Bay Area Real Estate: Slim Inventory No Match For Coronavirus?
Starting March 17th, 6.7 million residents of the 6 Bay Area counties were ordered to stay at home, with exception of providing or receiving essential services. State-wide restrictions followed just a few days later. Eventually real estate was declared one of the essential services. We want you to know we are following all CDC and local guidelines throughout the buying and selling process to ensure your safety. Talk to us about your needs – we are here to answer your questions, help facilitate your next move or just chat on the phone.
So, what happened last month in our local housing market? We are seeing a mix of market indicators in March’s data. Market activity, such as new listings or closings, went down because of pandemic fighting measures and social distancing. At the same time, home prices continued to rise – a trend that started at the beginning of this year. More on that later! While March is typically the beginning of a strong selling season bolstered by new homes on the market, the number of new listings this year fell by 6% compared with February 2020 and by 18.6% compared to March of last year.
March home sales also took a hit, the number of accepted offers on homes dropped by 14.5% month-over-month and 30.5% year-over-year due to the shelter in place orders. There are no indications that the pandemic had any significant influence on the sale price, at least not yet. The median March sale price increased to $1.3M in Santa Clara and San Mateo Counties. It is just 1.1% below the last peak our market reached in May of 2018.
So, what market activity has been happening since our shelter in place took effect? Out of 1,364 homes that changed hands in March of 2020 in our two counties, 58 homes went under contract after the onset of the shelter in place order and closed before the end of March. These 58 homes are in all price ranges – the least expensive sold for a little under $450 thousand and the most expensive sold for almost $6,7 million. These houses represent a geographically diverse Bay Area market perspective from South San Francisco all the way to Morgan Hill. When looking at our sample of transactions we see a median sale price of $1,350,000, $50k higher than March’s median sales price.
Beyond the coronavirus pandemic, the market is still very tight, and the inventories are extremely low. The number of homes available for sale fell by 35.2% percent from the same time of 2019 and is only 2% above the end of February 2020 level. Half of the homes in March sold in 8 days or less – the fastest moving market since September of 2012. This can be an indicator of continued limited availability of homes for sale not being able to satisfy buyers’ demand.
Is all of this a glimpse into our new market reality? It is too early to tell if pent up demand or other local conditions will keep the market active during this pandemic. We are monitoring all developments day-by day and will keep you updated regularly. This is Michael Talis with the Talis Team. Before you make any big and costly decisions about your real estate needs, let’s have a conversation. We are focusing on keeping our clients safe – let’s talk on the phone or have a video conference where we can share the screen. We are looking forward to connecting with you!
-Elena & Michael