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  • Writer's pictureKevin Peterson

August 30, 2023: Real Estate Trends In The SF Bay Area

Table of Contents:

  • KP Corner (Incl. OFF MARKET properties)

  • How Are The SF Bay Area Markets?

  • What's Selling The Most RIGHT Now?

  • Mortgage Rates & The Stock Market

  • How We Help Our Buyers & Sellers


 

KP Corner


Recent Successes:


  • Homer Lane, Menlo Park - Negotiated $10K below buyer's target price

  • Redwood Shores (Off Market) - Represented both buyer and seller



OFF MARKET PROPERTIES:

  • San Mateo (2003 sqft) 3 bedroom, 2 bath, 2-car garage in Beresford

  • Santa Cruz (1622 sqft) 4 bedroom, 5 bath, 1-car garage on oversized lot

  • Redwood Shores (1770 sqft) 3 bedroom, 2 bath townhouse


 


How Are The SF Bay Area Real Estate Markets?


Overall, the San Francisco Bay Area real estate markets are maintaining sales prices. Inventory levels are low due to seller's "Golden Handcuffs", aka cheaper mortgages they purchased with or refinanced. This is resulting in potential buyers competing against limited inventory.


SF Bay Area Real Estate Trends - Month over Month (MoM)

Key take aways ....

  • LESS SOLD - There is slightly more inventory than last month yet less sold compared to last month.

  • Days on market (DOM) UP - This metric crept up slightly (21 vs. 19) despite sales prices going over asking (5% vs. 6%) due to multiple offers.

  • Interest rates climbed aggressively all month to a 23 YEAR HIGH, 7.49%.

  • Price per square foot / sales price DOWN - Some homes saw price declines at various price levels, attributable to the rapid interest rate increases (and seasonal buying).

  • What sold the most over asking? San Francisco single family homes listed between $2.3-2.8M sold at the highest percent over asking (121%).

  • What is taking the longest to sell? San Francisco condos and townhouses had the longest days on market.

The charts below are month-by-month heat maps of pricing in the SF Bay Area. They are grouped by county and property type (Condo, Single Family Home, Townhouse). The metrics are Price Per Square Foot, Days On Market, how many sold, and the List To Sales Price Ratio. Green indicates items keeping prices up in comparison to previous month's metrics. Red indicates the opposite, i.e downward pressure on sales price towards a Buyer's Market.


(Click on each county's data to make larger). Make county / location bigger than MoM.





SF Bay Area Real Estate Trends - Year over Year (YoY)

Here's the data to support the year over year price growth (supply versus demand) we are currently experiencing.


Inventory - Seasonally adjusted, we are still at record lows due to sellers' "golden handcuffs" of previously low interest rates.




% Over Asking vs. DOM - Demand is still strong yet rising interest rates this last month started cooling off the market. Homes are still going over asking price but the percentage is declining (105%) while the average days on market are increasing (21 days).





Sales Price - Although most homes are priced strategically below market by realtors, the final sold prices are coming down across the SF Bay area month-over-month ($1.65M vs. $1.79M) due to higher interest rates. See below.





 

What's Selling The Most RIGHT Now?


We evaluated the Mid-Peninsula and five SF Bay Area counties to see what price ranges are moving, what their average price per square foot was, how long they sat on the market, and for those that closed - what percent over or under asking was achieved.


Those that are pending, i.e. just went into contract....



When compared to July, August was the inverse...

  • Price per square foot decreases - San Francisco, Santa Clara, Alameda, and Contra Costa.

  • Price per square foot increases - San Mateo, and Mid-Peninsula cities.



Here are the pending details for those interested.




 

Mortgage Rates & The Stock Market

  • FED is keeping its finger poised on another rate hike before the end of the year due to mixed metrics on inflation.

  • Year to date, early July 2023 had seen the most mortgage pain but then came August, which surpassed a 22 year high at 7.40% for the 30 year fixed mortgage. This has been dragging down some of the demand and appreciation occurring in the SF Bay Area.

  • The stock market is still doing well despite this and technology has been continuing to lead the way up as we saw last month.

  • When will the next Recession occur? Check out these infographics for a brief primer that we can discuss at our next coffee.

  • At KPeterson.realty, we know not every lender is created equal and we work with lenders who's rates today are around 5.85% for 10/1 ARMS. Our lenders also may value your RSUs better than others. Reach out and tap into our network.





 

How We Help Our Buyers

  • We work with the best lenders who are able to beat the current interest rates (some as low as 5.1% on a 10/1 ARM).

  • Search For Homes by customizing your financial situation before contacting a lender to determine what you can afford.

  • Investing or not sure which areas to look in? Explore Markets to generate reports that analyze a city by days on market, average home price, price per square foot, average number of bedrooms / bathrooms / square feet in YOUR price point.



How We Help Our Sellers

  • We have a $0 down / 0% renovation program in which you don't need to pay back for one year, giving you flexibility on when to sell. The goal is for every $1 spent on renovations to net (on average) a $2 to $4 return on investment. Every family has a unique real estate scenario based on their needs and circumstances. Feel free to schedule a consultation with me today.

  • Click "What's My Home Worth" to find out the rough value of your home and automatically monitor it monthly. It also shows you various options for your equity (refi, home equity line or loan, etc).

  • If you'd like a more specific valuation of your home, give me a call.


Check out our last few or peruse all of them at https://www.kpeterson.realty/blog

  • July 19th: Real Estate Trends In The Bay Area

  • June 27th: Real Estate Trends In The Bay Area

  • May 24th: Real Estate Trends In The Bay Area And San Mateo

  • Apr 6th: What happened To The Bay Area Real Estate In March?

  • Mar 16th: What Happened To Bay Area Real Estate In February?

  • Feb 23rd: Which Bay Area Cities Are Selling In Under 20 Days?

  • Feb 14th: What Is Selling (Year To Date) In The Bay Area And Mid-Peninsula?

  • Feb 6th: What Happened To Bay Area Real Estate In January?

  • Jan 30th: Layoffs + Bay Areas Experiencing Biggest Price Drops And Gains

  • Jan 22nd: Which Bay Area Cities Are Selling In Under 30 Days?

  • Jan 16th: Is The Market Showing Signs Of Waking Up?

  • Jan 9th: Bay Area Monthly Update + 2023 Outlook

  • Dec 26: San Mateo & Santa Clara County City Comparisons

  • Dec 18th: Did The FED Just Kill The Bay Area Real Estate Market?

  • Dec 10th: What Happened To My Home Value? (San Mateo, Foster City, Redwood Shores)

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