Would you pay $1.5 million for the house in the photo? A few weeks ago, someone did.
The dwindling supply of homes for sale is the back story to every news story that gets written about the Bay Area’s housing crisis.
And in what price range is this dwindling supply dwindling the most? Read on.
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In Santa Clara County, listings are at historically low levels — about 35 percent below where they were a year ago, and inventory already was thin then.
Yet, according to many agents and brokers, there has been barely a hint of a summer lull in the market. Sales are up. Aggressive bidding and multiple offers are common — one property in San Jose’s Cory neighborhood recently drew 34 bids. The Cupertino home in the above photo sold for $215,000 over its asking price.
In the East Bay, according to an analysis by the Bay East Realtors Association, the first six months of the year showed a lot less inventory, but more sales and higher prices when compared to the first six months of 2016. In central Contra Costa County, which includes Walnut Creek, inventory dropped 9.0 percent while sales rose 10 percent and prices increased 7.0 percent.
Wednesday’s report from CoreLogic, the real estate information service, reiterated that single-family home sales rose across the region in June despite the tightening inventory. On a month-to-month basis, some of the jumps were sharp: 9.9 percent for the region as a whole; 14.0 percent for Alameda County; 18.9 percent for Contra Costa County. The rise in Santa Clara County was more moderate, up 4.8 percent from May.
The increased activity suggests that the region is “quickly burning through its supply of homes for sale,” said Andrew LePage, research analyst for CoreLogic. “Inventory is down, so you’re just going through it at a faster pace.”
He wondered if some home shoppers have moved up their plans out of concern over the thin inventory — particularly if they are looking for homes on the lower end of the price spectrum. Few are available. In fact, June sales of homes under $500,000 fell by about 17 percent year-over-year across the region, though a 9.0 percent increase in sales over $500,000 more than compensated for that fall-off.
And there, perhaps, is the most disturbing part of this story: As the Bay Area becomes more and more of a high-priced enclave for tech workers and others earning substantial salaries, the dwindling inventory has dwindled the most at the low end.
A 17 percent drop in sales for homes under $500,000? Well, sure — homes under $500,000 are an endangered species in the current market.
Of the eight counties covered by CoreLogic’s report, only one posted a median sale price below $500,000: Solano County, where the median sat at $400,000 in June. No wonder Vallejo — Solano’s port town, once famous for crime — is suddenly a hot market for real estate, the hottest in the country, according to realtor.com.
There are relative bargains to be had there.
But, one would bet, not for long.
Photo: A home in Cupertino. (Courtesy of Mark Wong/Alain Pinel Realtors)
Tags: affordable housing, affordable real estate, Bay Area housing, Bay Area housing prices, California real estate, CoreLogic, median prices, median sale price