Bay Area Housing Market Update and Home Buying Tips, September 2021
Today I would like to share with you the latest market trends here in the Bay Area and then compare them with what's happening across the nation. In this video I also want to share our experience
with the buyers. We were able to negotiate majority of our purchase contracts one-on-one with the sellers bypassing multiple offer situations .
The median home sale price this year reached its peak in June at $1,486,000 and then prices start to decline slightly. What we observed was that after the meteoric rise of prices during the spring months, the market returned to typical seasonal trends when we see declines during July and August, and then activity picking up right after the Labor Day.
September median home sale price was almost 12% above 2020 levels and almost 24% above 2019 level. We always look back at 2019 as the last "normal" market before the onset of the pandemic.
What makes this market unique is how fast homes are selling. The median time on the market this year was hovering between eight and nine days. What that means that half of the homes that came to the market were sold in eight or nine days, literally after the first open house. Just to put that into perspective the median time on the market in 2019, September of 2019, was 18 days, exactly double the time of September of this year.
The market activity is limited only by availability of homes for sale. Number of new listings this year fell by 5.4 percent comparing with 2020, but by historic standards it was significantly higher than in previous years. The number of new listings increased by 14.7% comparing with 2019.
While the number of new sales decreased slightly this year versus 2020, the number of closed sales increased by 0.5% and was higher by almost 40% above the 2019 level.
The Bay Area is not unique in terms of price growth and shortages of inventory. Here is an article from Inman news that is dated September 28th of 2021. US home price growth tallies biggest gain in a generation. US home price growth soared 19.7% in july extending an unprecedented 14-month streak of increases and setting a new record for annual price growth. And the reason they are citing for that... Are "interest rates and lack of available inventory that continue to plague housing market."
And here is why. America is short by more than 5 million homes and builders can't make up the difference. Here is the calculation: Some 12.3 million American households were formed from January of 2012 to June of 2021 but just 7 million new single-family homes were built during that time.
Situation in the bay area is even worse than in the rest of the country. Silicon valley added only one home for every six new jobs last decade helping send housing costs soaring. From 2010 to 2019 the number of jobs in Santa Clara county jumped by nearly 33%. During nearly the same period from 2010 to 2020 the number of residences increased only by 7.2%. New housing construction in the region was so anemic that about 14% fewer units were built in the last decade than during the period from 2000 to 2010.
This shortage of inventory and deficit of housing will continue driving home sale prices up. If you are thinking about buying a home here in the Bay Area, we would recommend you doing it earlier than later. If the growth will continue for another three to five years, as experts predict, today price may be the lowest you will see for the rest of your stay. Next economic downturn may not bring home sale prices below today level. Buying now?
I can hear you saying "What about the competition? How about multiple offer situations? We really don't want to compete with five, eight or even more offers trying to get a home!" Well, over the last two years more than 75% of our buyers were able to negotiate their purchases one-on-one with the sellers bypassing multiple offers.
How do we do that? We have a plan! It requires a keen eye, a lot of patience and a little bit of luck. Let's look at the transaction from the seller's point of view. They would spend a lot of time and effort preparing your home for sale and marketing it. They would expect that the home will sell just like everyone else's home in eight or nine days. But for some reason it stays on the market for 10, 12, 14 days and they are not getting any offers, The seller will start to worry, will they be able to sell it and at which price? This is exactly the time when an experienced agent and a savvy buyer would submit an offer that will be accepted!
We work with only a small number of buyers and sellers at a time to be able to provide our five-star service. Call us or text us so we can start on your home searching journey together!