Bay Area home prices continued to rise in June, with a soaring stock market and historically-low interest rates driving big purchases in Silicon Valley.
Super-scarce inventory drove bidding wars and fast sales, as if coronavirus strictures were just a minor irritant in the constant pursuit of Bay Area homes.
The median sale price in June for an existing home in the Bay Area rose 3.4 percent from last year to $925,000, according to real estate data firm DQNews. The charge was led by San Mateo County homes jumping 6.7 percent to $1.65 million, Contra Costa County increasing 8.6 percent to $722,500, and Alameda County growing 6.1 percent to $955,000. The median price in Santa Clara County rose 2.4 percent to $1.28 million.
Selma Hepp, deputy chief economist at CoreLogic, said millennials, typically first-time home buyers in their early 30s, were the quickest to move back into the real estate market. Others soon followed. From mid-May, Hepp said, “the rebound was across the board.”
Record low interest rates also expanded buyers’ budgets and enticed more people into the market. Interest rates dipped below 3 percent for a 30-year fixed home loan, according to Freddie Mac.
The rising Bay Area prices highlighted the region’s chronic short housing supply and robust demand.
Sellers backed off from listing homes over health and safety concerns, agents said. Pandemic restrictions limiting home tours also chilled transactions during a typically busy late-spring and early-summer buying season.
Sales of existing homes in the Bay Area dropped nearly 8 percent from the previous year. Home sales fell 18 percent in Alameda County, 8.6 percent in San Mateo and Contra Costa counties, and 2.1 percent in Santa Clara County, DQNews reported.
Condo sales fared even worse, dropping nearly 19 percent from the prior June. The median price for an existing Bay Area condo fell 4.5 percent to $687,000.
June sales data reflects deals agreed to in April and May, suggesting a relatively strong return of buyers after several weeks of limited real estate showings.
Agents, buyers and sellers have been forced to adjust to coronavirus restrictions on home tours.
Open houses are banned, and agents schedule private tours for hours when sellers are out of their homes. Limited numbers of mask-wearing buyers may enter a property at one time, and rooms must be disinfected after each showing. The number of homes for sale has dropped, as many sellers have been reluctant to list their houses unless they must move for career or family reasons, agents say.
Some agents pointed to pent-up demand from buyers unable to move in the spring.
“Hyper-crazy nuts,” said Will Doerlich, an East Bay agent and executive at Realty One Group.
Doerlich saw a mix of young, first-time home buyers and tech workers hunting for larger homes and bigger lots. The growth in remote work has meant some professionals are willing to move farther away from their offices
“The economy is still strong in the Bay Area,” he said. “It’s the tech market.”
An upgraded, four-bedroom home with a pool in Livermore drew 21 offers, he said, and is expected to sell at a significant premium over the $1.15 million asking price. The typical home in the East Bay city sold in less than two weeks in April and May, and about three weeks in June, he said.
Home sales and bidding wars were brisk in Silicon Valley cities.
“The market is super-hot for single family homes,” said Ramesh Rao, a Coldwell Banker agent based in Cupertino. “Selling your home is not a problem.”
Rao credits the strong stock market and low interest rates, giving tech professionals greater buying power in recent months. He’s seen multiple offers on large homes in upscale communities, including Monte Sereno.
But, he noted, the way of doing business has changed dramatically. Buyers are asked not to touch surfaces, and lingering tours are discouraged. Online research has replaced weekends spent at open houses. “It takes the fun out of it,” he said.
Home-buying during the pandemic, Rao said, “is more transactional than emotional.”