Bay Area Housing Rebound Reaches Historical Highs
If you are one of the people that put their next real estate decision on hold with the onset of the coronavirus, this video is for you! If you are “monitoring the market” trying to decide if it is right time to buy or sell, keep watching – I will share with you the latest developments here in the Bay Area to keep you current and informed
I just received a notification text from Santa Clara County updating the stay at home order. By the end of the week sit-in dining in outdoor restaurants will be allowed and kids camps will get to open for the summer. The real estate market is also started a strong move towards the recovery in May. You would ask me why? 951 homes changed hands in May, the lowest number since onset of the COVID-19 and a 13% decrease since April. While the number of closed sales continued to decrease, the leading indicators show a significant increase in the market activity and heightened consumer confidence.
The number of newly negotiates contracts in May, 1552, was at the highest level since October of last year and a 77% jump from April just one short month ago. Typically, it takes 30 days from the day offer is accepted to the day new owners will get the keys. Most of these transactions will be closing in June setting us for potentially more than 50% increase in the number of closed sales next month.
Another leading indicator of the market activity are new listings. 2057 homes were put on the market in May, are 45% jump compared to the last month’s. It is the highest level of new listing activity since September of 2019. With the median time on the market hovering in 10-day range, we expect that most of these homes will be under a contract before the end of June pushing the number of the contingent and pending properties to the new heights. And while we see a significant increase in the market activity levels month-over-month, the number of homes available for sale decreased by 33% compared with May of 2019. The shortage of inventory provided a strong support for the home prices – May ended with the median home sale price in our two countries reaching $1.3M, just $15,000, or roughly 1%, below the all-time high set exactly 2 years ago in May of 2018.
The median listing price in May also reached all-time high of $1.3M, the same level as the median sale price here in Santa Clara and San Mateo Counties. This shows that more homes are being listed at the market prices and the seller’s and buyer’s expectations are moving closer together.
To summarize, after a steep decline in the housing market activity that started in the second half of March and continued through April, May shows signs of a strong rebound. Consumers, both buyers and sellers, adopted to the new ways of doing business and are re-entering the market.The prices are staying flat near the record level supported by continued high demand and the extremely short supply of homes available for sale. And as the economy will continue to reopen and the residents will feel safer moving around and interacting with each other, we would expect the typical spring selling season pushed way into summer.
Now let me ask YOU a question – at the beginning of the year video I was predicting that we will see an new home price record set this year. Will it happen? Do you think I was right? Put your answer in the comment section below.
-Elena & Michael