000 in May, down 2.1 percent from last year. Pace of sales has slowed somewhat averaging 75 days, 13 days more than last year. See Lake Tahoe/Truckee single-family-home market statistics for May.

Defining Tahoe/Truckee: Our real
estate markets in the Lake Tahoe/Truckee region include the communities of
Alpine Meadows, Donner Lake, Donner Summit, Lahontan, Martis Valley, North
Shore Lake Tahoe, Northstar, Squaw Valley, Tahoe City, Tahoe Donner, Truckee,
and the West Shore of Lake Tahoe. Sales data in the adjoining chart includes
single-family homes in these communities.


LAKE TAHOE/TRUCKEE — CONDOMINIUMS

Median home prices of condominiums in Lake Tahoe/Truckee has trended slightly lower in recent months bringing the May median sales price to $423,500, about 1.4 percent below last year. The pace of condominium sales has slowed more significantly, averaging 104 days in May, though these sales vary considerably throughout the year. See Lake Tahoe/Truckee condominium market statistics for May.

Defining Tahoe/Truckee: Our real
estate markets in the Lake Tahoe/Truckee region include the communities of
Alpine Meadows, Donner Lake, Donner Summit, Lahontan, Martis Valley, North
Shore Lake Tahoe, Northstar, Squaw Valley, Tahoe City, Tahoe Donner, Truckee,
and the West Shore of Lake Tahoe. Sales data in the adjoining chart includes
condominiums in these communities.

Plenty of Bay Area buyers, but why are they hesitant?


economic-straight-talk

Executive Summary:

  • While April’s momentum is slightly slower in
    May, May sales are still only 2 percent below last year’s highs after
    double-digit declines earlier in the year.
  • Home sales momentum remains solid in East Bay.
    Napa sales finally jumped 6 percent after a 6-month losing streak, averaging 20
    percent annual declines.
  • Affordable sales picked up again with sales of
    homes priced below $1 million up 3 percent year-over-year, the first two-month
    consecutive annual increase in the last four years.
  • For-sale inventory growth is slowing after the
    winter jump with homes averaging seven days longer on the market.
  • San-Francisco continues to see significant
    inventory declines with May down 19 percent YOY (four months of declines
    averaging 20 percent).  
  • Buyer competition picks up again with 58 percent
    of homes selling over the asking price.
  • Bay Area housing market correction resembles “Table
    Top” with prices remaining flat, compared to “Mountain Top” seen
    in the last cycle when prices fell significantly following the peak.

Following a solid improvement in the Bay Area housing markets
in April, May homes sales activity continued with the momentum, albeit slower.
Total home sales were 2 percent below last May, following April’s upwardly
revised 1 percent year-over-year decline. The rate of declines has slowed
considerably after double-digit declines seen in the first few months of 2019. Taking
the first five months of the year together, sales are 5 percent below last
year.

However, while declines continue to be driven by slower
sales in Santa Clara and San Mateo, East Bay home sales are keeping the
momentum. Napa sales jumped 6 percent after a 6-month losing streak, averaging
20 percent annual declines. San Francisco, the spotlight of expectations around
IPO impacts, remained relatively flat with last year, down 1 percent, though
San Francisco sales peaked last May at the highest numbers of May sales in at
least the last four years. Overall, most all markets except Sonoma saw
improvement in sales in at least one price range. Table 1 summarizes
year-over-year changes in the number of homes sold by price range.

Table 1

Source: Source: Terradatum, Inc. from data provided by local MLSes,
June 7, 2019

As noted in last month’s analysis, the most encouraging
improvement considering Bay Area’s affordability concerns is the increase in
sales of homes priced below $1 million, which showed its first two-month
consecutive annual increase in the last four years. Figure 1 illustrates the
trend of year-over-year changes in home sales by price range.  As Table 1 suggests, the increase in lower
priced sales is mostly driven by East Bay, but also Santa Clara where lower
priced sales have been increasing since the beginning of the year after drops
averaging 40+ percent in 2018.  In
contrast, San Mateo, San Francisco and Marin continued to see declines in lower
priced sales as that inventory has largely disappeared – for example, in the
three regions, less than a third of homes available for sale are priced below
$1 million.

Figure 1
Year-over-year change in the number of homes sold

Source: Source: Terradatum, Inc. from data provided by local MLSes,
June 7, 2019

The increase in lower priced homes has been helped by
raising inventories of lower price ranges. Figure 2 traces out the trends in
inventory growth over the last couple of years. Currently, available inventory
levels are on average 15 percent above last year with inventories priced over
$3 million continuing to increase at a relatively faster pace, followed by
increase in inventory priced between $1 million and $2 million. Inventory of
homes below $1 million has slowed from the winter jump, but still remain at
double-digit growth. Nevertheless, while inventory growth is steady, it’s
largely due to homes taking longer on the market rather than new listings becoming
available. The rate of new listings has fallen significantly since the winter
jump, particularly for lower priced homes. To see the aging of for-sale inventories,
Table 2 summarizes average days on market for homes that were still available
for sale on May 31.  On average, current
inventory has been on the market for 47 days, or at least 7 days longer than
last. 

Figure 2
Year-over-year change in number of homes for sale by price range

Source: Source: Terradatum, Inc. from data provided by local MLSes,
June 7, 2019

Table 2

Source: Source: Terradatum, Inc. from data provided by local MLSes,
June 7, 2019

Furthermore, while buyer competition is not at the same
level as last summer, when housing market activity peaked, it continues to ramp
up from slower start to 2019. Seasonally, buyer competition peaks in May with the
highest rate of homes selling over the asking price in a given year. This May,
almost 6 in 10 homes sold over the asking price, which is below the last three
years when about 7 to 8 in 10 homes sold over the asking price, but still
suggest solid buyer demand. Figure 3 illustrates the trend in the share of
homes selling over the asking price. Regionally, the difference from last May
has been smallest in San Francisco, where 72 percent of homes are still selling
over the asking price, down from 75 percent last May. The most notable decline
in buyer competition remains in Santa Clara where 56 percent of homes are
selling over the asking price, down from 89 percent.

Figure 3
Share of homes selling over the asking price

Source: Source: Terradatum, Inc. from data provided by local MLSes,
June 7, 2019

As noted in the last month’s analysis, San Francisco’s
housing market resilience remains further evident in absorption rates of
available inventory, which is up 8 percent points compared to last May and is
the only area where absorption rate has increased on an annual basis. Granted,
San Francisco is also the only region where inventory continues to decline,
down 19 percent in May. This brings us to the question around the impact of recent
and anticipated IPOs. While it doesn’t appear that San Francisco housing is
bubbling out of control, it is difficult to say where it would be in the
counterfactual. In other words, would the market currently be worse off or
similar to where it is if it wasn’t for the IPO expectations?

In the least, it is clear that the strength of the Bay Area economy and continued job growth is driving solid demand from buyers across the region, both for affordably priced homes as well as higher-priced homes. And while the number of sales is lower than last year, it is important to keep in mind that last summer housing market activity peaked, and current conditions are suggesting leveling off or normalization of those unsustainable trends, particularly in areas in Silicon Valley or post-fire Sonoma. Further, buyers, may are holding off fearing that housing market correction is inevitable and are waiting for sellers to yield further and lower their expectations. And while recent softening of price growth suggest correction is under way, it is unlikely that it will be the correction that we saw in the last housing cycle. Credit conditions are significantly different than in the last cycle. The current housing boom was driven by exceptionally solid underwriting and significant share of all-cash purchases, coupled with almost negligible new construction growth, both of which suggest that the correction path is looking notably different. In the Pacific Union Real Estate Economic Forecast 2020. “Table Top” is unlike the “Mountain Peak” seen during the last housing cycle in 2004 to 2017 when home prices rapidly declined as much as 60 percent following the peak.

Figure 4  John Burns Home Value Index

Source: Pacific Union International Real Estate Economic Forecast, San Francisco Bay Area to 2020

Home of the Week: Historic Piedmont estate

Set among other stately homes on a leafy street, this gracious home mixes natural light, lavish gardens, and richly textured details in one of Piedmont’s great estates. Now, for the first time in decades, it is available.

A shady, romantic drive lined with stately redwoods fades deep into the property. In the deep front porch, a huge door of intricate ironwork and glass opens to a formal entry leading into two magnificent spaces. In the living room, light from an array of tall leaded-glass windows illuminates an exquisite coffered ceiling and limestone fireplace.

Nearby, the dining room shows off a gold-leafed and delicately hand-painted ceiling, wall coverings, and a marble fireplace. Just beyond is a spectacular solarium with tiled fountain and wall insets, stenciled ceiling, leaded glass skylights, checkerboard stone tile flooring, and French doors to the expansive gardens. The vast kitchen with butler’s pantry, huge island and adjoining family room also opens to the rear patio and gardens beyond. Back across the entry, leaded glass windows in the firelit library overlook the front gardens.

On the second floor, the paneled master suite features two walk-in closets, a fireplace with marble surround, and a private sitting room overlooking the gardens. This level also features four additional bedrooms and three more bathrooms, plus a spacious laundry and a bright study/office with a garden-view deck.

The third floor provides a huge family room with pitched ceiling, along with a kitchenette, two more bedrooms, and two baths. The approx. 1700 sq ft basement holds many more rooms and storage galore.

The home is enhanced inside and out by magnificent gardens front and rear. The tiered back garden rises from brick patios past a waterlily-covered koi pond to a sweeping green field big enough for soccer, badminton, corn-toss—whatever your imagination allows. While roses clearly take center stage in these gardens, they’re accompanied by everything from spiky birds of paradise and soft wisteria vines to a huge, highly productive vegetable garden. Three more structures share the grounds: a charming carriage house with a 1 bedroom apartment above and two-car garage below, a garden guest house with kitchenette and full bath, and a children’s playhouse and playground.

Set in the center of Piedmont, the home is just a few short blocks from the elementary, middle and high schools, the local market, express bus to San Francisco, the casual carpool and the central park. It’s also close to the shops, restaurants, and boutiques of Grand, Lakeshore and Piedmont Avenues.

320 El Cerrito Avenue is offered at $6,680,000 by Debi Fitzgerrell & Anna Bahnson.

The Sevens: Contemporary Hancock Park living


A collection of seven contemporary homes in the Park Mile district of Hancock Park. Only seven units remain.

The stunning architecture of The Sevens complements the stylistic significance of the surrounding neighborhood. Set within a protected park-like locale, the community adjoins the city’s most famous street address, Wilshire Boulevard, with Rimpau Boulevard. 

Thoughtfully sited, the homes are freestanding but organized in a uniform north-south orientation, basking in year-round Southern California sun and warmth of the day’s book ends.

The residences feature four different floor plans which include three and four bedrooms, a direct two-car garage, and a rooftop terrace boasting panoramic mountain and city vistas.

Classic brownstones, synonymous with a bygone era of New York, merge effortlessly with a clean modern aesthetic — an elegantly agreeable architectural crossroads at the front door of Hancock Park.

With both traditional and contemporary grace, The Sevens adjoins a historic neighborhood with the inspired future landscape of Los Angeles.

Only four homes are still available, with open house scheduled throughout June and July, Sundays 2 to 5 p.m. The Sevens are exclusively represented by Compass agents Diana Knox, Joanne Lindsay, and Rick Ojeda.

Home of the Week: Kentfield estate embodies California lifestyle

Embraced by Mount Tamalpais woodland, this expansive home at 658 Goodhill Road, Kentfield’s most prestigious street, embodies the easy California lifestyle at its elegant best.

A huge pool and spa, a tennis court, two patios and a full barbecue kitchen share this leafy natural setting, surrounded by luxuriant tree-shaded grounds, an expansive level lawn and leafy woodland with easy trail access.

With four en-suite bedrooms on the upper level and a private guest house with full kitchen and pull-up patio seating, this is an ideal place for family-friendly living.

Emphasis on the finest design, materials and craftsmanship begins
with the towering
wrought iron and glass door that opens to the two-story entry. (A bird’s eye
view of this soaring space, lit by high windows, can be had from both the upper
hall and master suite.) From here, the sightlines sweep all the way across the expansive
main level to the grounds beyond.

It’s an open environment made for entertaining, flowing easily through great room, formal dining, living and family areas.

Near a casual eating spot by a view balcony, an expansive open chef’s kitchen and 1,000-bottle wine cellar stand ready to handle anything from intimate gatherings to grand occasions.

The family room can be closed off by wide barn doors; a handy pass-through to the kitchen creates a private club atmosphere.

A more secluded domain, the office, is surrounded by custom wainscoting, bookcases and leafy views.

The four upper bedroom suites include a luxurious master retreat with step-up marble bath and a suite with a private balcony.

Surrounded by natural beauty, this casually sumptuous family domain is listed by Barr Haney at $9,500,000.